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Management in Starbucks Starbucks has become one of the most popular places to take care of the fix of coffee. Since being established in 1971, in Seattle Washington, it has taken a lead in the coffee shop industry. Thriving off the imagery of superior coffee and family atmosphere, it has become part of the daily routine in many people’s lives. It is the leading coffeehouse within the country, offering a selection of teas, and other treats. Also, it is commonly used a social or work area. Starbucks has managed to become a multibillion-dollar company, but recently profits have started to flatline. Despite being successful in the U. S Starbucks has faced many managerial problems such as limiting growth, social responsibility, and globalization.
These things have caused the business to run into obstacles, and ultimately led to a change CEO. Part of the strengths of Starbucks is the use of high-priced cup of coffee and upscale look to create the image of a superior company. Taking a close look, the managerial problems are more evident. Every company owes it to the customer and themselves to deliver their best product to make money, while treating every customer with equal respect. This has become a growing problem for Starbucks. In April, two black men asked to use the bathroom but were denied because they did not make a purchase. Then they sat at a table, waiting for someone to arrive. This is supposed to be in align with the policies of Starbucks, however, the store manager asked them to leave. When they refused, the manager called the police. After the arrival of the police, no one was charged with a crime. It instantly seems like a case of prejudice, and the two men pressed charges against the company for the unfair treatment.
Customers and employees up raged, they began to engage in protest and strikes. According to an article from CNN. com, “Starbucks CEO Kevin Johnson apologized for the arrests, calling them reprehensible. ” They have recently reached money agreement and are currently working together to work on ways to prevent this in the future. In addition to this, the men were offered full paid tuition to Arizona State University. This served as a major hit publicly for the company. In counter efforts, Kevin Johnson closed stores all stores nationwide for racial bias education training. Another instance in which they failed in this area. Another problem in this area according to Liza Featherstone from alternet. org, The company has been union busting, and other unlawful practices. She continues to say, “In New York, the National Labor Relations Board has accused Starbucks of violating workers’ freedom of association in about thirty different ways, including illegally firing, threatening and disciplining workers for supporting the union.
Managers forbade workers from talking about the union, even when off-duty or wearing union buttons. ” At the end of court rulings, baristas were reinstated and issued a payout. Labor practices were forced to change. With problems like this, it has forced Starbucks to attack them immediately and change the company’s practices. This relates to managerial problems because they all involve social responsibility, and Starbucks is falling short upholding that balance to their customers, and even employeesOne of Starbucks most favorable points also happens to be one of its biggest obstacles.
Since booming, Starbucks has reached a standstill in earnings. This relates to the topic of limited growth because failure to predict economy can lead to standstill. Managers have to figure out to tackle their problems of having too many stores, failure to reinvent, high prices, and not as many people coming in. Many of their ideas like acholic beverages have been failed experiences. Other outcomes include the closing of stores, and strategically opening new ones. Last, and perhaps Starbucks biggest failure has been its ineffectiveness in foreign markets. The business has had continued failures in foreign markets. Places that it has been unsuccessful include Australia and Israel.
This failure could be due to the difference of culture, or failure to tailor the company to specific geographics. This has caused the company to take a loss and close many stores. Another outcome is that it caused them to reinvent its policies and strategies. This has proven to be successful because business has been prosperous in China. This relates to globalization because of the attempt to build its brand across the world. Starbucks has been a fast-growing business, but when looked at through a different lens it has been through many ups and downs. Like many huge Companies, it has many managerial problems. It has faced many issues dealing with social responsibility, limited growth, and globalization. Starbucks has made great efforts to confront their problems head-on. While being successful, it still has problems.
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