Starbucks Industry - Case Study Example

I. Starbucks a. TheStarbucks Story Starbucks began in 1971. Back then, Starbucks were still a roaster and retailer ofwhole bean and ground coffee, tea and spices witha single store in Seattle’sPike Place Market. Today, Starbucks has grown to nearly 18,000 retail stores in 60 countries serving millions of customers every day (Starbucks). b. Starbucks Mission To inspire and nurture the human spirit – one person, one cup andone neighborhoodat a time c. Product range Starbucks offers a range of exceptional products that customers enjoy in their stores, at home, and on the go. Among these products are; Coffee with more than 30 blends and single‐origin premium coffees. Handcrafted beverages of fresh‐brewedcoffee, hot and iced espresso beverages, Frappuccino®coffee and non‐coffee blendedbeverages, smoothies andTazo®teas. Coffee‐ andtea‐brewing equipment, mugs and accessories, packagedgoods,music, books and gifts. FreshFood baked pastries, sandwiches, salads, oatmeal, yogurt parfaits and fruit cups. II. Position on ethical matters a. People – people are the most important asset in an organization. In Starbucks, the importance of its people are elevated in treating them as partners and implementing labour practices that is consistent with Starbucks Global Human Rights Standard where Starbucks promotes equal opportunity in its hiring practices, makes recruiting decisions based solely on job-related criteria and does not use forced labor. To quote Starbucks; “We respect diversity in each other, our customers and suppliers and all others with whom we interact.” Starbucks offers comprehensive healthcoverage for eligible full‐ and part‐time partners and equity in the company through Bean Stock as its expression of treating employees as partners. b. Ethical Sourcing – Starbucks takes a holistic approach to ethically sourcing the highest quality coffee. Their purchasing decisions includes supporting farmer loans and forest conservation programs to areas where they buy their coffee. Through this ethical purchasing practice, Starbucks is able to help foster a betterfuture for farmers and help create a more stable climate forthe planet. In the business aspect, this ethical practice also helps to provide the company a long‐term supply ofthe high‐quality beans it has been offering to its customers. c. EnvironmentalStewardship – Starbucks share their customers commitment to the environment. One of its core values is the belief in the importance of caringfor our planet and encouraging others to do the same. It envisions that by 2015, all of its cups will be made up of reusable or recyclable materials. It also endeavors to significantly reduce its environmental footprint through energy and water conservation efforts, recycling and green construction. d. Community Involvement – Starbucks endeavors to be a socially responsible member of its community wherever it may conduct business. Fromthe neighborhoods where its stores are located to the ones where its coffee is grown –Starbucks believe in fostering thriving communities. Bringing people together, inspiring change andmakinga difference in people’s lives – it’s allpart of being a good neighbor. Also, it aims to contribute one million hours each year to the communities in 2015 (Starbucks). Enforcement of Starbucks ethical standard Starbucks implement a zero tolerance compliance to its ethical standards. Any suppliers who fail to adhere to Starbucks their ethical practices are discontinued from doing business with the company. During an audit of its suppliers in 2011, the assessment found that 38 out of 129 factories failed their zero-tolerance standards. Subsequently, 26 of these businesses were discontinued and 14 were able to resume business with Starbucks after a marked improved performance in meeting its quality and ethical standards. This ethical standard enforcement had been in place since 2006 and since starting this program, Starbucks has already engaged in more than 500 factory assessments and continued to work with more than 100 of these factories to improve and align their standards according to Starbucks. Result As a result of Starbucks ethical business practice, the company became a member of the Global Social Compliance Program, a business-driven effort to promote the continuous improvement of environmental and working conditions of global supply chains. Starbucks had the distinction also of being the sole awardee of the World’s Most Ethical Companies (WME) in Restaurant and Cafes category (ethisphere.com) III. Event: Tree planting Rationale Determining the core values and ethical practices of Starbucks is necessary before drafting an event that in itself is ethical as it reflects the business reality of Starbucks. The two main thrust of Starbuck’s ethical practice is people and environment. As a business entity, Starbucks competency is derived from the quality of its workforce as it practice ethical treatment of its employees. It promotes partnership among its human resource by giving them stock options not to mention above industry compensation and mplementation of best HR practices. Part of Starbuck’s ethical practice is to contribute time and resources to the communities where it operates. In fact, by 2015, it aims to have contributed one million hours to the communities. Such, the event of tree planting that will promote the ethical position of Starbucks is aligned with the company program of events as it allocates significant hours to involve itself in the community. The event tree planting is elected not only because it is consistent and included in the company’s program of events. Tree planting is also a fitting as an event that will best represent how the company company takes care of its environment and its people as a means of taking care of its business. It embarked on a concrete purchasing programs such as Coffee and Farmer Equity (C.A.F.E.) Practices which comprise of a comprehensive set of more than 200 social, economic and environmental indicators – with quality as a prerequisite. And to ensure that these social, economic and quality indicators are adhered to, Starbucks ethical practice, mills are audited by third party verification organizations that are overseen by SCS Global Services. In 2011, 86 percent of its coffee was C.A.F.E. Practices verified ensuring both quality and ethical practice. Also, Starbuck’s Tazo tea brand is a member of the Ethical Tea Partnership which works with other buyers to improve the conditions for workers on tea farms. In sum, Starbucks ethical purchasing practices are verifiable and also looks after the people involved in the company within and without the organization. Thus, it can be summarized that Starbucks operation placed a great deal of effort to integrate ethics in its operation affecting the important components in its business which are people and environment. How the activity promote Starbuck’s ethical position The theme of the tree planting activity shall be tied up with Starbuck’s ethical sourcing practice that the rationale Starbucks has to be conscientious about tree is because its business comes from a tree – coffee and coco tree. In the process, the abovementioned programs such as CAFE program, SCS audit and Ethical Tea partnership shall be discussed to get the message across its target audience and leverage its ethical position in the community. Target audience: The general community Arrangement of the tree planting Benefit Starbucks ethical practices benefits are multi faceted where all the players involved in the business has gained from its conscientious business practice. Aside from economically empowering small farmers with their purchases at premium price (Starbucks does not shortchange the price of the beans of its farmer suppliers as part of their ethical purchasing decision), report in 2010 showed that of more than 100,000 coffee farms (of which 98 percent were smallholder farms 12 hectares or less) showed that more than 102,000 hectares were considered conservation land and have not been turned into coffee-growing landscapes. What is more admirable with this practice is that all of the school-age children of small farmers were able to attend school. Read More