Project Management at Starbucks - Research Paper Example

Project Management at Starbucks Table of Contents Introduction 3 Literature review 3 Research Questions 5 Research Methodology 6 Research philosophy 6 Research approach 6 Data Collection: Secondary Sources 7 Findings and analysis 8 Planning the expansion: Starbucks in the Gulf 8 Location and store layout 9 Managing input 9 Continuous improvement 10 Controlling and quality management 11 Training 11 Stakeholder management 11 Risk and competition 11 Social involvement 12 Conclusion 12 Reference list 13 Introduction Project management is the pooling of resources and various activities so as to meet the particular objectives of the organization. It basically considers applying knowledge, skills and technological aspects in suitable proportions so as to produce the desired products and services within the stipulated time and in required quantities to meet the needs of the market effectively. Project management is therefore managing the production related activities carried out in an organization (Denicolo and Becker, 2012). The projects may either be undertaken for a short or a long duration. The process of project management takes into consideration all major segments of an organization such as human resource, marketing, finance and other resource divisions. The success of a project depends adequately upon the optimum utilization of resources and cost savings. It is essential that the quality of the end products or services is as per the expectations of the organization. Hence, value analysis and additions at every stage of production is essential to ensure high quality and minimize errors. Project managers must also ensure that every activity undertaken at the production floor is useful and does not lead to loss of time or resources. Project managers are required to ensure that the needs of all stakeholders such as shareholders, employees, suppliers, financiers and the government are taken into consideration while developing production plans. Modern organizations are also seen to take into consideration the needs in respect of sustainability while developing operational plans. The current research paper focuses on analysing the operational efficiency and the project management systems existing at Starbucks. The analysis would be carried out particularly for the company’s operations in the Gulf region (Kloppenborg, 2011). Literature review Projects can be defined as a series of connected and complex activities having a common objective. Modern organizations are required to develop operational techniques which are fast, cheap and effective in meeting the organizational objectives. Through an effective operational plan, organizations aim to attain not only profits but also to provide utility to consumers. Successful project management are based upon the following five aspects: Project concept development- This is essentially a brainstorming process where managers and administrators are required to assess in a collaborated manner which type of projects are required to be undertaken (Turner, 2014). Planning- Once the ideas are set, project managers are required to consider the various resources required and accordingly develop plans of action. The planning stage is highly crucial as it sets the framework based on which the resources are collected. The planning phase also chalks out the sequence of activities. Setting of budgets is also carried out during this phase (Meredith and Mantel, 2011). Implementation- Once the planning phase is completed, the project plans are required to be implemented within the organizational framework. This includes assigning tasks to respective employees and implementation of resources so that production activities can be well supported. Performance and Control- After making the required arrangements in respect of human resource, materials and technology, the action plan is initiated. The project managers are required to ensure that all aspects of the project are well integrated and there are no errors occurring while the project activities are being carried out. It is also essential to ensure that the resources relating to both materials and finance are aptly used. Exceeding the budgeted costs could impact the organization in a negative manner. Hence, control of costs is essential (Pich, Loch and Meyer, 2002). Project closure- After completion of all activities associated with the project, it is well evaluated by the clients and the project is brought to a closure. The responsibilities of project associates continue even after the project is completed. These responsibilities are essentially maintenance and ensuring throughout delivery of output. Most organizations after the completion of projects consider running it on testing basis and to check whether the outputs procured, be it in terms of services or products are as per the needs of the organization. Additionally, it becomes essential to continuously run maintenance systems and ensure that the project productivity remains high throughout its life (Stevenson and Sum, 2009). In case of setting of projects which involves developing a new business subsidiary, the duration of the projects are longer. Similarly, there also exist projects which are of extremely short durations, such as development and implantation of new software for a business. An important aspect associated with project management is the elimination of risks. A project is associated with a number of different types of risks such as demand fluctuation in the market, lack of resource availability, human resource risks, natural calamities, changes in government regulations and other unprecedented events. Such occurrences may require project managers to alter their operational plans. Timely delivery of output and to ensure that each phase of the project is completed on time is crucial aspects associated with project management (Fuller, Valacich and George, 2008). Before undertaking projects, organizational administrators are required to ensure that they adequately fit into the business model. Projects are basically undertaken as they aid the organization by bringing in novel products and technologies, increase business capacity and also facilitate in procuring new market opportunities (Love, Edum-Fotwe and Irani, 2003). Project managers are often faced with the crucial responsibility of managing expectations of each stakeholder associated with the project. While consumers demand quality, shareholders and financers expect high profitability. Also, it may sometimes occur that new stakeholders become associated with a project post their initiation. This might alter few of the earlier laid down arrangements. The success of a project however lies in the effective management of resources, needs of stakeholders, cost control and timely delivery of end results (B. Urli and D. Urli, 2000). Research Questions The prime research questions analysed in the current paper are as follows: What are the benefits and challenges experienced by Starbucks in managing projects? How project management has helped the company to run its newly established business in the Gulf region, more effectively and efficiently? Research Methodology Research philosophy Research philosophies are essentially a cluster of theories and knowledge which forms the background for a given study. Research philosophies are factors which impacts a person’s belief, way of thinking and his reaction to different elements and conditions existing in the external environment. Such factors influence the manner in which a researcher forms perceptions, collects data and meets the set objectives of the research. In general, there are three important types of philosophies which researcher use (Patton, 2005). These are essentially interpretivism, positivism and realism. The positivism philosophy is based on the theory of objectivity. As per this philosophy, researchers are required to base their findings and conclusions upon scientific and known information. The individual beliefs of the researcher have less significance in this type of information. Experimentation and realistic observation are involved in this type of research.. The interpretivism philosophy states that a research work cannot always be object and is seen to be often subjective of an individual’s beliefs and knowledge. The interpretative approach is used when the research objective is related to a social or behavioural phenomenon rather than something scientific. The realism philosophy is based on the actual conditions and situations existing in the external environment (Patton, 2005). The current research is mainly based on the interpretativism philosophy. The subject matter of the current paper is to analyse the project management processes and related aspects existing for Starbucks for their newly established business unit in the gulf region. The project would take into consideration the beliefs and perceptions of the researcher and how the collected information has been interpreted. The interpretivism approach adequately states that the conclusions and the judgements developed may become altered when the data becomes differentiated or when there are changes in t he external setting. Since the subjective matter for the current paper is subjective in nature, the interpretivism approach is seen to be most suited (Kumar and Phrommathed, 2005). Research approach Research approaches are essentially of two important types. These are essentially inductive and deductive approaches. While the inductive technique is related to development of new theory, the deductive theory concentrates upon analysing existing theories and formation of conclusions based on evaluations of different types. The current research is based upon the deductive technique. The deductive process evaluates existing findings and proved theories to test their relevance. The current study does not include the formation of new theories through observations. As a result, the inductive approach cannot be stated to be suitable for the current study. The deductive approach also provides adequate scope to the researcher to include his beliefs and thoughts and accordingly make interpretations. The deductive approach is also seen to blend well with the interpretivism philosophy. Moreover, since the current study is related to analysing the project management process of Starbucks in the Gulf region, the availability of data is highly crucial to form suitable conclusions. The subject matter of the research work is such that the knowledge and perceptions of the researcher would adequately impact the final conclusions formed. Considering such aspects, the deductive approach can be considered to be most suited (Kothari, 2011). Data Collection: Secondary Sources The current paper utilizes the secondary data collection techniques. Secondary data mainly refers to the information procured from journals, books and other publications. Online resources are an important form of secondary information. Secondary data are essentially the pre existing information which has been developed through earlier research works. They are readily available and researchers are not required to invest much time and effort towards procuring information (Patton, 2005). The current research paper is basically regarding the project management systems existing for Starbucks. Since such information is largely internal for an organization, procuring primary data is close to impossible. As a result, much reliance and dependency is created upon the secondary data sources. The researcher in the current paper would crucially evaluate information procured from outside the organization, such as various online publications and periodicals to evaluate Starbucks project management processes. Secondary data is utilized in many research works as it is easily available and less cost intensive to be procured. Secondary data is highly economical and saves much time and effort. Moreover, as compared to primary data, secondary data is more exhaustive and aids to formulate elaborate conclusions. Secondary data sources must however be carefully be selected. If the information procured is not accurate, it may lead to wrong judgements. Therefore, the sources from which the secondary data is procured must be reliable and relevant with the area of study (Patton, 2005). Findings and analysis On the basis of the research carried out, the project management process at Starbucks primarily consists of the following important aspects: Planning the expansion: Starbucks in the Gulf Coffee giants across the globe are slowly enhancing their presence in the Middle Eastern regions. The western markets are seen to become saturated as well as exhibiting a slow growth. Consumers in the western markets are reluctant to spend on retail products. The gulf region is seen to display higher demands for caffeine products attracting many coffee giants such as Starbucks. Moreover, since the last few years, the market for Starbucks in the U.S is seen to have become stagnant and sales rate have declined radically. As a result, the company has considered growing into other markets and especially develop a strong market base in the Middle Eastern region. In the Middle East, the prime competitors for Starbucks are Caribou, Costa Coffee and Gloria Jeans. The franchisor for Starbucks in the gulf region is basically the Alshaya Group. The group has established more than 250 stores in the Middle East. Starbucks, since the last few years is seen to be doing well in different parts of the Gulf region. The efficient project management techniques implemented by the company has facilitated it to achieve such extensive success in the market of the Middle East. The expansion of Starbucks into the gulf regions is based on the following important aspects (Entrepreneur Magazine, 2006). Location and store layout Starbucks has expanded into the gulf region by setting up their stores in easily accessible locations. The store design and layout takes into consideration the convenience factor of consumers (Kerzner, 2013). In the Middle East, consumers prefer to spent adequate time while eating outside. Hence, for those consumers who prefer consuming food and beverages within the store, ambience becomes an essential factor. Starbucks ensures that consumers who take away products as well as dine within the store find the internal environment to be favourable. Waiters and customer attendants are extremely cordial. The store set up is not complicated and consumers can easily move around. Cash counters are placed centrally so that consumers do not have to move to the end of the store to make payments. In the U.S, store ambience was not an important factor as long as the quality of the products was supreme. However, in the gulf regions consumers seek quality in every dimension. This was a vital aspect considered by Starbucks while designing their stores in the gulf regions (Baker, Murphy and Fisher, 2008). Managing input Starbucks has established a highly sustainable supply chain process for its store in the Middle East. The company procures high quality coffee beans from reputed suppliers across the globe. The beans are then suitably roasted and blended to attain the right aroma and consistency. The roasting and blending is carried out at the brands own centres. There are six roasting centres for Starbucks worldwide. Although the number is small for such a large coffee retailer, the company ensures that through efficient supply management, timeliness and well established transportation networks, raw materials reach their stores on time (Schwaber, 2004). Continuous improvement Figure: Starbucks efforts towards innovation Starbucks believes in continuous improvements, frequent alteration and enhancement of their offerings in the market. Projects are therefore implemented in a manner such that they provide adequate scope for continuous improvements. This is essentially fulfilled by keeping a vigilant eye on the needs of the consumers. In the beginning, when Starbucks established their store in the gulf, coffee flavours were kept similar to what it had been in the U.S. Later on, the company realised that consumers in the Middle East also preferred light coffee variants. Hence, new flavours had also been introduced. The entire Starbucks system of working is flexible whereby frequent changes in their offerings can be made (Cooke-Davies, 2002). In order to be able to provide new products, Starbucks is required to frequently change their production process by introducing new technologies, methods of working and providing training to employees to enhance their skills. Controlling and quality management One of the most important competitive advantages for Starbucks is their high quality products. Hence, the company lays special emphasis upon controlling and monitoring the production activities. Starbucks production chain has a number of testing and quality control centres at sufficient intervals. The materials used by Starbucks in their production process are expensive and its loss may lead to enhancing the cost of production. It therefore becomes essential to control the usage of materials to procure cost advantages (Koskinen and Pihlanto, 2008). Training Starbucks relies upon its team of efficient employees to make it attain success. The company recruits the best talent and ensures that their talent facilitates Starbucks to achieve productive advantages. The company frequently trains its staff across all stores to make them aware of new products and technological improvements. In terms of training, introducing the Starbucks culture to the employees in the Middle East was a significant challenge as they had less familiarity with the culture existing in the U.S based organizations (Larson, 2004). Stakeholder management Providing timely and accurate information to stakeholders is considered essential by the managers and administrators at Starbucks. Stakeholder needs and its satisfaction are an important element in an organizations long term success. Starbucks remains in constant communication regarding its activities with shareholders and suppliers (Barkley, 2004). Risk and competition Entering any new environment is a big challenge and risk mitigation is extremely crucial. The competitors of Starbucks in the gulf region are fewer as compared to that in the U.S. Moreover, the high quality of Starbucks coffee and their immense brand image provide the firm with significant advantages (Milosevic and Srivannaboon, 2006). Social involvement Project managers must effectively merge the business model with the social requirements. Starbucks mangers believe that meeting social needs through their activities is crucial for long term organizational success. Socially, conscious companies in the Middle East are seen to attain greater profits and brand recognition (Morris and Pinto, 2010). Conclusion Starbucks being one of the strongest players in the retail coffee chain is required to live up to its name by delivering strong and superior performance. Starbucks has experienced less difficulty in managing their expansion project in the Middle East. By establishing a highly integrated business model which emphasizes upon profits as well as delivering high quality coffee, the Starbucks business is seen to do extremely well in the Gulf region. Starbucks being a new player in the Gulf coffee retail, still lacks market and consumer familiarity. Starbucks also relies on market research and analysis to understand potential risks and develop strategies to mitigate the same. Reference list Baker, B. N., Murphy, D. C. and Fisher, D., 2008. Factors affecting project success. Project Management Handbook, Second Edition, 1(1), pp. 902-919. Barkley, B., 2004. Project risk management. New York: McGraw Hill Professional. Cooke-Davies, T., 2002. The “real” success factors on projects. International journal of project management, 20(3), pp. 185-190. Denicolo, P. and Becker, L., 2012. Developing Research Proposals. London: SAGE Publications. Entrepreneur Magazine, 2006. Project Management. [Online] Available at: [Accessed 5 May 2015]. Fuller, M. A., Valacich, J. S. and George, J. F., 2008. Information systems project management: A process and team approach.: Pearson Prentice Hall. Kerzner, H. R., 2013. Project management: a systems approach to planning, scheduling, and controlling. New Jersey: John Wiley & Sons. Kloppenborg, T., 2011. Contemporary Project Management. Boston: Cengage Learning. Koskinen, K. U. and Pihlanto, P., 2008. Knowledge management in project-based companies. Basingstoke: Palgrave Macmillan. Kothari, C. R., 2011. Research methodology: methods and techniques. New Delhi: New Age International. Kumar, S. and Phrommathed, P., 2005. Research methodology. New York: Springer. Larson, E., 2004. Project management structures (pp. 48-66). New Jersey: John Wiley & Sons. Love, P. E., Edum-Fotwe, F. and Irani, Z., 2003. Management of knowledge in project environments. International Journal of Project Management, 21(3), pp. 155-156. Meredith, J. R. and Mantel Jr, S. J., 2011. Project management: a managerial approach. New Jersey: John Wiley & Sons. Milosevic, D. and Srivannaboon, S., 2006. A theoretical framework for aligning project management with business strategy. Linking Project Management to Business Strategy, 1(1), p. 35. Morris, P. and Pinto, J. K., 2010. The Wiley guide to project, program, and portfolio management. New Jersey: John Wiley & Sons. Patton, M. Q., 2005. Qualitative research. New Jersey: John Wiley & Sons, Ltd. Pich, M. T., Loch, C. H. and Meyer, A. D., 2002. On uncertainty, ambiguity, and complexity in project management. Management science, 48(8), pp. 1008-1023. Schwaber, K., 2004. Agile project management with Scrum. Washington: Microsoft Press. Stevenson, W. J. and Sum, C. C., 2009. Operations management. Boston: McGraw-Hill/Irwin. Turner, J. R., 2014. The handbook of project-based management. New York: McGraw-hill. Urli, B. and Urli, D., 2000. Project management in North America, stability of the concepts. Project Management Journal, 31(3), pp. 33-43. Read More