The choice of a CEO signals potential actions to stakeholders about a firm\u2019s potential actions. Howard Schultz served as Starbucks CEO for many years; the firm achieved multiple successes during his service. As of April 2017, Schulz became executive chairman of Starbucks\u2019s board while Kevin Johnson, a former CEO of Juniper Networks and a 16 year veteran of Microsoft, assumed the CEO position for the coffee giant. Johnson\u2019s background may find him concentrating on the firm\u2019s digital operations, information technology practices and supply chain operations as a means of increasing Starbucks\u2019s effectiveness and efficiency.<\/p>\n
<\/span><\/p>\n Many brick and mortar stores have experienced decreasing sales in the United States as online traffic has increased. Interestingly, 2014 Starbucks sales store operations increased 5 percent in the fourth quarter; this 5 percent uptick in revenue came from increased traffic (2 percent from growth in sales and 3 percent in increased ticket size).<\/p>\n Additional and more sophisticated technology applications may be the driver of this increase in revenues. To stimulate sales, Starbucks is ramping up its digital tools such as mobile payment platforms. Customers now can place online orders and pick them up in about 150 Starbucks outlets in the Portland, OR area. Besides leadership and a focus on technology, Starbucks receives suggestions, ideas, and experimentation from its employees. Starbucks views its employees, called baristas, as partners who blend, steam, and brew the brand\u2019s specialty coffee in over 21,000 stores worldwide. Schultz credits the employees as a dominant force in helping it to build its revenue gains.<\/p>\n To incentivize employees further, Starbucks is among the first companies to provide comprehensive health benefits and stock option ownership opportunities to part-time employees. Currently, employees have received more than $1 billion worth of financial gain through the stock option program. An additional benefit for U.S. employees is the firm\u2019s program that pays 100 percent of workers\u2019 tuition to finish their degrees through Arizona State University. To date, one thousand workers have enrolled in this program. In mid-2018, Walmart offered subsidized college tuition to its employees as a means of attracting and retaining talent in a tight labor market. Walmart\u2019s actions may demonstrate the value of Starbucks\u2019s approach to supporting employees\u2019 efforts to earn a college degree.<\/p>\n When developing new storefront concepts, Starbucks innovates. For instance, it is testing smaller express stores in New York City that reduce client wait times. Today, Starbucks emphasizes online payments as a means of increasing the speed of customer transactions. It now gives Starbucks rewards for mobile payment applications to its 12 million active users. Interestingly, this puts it ahead of iTunes and American Express Serve with its Starbucks mobile payment app in terms of the number of users.<\/p>\n To put its innovation on display, Starbucks opened its first \u201cReserve Roastery and Tasting Room.\u201d This is a 15,000 square foot coffee roasting facility and a consumer retail outlet. According to Schultz, it is a retail theater where \u201cyou can watch beans being roasted, talk to master grinders, have your drink brewed in front of you in multiple ways, lounge in a coffee library, order a selection of gourmet brews and locally prepared foods.\u201d Schultz calls this store in New York the \u201cWillie Wonka Factory of coffee.\u201d Based on this concept, Starbucks opened small \u201creserve\u201d stores inspired by this flagship roastery concept across New York in 2015. To attract customers in the afternoon, the firm is \u201crolling out new cold coffee and tea drinks and is introducing happy hour promotions featuring cold beverages.\u201d<\/p>\n These technological advances and different store offerings are also taking place internationally. For example, Starbucks is expanding a new store concept in India in smaller towns and suburbs. These new outlets are about half the size of existing Starbucks cafes in India. In China, Starbucks is opening roughly one store daily and is rolling out its Roastery and Reserve brands to penetrate the country further.<\/p>\n Sources: D. B Klein, 2018, Here\u2019s how Starbucks plans to conquer China, <\/span>The Motley Fool<\/i>, <\/span>www.fool.com<\/a>, March 25; J. Jargon, 2018, Starbucks trying to woo afternoon customers, <\/span>Wall Street Journal<\/i>, <\/span>www.wsj.com<\/a>, May 8; S. Nassauer, 2018, Walmart to pay certain college costs for U.S. store workers, <\/span>Wall Street Journal<\/i>, <\/span>www.wsj.com<\/a>, May 30; I. Brat & T. Stynes, 2015, Earnings: Starbucks picks a president from technology industry, <\/span>Wall Street Journal<\/i>, <\/span>www.wsj.com<\/a>, January 23; A. Adamczyk, 2014, The next big caffeine craze? Starbucks testing cold-brewed coffee, <\/span>Forbes<\/i>, <\/span>www.forbes.com<\/a>, August 18; R. Foroohr, 2014, Go inside Starbucks\u2019 wild new \u201cWillie Wonka Factory of coffee\u201d, <\/span>Time<\/i>, <\/span>www.time.com<\/a>, December 8; FRPT-Retail Snapshot, 2014, Starbucks\u2019 strategy of expansion with profitability: to debut in towns and suburbs with half the size of the new stores, <\/span>FRPT-Retail Snapshot<\/i>, September 28, 9\u201310; L. Lorenzetti, 2014, Fortune\u2019s world most admired companies: Starbucks where innovation is always brewing, <\/span>Fortune<\/i>, <\/span>www.fortune.com<\/a>, October 30; P. Wahba, 2014, Starbucks to offer delivery in 2015 in some key markets, <\/span>Fortune<\/i>, <\/span>www.fortune.com<\/a>, November 4; V. Wong, 2014, Your boss will love the new Starbucks delivery service, <\/span>Bloomberg Businessweek<\/i>, <\/span>www.businessweek.com<\/a>, November 3.<\/p>\n What competitive advantage or competitive advantages do you believe Starbucks seeks to establish? What are the main challenges the firm faces as it tries to maintain the advantage or advantages you identified?<\/p>\n<\/li>\n Identify three or four capabilities you believe Starbucks possesses. Of these, are any a core competence? If so, explain your reasoning.<\/p>\n<\/li>\n Starbucks\u2019s mission is \u201cTo inspire and nurture the human spirit\u2014one person, one cup and one neighborhood at a time.\u201d What actions do you recommend the firm take to reach this mission?<\/p>\n<\/li>\n As Starbucks\u2019s new chief executive officer and strategic leader, what key challenges does Kevin Johnson and his firm face?<\/p>\n<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":" The choice of a CEO signals potential actions to stakeholders about a firm\u2019s potential actions. Howard Schultz served as Starbucks CEO for many years; the firm achieved multiple successes during his service. As of April 2017, Schulz became executive chairman of Starbucks\u2019s board while Kevin Johnson, a former CEO of Juniper Networks and a 16 […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[9],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/questions\/36686"}],"collection":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/comments?post=36686"}],"version-history":[{"count":0,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/questions\/36686\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/media?parent=36686"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/disciplines?post=36686"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/paper_types?post=36686"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/tagged?post=36686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Case Discussion Questions<\/h3>\n<\/header>\n
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