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Change Management Of Starbucks

Paper Type: Free Essay Subject: Marketing
Wordcount: 3412 words Published: 30th May 2017

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The current international situation for Starbucks seems to be part of their business and the reorganization of an emerging proved by become so his goal of becoming a world leader in a difference in people’s lives makes the whole world. This is achieved very close to as evidenced by Starbucks in international current markets and the success of these companies. However, net revenue roce 3 percent to $ 2.5 billion for the quarter the fourth 2011 compared to $ 2.4 billion in the fourth quarter 2007th quarter of Close 28 13-week period September 2011 reports, Starbucks recorded a net profit of $ 5.4 million to $ 105.1million in restructuring charges and other processing costs of the strategy included. Net income was $ 158.5 million for the same period a year Mr. Go re blast actions announced in July 2011, to close at approximately600 stores in the U.S. and 61 operated stores companies in Australia, and reduce by about 1000 and opened in filled positions leadership structure and non-store organization

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The Porter Five Forces Analysis and SWOT matrix (see appendix) shows that besides the basic strategies of Starbucks, the external environment and internal characteristics of the organization Starbucks offer a favorable condition for growth to be used. The only significant threat of competition from the entry of new competitors. Porter has already recognized that the rivalry is intense in a particular area, at least reduce the rate of profit for the company or industry players (1998). Therefore, Starbucks profits dropped last year because of the increasing intensity of competition in the industry. Outside the competition has exacerbated the economic crisis, the situation so that customers spend less and reduce the number of times they visit a Starbucks that store sales decline in Starbucks stores. However, because of its long experience and reputation of the brand, Starbucks is still the dominant player in the specialty coffee sector. This allows the company to use that position to take advantage of himself and the pressure on its competitors. But the question is, and “Why now is the lack of Starbucks?” Despite its remains the dominant player in this sector, what happened to his company’s strategy? These questions have been answered already made in the analysis of the value chain in the past. Therefore, it is necessary to formulate strategies to implement a shift in business model and business processes. Recommended strategies and actions After determining the causes of the current decline of Starbucks, it is necessary to formulate a plan to address these problems. change can not, without specifying the actions undertaken to achieve. As important issues have already been identified, strategies to mitigate these problems to make. Proctor (2000) states.Thus, based on the above assessments, is the following recommendations. Formulate marketing marketing is an important factor in any society. As noted above, the Company not yet established a marketing plan to attract a gap in the supply chain (see Appendix ), which resulted in a significant deterioration in the company history, brand image / reputation. The company must have a direction in the field of marketing to improve their image and reputation. Marketing is not only super positions of advertising activity. marketing planning is a process by which organizations seek to understand market conditions and the needs and preferences of customers, while taking account of other organizations that compete on the market (Bradley 2003). It is to satisfy the customer wants and needs, and managing relationships with stakeholders (Proctor, 2000). Printers (1954) also noted that a company only two functions, which one is the marketing and the other is innovation. The goal of marketing is to create new customers and communicate with all its stakeholders (customers, shareholders and employees). A company can not set effectively implement any action, if no communication was made with all stakeholders. It is the role of marketing. In the case of Starbucks, it makes little reference to marketing, as evidenced by the small part of the budget allocation for the so-called value-added activities. It seems that the company is its strong operational skills more in the way marketing has been placed in the lateral line dependent. Although they have already worked to justify the change of conditions market should begin to focus the company and marketing. Competitive advantage can be obtained and maintained with the help of marketing. Proctor (2000) argues that competitive advantage should be guided by the market.

Printers (1954) found that marketing is the distinction, the function of a single company. We must focus on Starbucks a significant amount of resources in improving its marketing activities. To gain competitive advantage, a company must first define their strategy. An authority in the creation of strategies to gain competitive advantage, Michael Porter. The author defines as “a strategy to create a unique and valuable position, involving a different set of activities” (Porter 1998b, p. 55). The marketing strategy is to formulate a different set of activities that are a unique and valuable position to be created in the market. The strategy includes the creation of a plan to identify the market conditions and to identify which market segment, the company will focus on. The objectives should be to provide guidance in the implementation of marketing strategy. He is above that Starbucks is a generic strategy of transactions discussion with emphasis on differentiation have been identified. This strategy can, however, must now be reviewed and adapted. Starbucks now has to communicate with its customers. Starbucks needs to create new customers and new markets in order to avoid saturation of the current market segment. Its marketing goal should focus on creating new markets and, if necessary, to accommodate new products or product lines to new customers. The company can create new products that appeal to the lower market segment, a segment that the company had not yet fully exploited. Its pricing strategy may vary with the creation of these new products to generate new customers in the lower end of the target market. The company currently markets communications and management practices of the customer relationship must also be changed. As evidenced by the survey online, the customer does not feel a significant improvement in Starbucks. If ever there are improvements that the company has done in recent years, these changes are not effective in communicating to its customers. These improvements in retail sales or customer / relationship must be communicated with his clients to realize that Starbucks is to improve the “Starbucks experience” that his clients have disappeared in the company to maintain. On the issue of exclusivity, the company needs to develop its modern luxury to be improved. Although it was recommended earlier that the company to new customers or market segments to create new, it’s not necessarily a negative effect on the reputation of the brand. What businesses need is a system of rewards and exclusive privileges of membership for its regular customers, especially high-end segment of the market and students who create for the company’s traditional customers. Exclusive privileges and rewards for customers, either individually or in groups, can apply to become a regular member in society, such as complimentary wireless and unlimited and / or free coffee or other products times a week can be made. The company is also a function room in a retail store that cardholders can use exclusive members. These permissions can help improve brand image and reputation of exclusivity. Apart from that, the fees collected from annual membership fees to obtain a company registration. Improve the management of operations In addition to improving their marketing skills, to improve its management as Starbucks store. Operational efficiency: performing similar activities better than rivals perform them (Porter 1998b). However, operational efficiency is not enough to gain or maintain competitive advantage. Porter (1998b) states that a company exceeds its competitors when it provides greater value for customers or can comparable value at lower cost, or the company must do both. It was also higher than the company has identified gaps in the supply chain with their work. The company is rapidly expanding our business, but the quality of its services or its brand reputation has been sacrificed, which in its descent into or to be similar to a chain of fast food is not perceived as a luxury coffee spout. Starbucks has not been able to offer more value to create the same overpriced coffee. The company needs to store its management by improving the appearance of improving each outing. The company may also be necessary to further improve its customer service and improvements to customer knowledge, as already mentioned. Adding or upgrading facilities and shops ornaments are a new look to retailers. Adding a function room, as indicated above, for its exclusive card carrying members will increase even more the experience of exclusivity and luxury of all the houses of Starbucks Coffee. Also notable in the online survey, the attention of Starbucks customers, where, as a business friendly environment. That’s why the company needs to improve performance by more environmentally friendly. It also has a special focus on fair trade materials, since this practice calls for own customers. The company has aligned its resources to these improvements in order to maintain its current position in the market and attract more customers and gain competitive advantages and competitiveness. Improve the market to improve its trading standing order, Starbucks must show that the company is profitable. This is only possible if the company continues to show that it has a lasting order of brand / reputation and image recognition. It has significantly curb the current trend of declining sales and profits. But to do so, the company is to initiate and implement changes within the organization, as recommended above. The stock analysts observe the performance of the shares of Starbucks and profitability. Therefore, the company built its reputation on the significant and important improvement in their marketing and operational activities to show that society is at the head of its future and they continue to improve their current leadership in the industry specialty coffee. Apart from that, the company can demonstrate it has the ability to get into new markets has. In this way, analysts are quick to the high valuation of the company, and investors will not be considered for their money in shares of Starbucks. Improving leadership necessary, especially changes that Starbucks, its leadership must be changed. Not that the manager will be deleted, but their abilities, skills and attitudes need to be improved. No organizational transformation will be complete when the leaders are not likely to change. Organizational change can only occur if the right processes are implemented and leaders have been at the forefront of these activities. Lead the organization / change is not an easy task for a manager or director of a company. This was an attempt that failed due to the supervision of leaders. While Starbucks does not seem to have failed leader, it is necessary that its leaders must know exactly what to avoid when running to changes in the organization. Kotter (2007) identified eight major errors committed by organizations. They are as follows:

• Not a big enough sense of urgency;

• Do not create a powerful enough guiding coalition;

• Without a vision;

• Through the mediation of vision by a factor of ten;

• Do not remove obstacles to the new vision;

• Not systematically planning and creating short-term gains;

• Declaring victory too soon, and

• Not anchoring changes in corporate culture.

Starbucks employees should avoid the above error. Above or below average implementation of the above may also lead to failure. Therefore, the implementation of recommended changes should be heads of state and government, what exactly is needed, ie the implementation of plans, as they are formulated. Although in some cases, learning from a transformative experience as a melting pot known effective in creating a leader (Bennis and Thomas, 2002), such events are rare. It is therefore relevant for a guide to education and training to create. A leader of Level 5 is the one with the highest skills in the management hierarchy (Collins 2005). Level 5 leaders are not born, they are created. What is needed is a leader of level 5 is to be a large amount of political will and a useful property of humility (Collins 2005). This property can not necessarily be owned by Starbucks executives to effectively implement changes in the organization and to persuade all the members in action. Manz and Hostager Bastien (1991) in their study, a framework that managers can be bi-cycle model to adopt in order to involve members of the organization in change. The first cycle includes the participatory cycle in which employees of State and Government on participation and, while seeking to improve employee development and self-direction. The second round of the connotations of the transaction cycle, that incentives make it easier for a contribution through a process of exchange, in which participants will be met at the personalized vision in exchange for various services. The bicycle model can be used in conjunction with strong political leaders. Starbucks in the organization, which could be effective in implementing the changes recommended above. However, managers, and not all tasks. There is a need to plan some organizational changes and balanced measures to implement this plan. Duck (1993) proposes a system of delegation of tasks within a team. A “team” model of organizational change is needed to complete the organizational transformation. The Director may form a team that is responsible for implementing the changes. The team must also balance their responsibilities by carefully selecting the information to all members of the organization and what they may be denied until the actual implementation, as well as others that are just simply reluctant to change to prevent the creation of steps that would prevent the implementation of changes. As Davison (2003), in any organization, particularly important mentioned, there are always differences between members, whether differences of opinion, perspective, or action. As such, a leader in the art must have the ability to take advantage of these differences. The properties mentioned above or the characteristics of heads of state must be owned by the current direction of Starbucks. The recommended changes in the organization of business processes and models are not easy. These recommendations include a radical change in the organization requires all members to act. Thus, if the leaders of society to the forefront of this change to be. You must have the necessary qualities of a leader, as described above so that organizational change takes effect.

Conclusion and recommendations

Change management is the demand of the day for Starbucks. Maybe it’s time that society needs their existing business models, practices and strategies to see if these models are still adjusting to market conditions. The company in the industry for two decades, and is undoubtedly the industry leader for almost the same time. However, as market conditions change, as evidenced by current events and the continued globalization of markets, the company may need to reform its strategy. Starbucks may have already saturated the market with its current strategy or in a different direction, be the one who walked away from the objective position in the market. As such, the company must implement a change. Management practices may need to be revised. As a printer (1954, p.37) said: “It is the client, what a business is determined.” In this sense, Starbucks identify what the customer wants, what they need and what they prefer otherwise. As part of its practice in previous years, Starbucks seems to be contained in the expansion alone, unaware of the communication with customers, who have their preferences. Note that the customer changes the taste and preferences are themselves constantly. Therefore, changes in market conditions as well. In this context, Starbucks could monitor changes in customer behavior and market conditions. Thus, in recent months, the performance of Starbucks will continue on a downward trend. It is imperative that the causes of this decline must be identified and measures must be taken. The remedy, however, must be long term, a term that is not short. Although short-term measures are needed to reflect changes in tactics, it is important to set a goal, or that correspond to revise, if necessary, the current goal, the realities of today’s business and the future of the company. It was recommended that Starbucks should focus on marketing and improving operational efficiency. Marketing is the missing element in a Starbucks practice in recent years. It is therefore significant weight given to this area. Apart from that, have the leadership of the company and be transformed. It was recommended that if the leadership of the organization of a certain behavior, characteristics or skills that are necessary to implement the changes that are successful in the organization to accept. Several practices and principles have been described in this document will serve as a guide or reference guide in the practices of leaders and managers of Starbucks. These principles are defined as a product of studies by academics and practitioners in the field of area management, marketing and other economic. It is strongly recommended that Starbucks should implement the change within the organization to maintain the current level of industry and to achieve competitiveness.


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