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Starbucks Case Study - Essay Example

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Starbucks Case Study

The location for the first store was, in Seattle in the “touristy Pikes Place Market”. The name of the store was Starbucks Coffee, Tea and Spice. The setting of the store was to quote the website “modest, hand-built nautical fixtures”. On one wall was filled with whole bean coffees while another had shelves of coffee products. Peet owned a store called Peet’s Coffee and Tea. It was in this store that Peet thought of how these three would-be founders of how to brew the coffee beans in a manner that brought out their flavour (Thompson and Gamble 1997). In the beginning, according to the official company website, the method of brewing this coffee was the European way. This method was chosen because it brought out the full flavour of the beans. In addition, the name of the company was drawn from a character in the Moby Dick who loved coffee. The company logo was in continuance of this romantic ideal which was a two-tailed mermaid encircled by the company’s name (Thompson and Gamble 1997). Between 1982 and 1985, the company hired Howard Schultz as head of marketing and overseeing retail stores. By then, the company had four stores within Seattle. After a while of experience, a lot of a challenges, as well as, resistance from the top management, Schultz quit to form his own company called “II Giornale”. This was the company that in 1987 purchased Starbucks and by 1992 had established 161 stores. It was after 1992 that the company went public in a highly successful initial Public Offering (Thompson and Gamble 1997). Starbucks Culture as per Hofstede’s Cultural Dimensions Hofstede a Dutch social psychologist came up with four dimensions, which were later reversed upward to six (Piepenburg 2011). In his opinion, these dimensions influence human thinking, organizations and institutions in a certain, predictable manner (Piepenburg 2011). These dimensions are power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity. According to Hofstede, the first dimension is Power Distance Index (PDI). In this dimension, the main focus is on how a society or organization is stratified. Equality or inequality is the major reference point of this dimension (Piepenburg 2011). Going back to the Starbucks, there is a difference in terms of the Power Distance. Under the original founding partners, the company did not seem to hold the employees in high esteem. A case in point was the request for the extension of healthcare to part time workers, which had been turned down. Under Schultz, the company took a different path. This involved extending the coverage to all employees working 20 or more hours, and it was similar to the coverage extended to the fulltime employees (Thompson and Gamble 1997).This was mainly driven by Schultz’s humble background and the desire to not let others go through what his father had to endure. Another dimension is Uncertainty Avoidance Index (UAI). This dimension is defined as the extent to which people within a culture feel threatened by uncertain or unknown situations (Thomson and Baden-Fuller 2010).Accordingly Uncertainty Avoidance Index is higher in countries that citizens are more emotional and motivated by inner nervous energy (Thomson and Baden-Fuller 2010). In this case, the UAI in the United States was lower than it was in France when Starbucks was making a foray into this country. This indicates that the general French conservative citizens preferred their traditional coffee houses to the ...Show more

Summary

Starbucks (Name) (Institution) (Course) (Tutor) (Date) Introduction The Starbucks chain of coffee stores has a long history, which began in 1971. It was then a humble, single store founded by three partners: Jerry Baldwin an English teacher, Zev Siegel a History teacher and Gordon Bowker a writer…
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