Strategic Management- An analysis of Starbucks Corporation Case Study

Employing a manager with excellent management skills influences the success of a company. This paper focuses on an analysis of a coffee Chain company called Starbucks Corporation. The analysis will cover the company’s tensions, strengths, weaknesses, opportunities, and threats. It will also cover how the company engages in social responsibility, and finally, the key lessons learned from the case study and any recommendations for the company.

Tensions

As tensions are expected in many companies, Starbucks is no exception. Before becoming the company’s CEO, Schultz suggested a proposal to the company’s founders. The request talked about creating an espresso bar atmosphere in the US. However, the founders rejected his proposal, and Schultz decided to leave the company and finally started his coffee bar. The fact that the founders turned down the request suggests that they had doubts and uncertainties about whether the espresso atmosphere would work or not. The action signifies tension in the core founders.

These CEOs showed that they did have no trust in Schultz, and even if he stayed in the company after being rejected, he could have remained just a manager with no rights to make decisions. The tension brought adverse effects to Starbucks’ founders as when Schultz started his company, he bought Starbucks, and the founders lost their investment.

SWOT Analysis

Strengths

Starbucks possesses two strengths. According to a magazine report that the case study mentions, the first strength is its quality and services. Producing high-quality coffee, coffee beans, sandwiches, among other products that the company sells, signifies that the company possesses skilled employees, advanced technology, and uses significantly high-quality ingredients to make the products. This marks one strength of the company.

Another strength is quality management and financial soundness. As the case study states, the magazine acknowledged Starbucks’s quality management. That means the company could allocate duties to employees, monitor how the products are made, and manage any activity happening within its surroundings. About financial soundness, it is a strength because the company is saved from having debts that can lead to auctioning. Additionally, financial stability means high-quality operations. These two elements are strengths.

Weakness

One weakness is evident in the case study about Starbucks. Before Schultz bought the company, it had weak leadership. How the core founders responded to Schultz’s proposal of having an espresso bar atmosphere signifies a leadership weakness. Although it was recognized to have quality management, its leadership was weak, which explains why the company later fell. The turning down of Schultz proposal signifies weak leadership because a founder of a company will always listen to a manager since a manager specializes in managing a business. Thus, it was vital for the founders to listen to Schultz, but they failed.

Opportunity

Starbucks has one major opportunity, according to the case study. It was ranked the number one company that produces high-quality products and services. The act of being announced the leading company in coffee production creates an opportunity for the company. It is a form of an advertisement more credibly because people believe what magazines publish. Furthermore, publishing makes the company famous, and it gains more customers. Thus that was an opportunity for it to expand.

Threat

Starbucks had one threat. The introduction of the mobile ordering system posed a threat to the company as they feared losing sales and affecting its objectives of setting up 12,000 new stores. The mobile network was a threat because it is expected that it will always take time before people absorb the changes when something new is introduced. It is similar to the mobile ordering system as some people would find it a bit awkward; others would prefer the previous purchasing method, which might make people not purchase products. Thus, the system was a threat as the company feared it would lose its sales and affect its objectives.

Social Responsibility

The case study mentions that the company was ranked number one in certain factors social responsibility included. However, it does not note the exact social duties the company was involved. Nevertheless, with the company being ranked leading in the foodservice industry and the third most admired globally, it must have been engaged in significantly good social responsibility activities. It applies because it must impact society through perhaps its products and services for a company to receive recognition.

Key Lessons and Recommendations

The case study teaches that good management skills are vital for any business to exist. Starbucks is doing well when Schultz is the manager and failing when he resigns, and at the same time, his new company overthrowing Starbucks suggests he was a good manager. His management skills enabled Starbucks to survive; thus, management skills are crucial for any business. Secondly, fear and tension are enemies to the success of a business. The pressure that Starbucks founders showed in turning down Schultz’s proposal was one step made to the company’s failure. The reason being the turn down made the good manager resign, and the company fell.

Thirdly, using innovation to differentiate a company from competitors will earn its success. The case study reveals that Schultz used innovation to drive its objectives and make it stand out from its competitors, thereby earning recognition as the leading foodservice industry in innovation. In the future, I would recommend a more flexible decision-making platform in an organization that allows managers to make decisions rather than merely the CEOs. The reason being sometimes, the CEOs are just founders without much knowledge of business management. Another recommendation is for companies to consider expanding gradually rather than at one massive instance as Starbucks invested heavily in aggressive store expansion, leading to its failure.

Conclusion

Overall, the analysis has shown that employing a manager with great management skills influences a company’s success. Besides Starbucks having the ability to utilize advanced innovation and being financially stable, it also had a skilled manager who influenced its success. However, when the manager resigned, the company fell, which signifies the importance of an innovative and professional manager like Schultz. As expected of any company, tension, opportunities, threats, strengths, and weaknesses were evident at Starbucks Company. Also, businesses concentrate on non-profit social responsibility activities, and Starbucks was recognized for that in a magazine. Therefore, a company with strong management and innovation-oriented skills is the most pertinent factor for its success.