Report about my industrial placement - Essay Example

Download file to see previous pages Starbucks coffee is popular in all customer types, irrespective of what age group customers belong to. Customers love to spend not only leisure time but important business decisions are taken while sipping Starbucks coffee. Market for retail coffee is highly competitive but the only competitor from revenue earning perspective has been Nestle S.A. Competition in the coffee industry is determined by the price and quality of products against the product range. Thus, from earning potential angle, Starbucks is second only to Nestle S.A. The table below shows that the product line breadth of Starbucks is high relative to its competitors like Dunkin Donuts and McDonalds showing moderate breadth while other competitors including Green Mountain Coffee Roasters, Kraft Foods, Inc. And Nestle S.A. are low in product line breadth (Brown and Nwabueze, 2011). Table1: Direct Competitors to Starbucks Firm Product line Breadth Revenues (2010) in Millions % of Total Group Revenues Starbucks High 10,707 27% Dunkin Donuts Moderate 5,500 14% McDonald's Moderate 2,400 6% Green Mountain Coffee Roasters Low 803 2% Kraft Foods, Inc. Low 3,100 8% Nestle S.A. Low 17,700 44% Source: Harold Brown 2011 Competition in the coffee retail segment is going to be severe with all the leading players bent on capturing new global markets. Starbucks is very well positioned with networked marketing, technology usage, Starbucks rechargeable payment cards and mobile apps for quick and easy order placing and payment (Brown and Nwabueze, 2011). Starbucks has successfully adhered to its policy on corporate social responsibility by identifying coffee farmers as critical partners in the growth history of the company. Starbucks has evolved and strengthened its relationships with all stakeholders and partners, including customers, employees, suppliers and communities over the years (Harnrungchalotorn and Phayonlerd, 2010). The organisational chart of Starbucks has gained significant growth by 1991 with the increase in profitability. It prompted Schultz to initiate a new employee programme for the long-lasting success of the Company – a stock option plan for all employees. The purpose was to create a link between their positive role and the rising market value of the Company. Stock options were awarded on the proportionate basis to base pay. Yet another programme, the Bean Stock, was offered for employees benefit. Even part-time employees could also benefit from this programme of the Company. It helped the Company to recruit motivated people with above-average capabilities and good work habits not only due to its fringe benefit programme but also its pay scale. Starbucks has experienced low turnover rates relatively to other companies because of its initiatives for creating a good work environment. The competitive retailers had high turnover rates for store employees in the range of 150 to 400% a year while the turnover rates for Starbucks’ baristas were near to 65%. For the position of store managers, the Company turnover rate was near to 25% relative to approximate 50% for other chain retailers. Schultz’ management of Starbucks through the values and principles has increased the brand performance in the desired way. Employees feel high on morality. There is respect for all, irrespective of the designation one holds. One can see the impact of increased level of ...Download file to see next pagesRead More