How is the Innovation impact in Starbucks organization - Essay Example

Starbucks Innovation Starbucks has remained a top competitor in its industry, which is gourmet café-style coffee beverages. Caribou Coffee and Java Central are some industry competitors. Though the competitors also offer a variety of channels in which to purchase their products, Starbucks remains the industry leader. Innovative sales initiatives and store practices remain top priority for the organization. Layout for all new stores is developed on computer with software for cost estimating.

This not only reduces costs for development, but also helps regional managers to keep costs of new locations below target figures. Planning of new Starbucks spaces down to the last square foot, including layout of cases and brewing equipment allows managers and company representatives to work more efficiently. Starbucks is continuously looking for new ways to offer its products and expand its product lines. Developing partnerships with other food companies such as Kraft, PepsiCo and Dryer’s Grand Ice Cream has allowed the company to reach more customers with more channels for product sales.

Starbucks also has established licensing agreements with United Airlines, Marriott Host International, Aramark, Nordstroms and Barnes and Noble to offer products in Hotels, airports, book stores, department stores and college campuses. Strategies for global expansion include choosing “a reputable and capable local company with retailing know-how in the target host country to develop and operate new stores” (Thomson & Gamble, 1999). Starbucks seeks talent within its organizational structure, so that executives can continue to focus on specific tasks such as buying and planning.

Once a hub is established in a major city, managers known as zone vice presidents are relied upon for regional development. Starbucks Innovation 2 Experts responsible for regional development also become leaders in teaching Starbucks culture and mission to new managers. Those already familiar with Starbucks processes are brought in from other regions to help set up new sites. New store managers and those from other regions spend quite a bit of effort in making sure new employees learn all processes.

Baristas or customer service and brewing specialists receive 24 hours of training in all aspects of service. Starbucks expects employees to brew and serve coffee in a very defined and specific process. New managers receive extensive training of up to 12 weeks to ensure that specific processes are managed competently in each store. Control of product quality and satisfaction is top priority with Starbucks. Each new employee must learn how to grind beans, bag coffee without air, steam milk and serve shots of espresso.

Strict guidelines for how often coffee should be brewed, temperature range for steamed milk, number of seconds for preparing espresso shots and many other fine details are expected to be followed. Starbucks offers free coffee coupons for customers who are less than satisfied. Strict control processes actually begin with the testing and tasting of beans considered for purchase by executives. “Starbucks standards were so exacting that roasters tested the color of the beans in a blood-cell analyzer and discarded the entire batch if the reading wasnt on target” (Thomson & Gamble).

Not only is quality a top priority, Starbucks aims to provide its customers with products they want. A joint venture with PepsiCo in 1995 originally began with a product called Mazagran. The southern California test market indicated dislike of the product, so the Starbucks Innovation 3 organizations collaborated to develop a desirable product that resulted in Frappuccino. James Higgins describes controlling as “a process of establishing performance standards based on the firms objectives.

” Frappuccino sales quickly grew to ten times the projection made by Starbucks. In this instance Starbucks far exceeds its performance objectives. Design of unique and strict control processes in product quality and in customer satisfaction help the company in remaining an industry leader. References Higgins, J. (1994). The Management Challenge. 2nd ed. Macmillan. Thompson, A & Gamble, J. (1999). Strategic Management. McGraw-Hill Company.