UNIVERSITY OF THE EAST

CALOOCAN
College of Business Administration

It happens millions of times each week – a customer receives a drink

from a Starbucks barista – but each interaction is unique.

Ann Margarette I. Sambilay

BMG 114
BSAcT3H/MWF/11:30-12:30
Dr. Rosalinda B. Lacerona
 I. TITLE OF THE CASE:

II. TIME CONTEXT: 2015 (The Company began in the 1971. The problem occurred in 2015 but
the company still exists in the present time.)
III. SUMMARY/ABSTRACT

In 1971, three Seattle entrepreneurs, Jerry Baldwin, Zev Siegl and Gordon
Bowher started selling whole bean coffee in Seattle’s Pike Market. They named the store
Starbucks after the first mate in Moby Dick. And by 1982, the business had grown to five
bustling stores, a small roasting facility and a whole-sale business selling coffee to local
restaurants. On the other hand, there is a person whom marketing coffee makers to a
number of retailers, he is Howard Schultz, a Vice President of US operations for
Hammarplast. Through marketing, Mr. Schultz meets the three Seattle entrepreneurs and
invited him to join in their business. He became the manager of retail sales and marketing.
After a year, upon returning from his visit to Italy, he noticed that coffee plays a big role in
the daily lives of every person he then proposed a business plan with the three
entrepreneurs. But, they were less enthusiastic and said that they did not want to be in a
restaurant business. Mr. Schultz then decided to put up his own coffee business. On April
1986, he opened his coffee bar and named it II Giornale, it was named after an Italian
newspaper. It becomes successful and opened several branch in Vancouver, Canada. The
year 1987 has been a remarkable event for everyone. The three entrepreneurs decided to
sell Starbucks for $4 million to Mr. Schultz.
The author sees it to be a problem that they have a lot of employee benefits
program and they support different activists in our current situation of having financial and
economic crisis. With this, the author tries to find an effective strategy on how they will
earn money, aside from their main and present products, to be able to continue support
these people.

A. VISION
To establish Starbucks as the premier purveyor of the finest coffee in the world while
maintaining our uncompromising principles while we grow.

B. MISSION
To inspire and nurture the human spirit – one person, one cup and one neighborhood
at a time.
C. CORE VALUES
OUR VALUES
With our partners, our coffee and our customers at our core, we live these values:
Creating a culture of warmth and belonging, where everyone is welcome.
Acting with courage, challenging the status quo and finding new ways to grow our
company and each other.
Being present, connecting with transparency, dignity and respect.
Delivering our very best in all we do, holding ourselves accountable for results.
We are performance driven, through the lens of humanity.

D. CORPORATE SOCIAL RESPONSIBILITY OF THE COMPANY

Being a Responsible Company

At Starbucks, we have always believed in the importance of building a great,

enduring company that strikes a balance between profitability and a social conscience.

Ethical Sourcing: We take a holistic approach to ethically sourcing high quality

coffee. This includes responsible purchasing practices, supporting farmer loans and forest
conservation programs. When we buy coffee this way, it helps foster a better future for
farmers and a more stable climate for the planet. It also helps create a long-term supply of
the high-quality beans we’ve been carefully blending, roasting and packing fresh for more
than 40 years.
Environmental Stewardship: We share our customers' commitment to the
environment. And we believe in the importance of caring for our planet and encouraging
others to do the same. We are working to reduce our environmental footprint through
energy and water conservation, recycling and green construction.
Community Involvement: From the neighborhoods where our stores are located to
the ones where our coffee is grown – we believe in fostering thriving communities.

E. AWARDS AND RECOGNITION RECEIVED

Since the beginning, Starbucks has been a different kind of company. One that is
dedicated to inspiring and nurturing the human spirit. Committed to serving the finest
coffee, creating an exceptional customer experience, and being a great place to work. We are
grateful to our partners (employees) for making us the company that we are. And we are
honored to be acknowledged for their efforts.
Here are some of our recent awards and recognition.
One of the “Most Admired Companies in America” (Fortune 2003–2015)
One of the “World’s Most Ethical Companies” (Ethisphere 2007-2015)
“Employer of the Year” (U.S. Business Leadership Network Annual Leadership
Awards 2014)
100% Rating on the Corporate Equality Index (Human Rights Campaign
Foundation 2015)
 One of the “Top 10 Employers of the Year in China” (Zhaopin.com’s Annual Best
Employer Award 2014)
One of the “Best Workplaces in Canada” (Great Place to Work Institute 2011-2014)
“Retailer of the Year” (Visual Merchandising and Store Design 2013)
One of the “World’s 50 Most Innovative Companies” (Fast Company 2012)
One of the “World’s 50 Greatest Leaders” (Fortune 2014)
“Business Person of the Year” (Fortune 2011)

Howard Schultz, Starbucks Chief Executive Officer

One of the “Highest Rated CEOs”
Glassdoor –2014
IV. STATEMENT OF THE OBJECTIVE
To maintain being the industry’s coffee giant.
To support their employees financial and non-financial.
To support different economic groups that is fighting for their rights.
To make people satisfied on their product and service.
To expand the area of business by producing different products.
To expand their business by having different branches all over the world.
To promote healthy living.

V. CENTRAL PROBLEM
How can the company maintain having high revenues despite of supporting
employee with different programs and supporting the egalitarians?

VI. AREAS OF CONSIDERATION (SWOT ANALYSIS)

a. Mr. Howard Schultz appreciates his people
very much.
b. There’s a lot of coffee drinkers all over the
world due to the cold weather and the
nature of their job.
c. Every year, they were able to think of
different promos and stunner to their
a. They have high product process and most
of their customers are the wealthy to
average income earners.
b. There’s always a long line in their store and
the seats are occupied for longer hours.
c. Nowadays, financial crisis is really
dominating around the world.
 customers (ex. planner, discounts, gift
certificates, tumbler designs).
d. They have developed a strong brand image
because of the taste of their coffee and
their treatment to their employees.
e. They brew their own coffee beans and the
employees are really trained very hard.
d. Imitable products. Since they are very
popular, their competitors can imitate the
taste of their products.
e. Caffeine is always said to be addicting and
bad for everyone’s health.

a. Employees undergo different trainings and
the company makes sure that they are
ready to work.
b. Employees have their own educational
online program.
c. Product expansion. They now offer their
coffee beans so that people can make a
quality Starbucks coffee wherever they are
d. They now supply their coffees to hotels
and offices.
e. Expansion in different countries so that
they can also have more investors.
a. New entrants that have low prices but also
possess great taste of their products.
b. They need to maintain and adhere to their
support statements to the egalitarians or
else these people will protest against them.
c. Severe weather conditions that can affect
the production of their coffee beans.
Natural calamities that will affect their
coffee bean trees and may result to coffee
rusts.
d. Terrorism that can cause high prices of
commodities and the people might just
stay on their home for safety.
e. Unhappy or unsatisfied customers that
made statements against them through
social medias.

VII. ALTERNATIVE COURSES OF ACTION

a. Good brand image towards a. In reality, not all people

1. They can have a small
penny can or box on their
cashiers so that their
customers can contribute
to their employee benefit
programs and to the groups
that they are supporting.
2. Find an organization or
investors that adhere to the
rights of these people so
that they can have a
companion in supporting
these individuals.
the public.
b. Harmonious relationship
will be established.
c. People are not forced to
donate, only if they are
interested.
a. There are a lot of
organizations wanted to
fight for the rights of
employees nowadays.
b. The public will appreciate
this good deed and in
return will patronize more
give money.
b. Financial crisis. Everyone
needs to save money for
their own needs.
c. This will earn only a little
and might not sustain the
needs of these persons.
d. They public might think
that are responsible for
welfare of this people.
a. Not all people support gay
marriage and this might
be down side for the
investors.
b. The investors might think
that Starbucks is slowly
becoming some kind of
 their products knowing
that the money they spent
for coffee goes with
something.
c. The investors can be easily
attracted because they
know the goals of the
company.
d. The employees will be
working hard to show
everyone that it is worth
support them.
e. The money will come from
other resources not just
with the sale of their
product.
charitable institution.
c. All job hunters might just
want to apply to Starbucks
because of their benefits.
d. Employees, on the other
hand, might not do their
job well because they
know that upon applying,
they will automatically get
these benefits.
e. After some time, the
investors might pull out
their investments and the
company might find it
difficult to support these
people.

a. The customers can help a. The employees might feel

3. Allocate a certain
percentage of the price of
their goods or every cup of
coffee means a certain
amount of money to be sent
in their funds.
without being pressured of
giving money.
b. The employee will serve
their customers very well.
c. This can help the company
even in a little and simple
way.
d. It is allocated properly
from their revenues.
e. They can earn more
because the public surely
cares for their programs.
f. Good brand image.
pressured in return to
attract many customers.
b. Not all people support the
things that the company is
supporting.
c. They might lose
customers especially if the
person is really against on
the idea.
d. They can’t just easily pull
out this feature because it
will mean something.

VIII. STRATEGY FORMULATION OR RECOMMENDATION

I therefore conclude that the best solution to the problem is alternative course of
action number 2 which is to find an organization or investors that adhere to the rights of
these people so that they can have a companion in supporting these individuals. As we all
know, Starbucks have a lot of branches all over a single country which means that they have
employed thousands of people. Even though their foods have high prices, there might come
a time that the market can no longer avail their products due to the current financial crisis
they are experiencing. It is good to have some companion in generating money to support
these individuals so that if that time comes, the employees and the company itself will not
suffer a great loss. Also, it is better and easier to have support with organizations and
investors that understands and values the rights of these people.
In addition to this, the people whom fight for their rights don’t get much support
from the government so it is a good idea that Starbucks chooses to support them.
Supporting doesn’t only come in words, it also comes with acts. It is good to have investors
 whom can contribute to the expenses of the company because these investors will surely
not neglect the possibility of them being bankrupt. They will do things for themselves and
for the company to earn profits.

IX. PLAN OF ACTION

1. Find potential investors and organizations that support the program of the company.
2. Conduct a meeting and made them invest to Starbucks.
3. Establish an agreement and contract that will compromise both of the parties.
4. If agreed, orient the employees and the people concerned about it so that they will now
what is at stake.
5. Execute the program.

X. POTENTIAL PROBLEM
1. What if there will be no investors and organizations wanted to partner on Starbucks?
2. What if the government interferes with this plan and threatens the company?
3. What if the market misunderstood and protests not to eat in Starbucks as long as we don’t
change the plans and ideas?
4. What if we lose our investors because we pursue this plan?
5. What if we gained a lot of employee and unable to sustain their needs after?

XI. CONTINGENCY PLAN

1. We can change some of the terms in contract so that we can have these investors.
2. Find a legal counsel and make sure that we didn’t by pass any law.
3. Explain very well to the public that every person is accountable for the welfare of the
others.
4. We will understand these people or make agreements that will compromise them, the
company and the people we are supporting.
5. We will find a way to sustain their needs.

Sources
https://www.starbucks.com/about-us/company-information/mission-statement
https://www.starbucks.com/about-us/company-information/starbucks-company-profile
https://www.starbucks.com/about-us/company-information/starbucks-company-recognition