Two Concepts of Strategy Development and Organization Learning Apply to Starbucks Corporation Research Proposal

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¶ … strategy development" and "organization learning" apply to starbucks corporation

Strategy Development and Organization Learning

At the Starbucks Corporation

Today's organizations strive harder than ever to develop strategies that further increase and consolidate their competitive positions within the market. A relevant example in this instance is the coffee monolith Starbucks. The company was founded in 1971 in Seattle, Washington by intellectuals Zev Siegl, Jerry Baldwin and Gordon Bowker and its operations revolved around the import and sales of coffee beans. In 1987, they sold the company to Howard Schultz (today's Chairman of the Board and CEO), who introduced innovative ideas and turned the organization into the success it represents today (Website of the Starbucks Corporation, 2008). Under Schultz, the management at Starbucks developed and implemented a wide series of strategic approaches in terms of quality, performance, customer satisfaction or employee on-the-job satisfaction. Two of the most relevant courses of action saw the implementation of the concepts of strategy development and organization learning.

2. Strategy Development at Starbucks

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The process of strategy development refers to the identification of existent issues within and outside the organization, the identification of the parties affected by the matter, and the development and implementation of a most suitable course of action to resolving the identified issues and sustaining the entity in reaching its established goals (Bryson, 2004). Along its nearly four decades of existence, the Starbucks Corporation has developed and implemented a wide array of strategies to resolve its problems and achieve its objectives. To best understand this, one should look at some clear examples of how the coffee giant has developed and succeeded in several of their strategic developments.

TOPIC: Research Proposal on Two Concepts of Strategy Development and Organization Learning Apply to Starbucks Corporation Assignment

A first innovative strategy occurred during the 1980s, are revolved around the operations of the company. Prior to Howard Schultz's joining the company, Starbucks would simply import and sell coffee beans. Schultz however suggested that the organization begin preparing the coffee and selling the beverage, instead of the beans. This was a time in American history when coffee consumption was a thing to be done in the privacy of one's home, rather than public places or the street. Schultz's suggestion was unwelcome by the founders, but the current CEO still implemented it and achieved great success.

Another story of a successful strategy development is closer to today and revolves around the Starbucks stores. They can be found on nearly every street and they welcome all potential consumers. They reveal a pleasant mood and much of the corporate success has been due to the atmosphere created. The Starbucks stores are easily accessible and their numbers abound - in 2005, the company was opening an average of three stores per day (Stevens, Wrenn, Loudon and Mansfield, 2005).

Making the stores easily accessible however was not sufficient to ensure a flow of customers. This would be further addressed through the development of further strategies. In this order of ideas, the management at Starbucks recognized the diversity of their customers and accordingly diversified their product offering. "Starbucks stores offered a choice of regular or decaffeinated coffee beverages, a special "coffee of the day," and a broad selection of Italian-style espresso drinks. In addition, customers could choose from a wide selection of fresh-roasted whole-bean coffees [...] a selection of fresh pastries and other food items, sodas, juices, teas, and coffee-related hardware and equipment" (Thompson and Gamble, 1999).

Then, the leaders of Starbucks have also recognized the importance of integrating the latest technologies in their operational processes. They purchased newer and better machineries which revealed a triple benefit: reduced costs, increased operational efficiency and easier job for the Starbucks employees, further increasing their on-the-job satisfaction. Also, the company integrated the technological developments to better satisfy the customers. In this order of ideas, the Starbucks stores now offer wireless connection to the internet. They even set the basis to a strategic partnership with Hewlett-Packard, through which they would offer music services (Enderle, 2004).

More recently, the organization understood the importance that their reputation and the protection of the environment and of the communities play for its success and responded by developing and publishing an annual Corporate Social Responsibility Report. "Our commitment to conduct our business in ways that produce social, environmental and economic benefits to the communities where we operate is integral to our overall strategy. In an effort to remain open, transparent and accountable, we publish a Corporate Social Responsibility annual report" (Starbucks 2007 Annual Report).

3. Organization Learning at Starbucks

The specialized literature in the field of organization learning (organizational learning, or the learning organization) is extremely vast, with numerous definitions being forwarded. The most simplistic definition of the concept is that it encompasses the theory according to which the economic entity must implement operations focused on learning and continuous improvement of employees and a continuous research and adaptation to the emergent needs of the micro and macro environments (Easterby-Smith, Araujo and Burgoyne, 1999). What is interesting about the concept of the learning organization is that it focuses the attention of the managers in two directions: the internal environment of the organization and the external environment of the organization (Nonaka and Takeuchi, 1995).

The Starbucks Corporation has been a learning organization even before the economics theory came up with the concept. The most relevant examples of how the coffee monolith successfully integrated the features of the internal and external environment lay in the above examples of strategic developments. Schultz's idea to sell beverages instead of beans for instance, is based on his observation of the Italian market, which during the 1980s, was already selling coffee-based beverages in bistros. Through the process of organization learning, he adapted the idea to the American market and successfully implemented it. "By importing into his own company the knowledge he gained from his (external) sources in Italy, Schultz developed a new framework for entrepreneurial action that was composed of several strategic assets gained through cognitive learning" (Harrison and Leitch,)

Then, another relevant example in terms of the external environment is that of Starbucks' incorporation of the technological advancements to generate benefits for themselves as well as their stakeholders (e.g. new and better machineries, wireless internet connections, music services).

Relative to the internal environment, the Starbucks managers strived to implement a corporate culture of friendship and trust, in which all the employees (partners) would feel cherished and valued. The list of incentives offered to the staff members is rather extensive, incorporating features such as promotion opportunities, flexible schedules, premiums and bonuses or training programs and specialized consultancy on the path to professional formation. "Not only are the Starbucks' front-end employees the highest paid in the restaurant industry, Starbucks was the first to institute a benefits package for part time employees, provide stock options for most of their workers and offer a full-week of paid training for every new member" (Harrison and Leitch, 2008). Also, another feature of the learning organization as applied by Starbucks revolves around their full integration of cultural and national minorities. The company values and embraces the cultural diversities of their staff members. "At Starbucks, diversity is an essential component of the way we do business. We believe so strongly in embracing diversity that it is the second guiding principle in our Mission Statement. We strive to create a diverse workplace in which every partner's voice is heard and in which all our partners will succeed while learning from one another" (Website of the Starbucks Corporation, 2009).

Proof of the success registered through the application of the principles of organizational learning within the entity and upon the employees stands the lowest employee turnover rate, as compared to similar organizations (Harrison and Leitch, 2008).

4. Final Remarks

The Starbucks Corporation is the ultimate epitome of corporate success. Throughout its nearly four decades of existence, the coffee giant has developed and implemented a wide series… [END OF PREVIEW] . . . READ MORE

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