Budget proposal development and implementation framework

¶ … Change Starbucks Needs

According to Starbucks.com (2010) Starbucks was incorporated under the laws of the State of Washington, in Olympia, Washington on November 4, 1985. It is well know for creating the "third-place" for its customers based on a tradition of selling coffee, lattes, mochas, pastries, and brewing equipment. Recently it has introduced hot breakfast and lunch sandwiches, healthy snacks, and even waffles. Its logo precedes its name as one of the companies that has done a great job of branding itself and positioning itself to be an average household name. Celebrities, political officials, teachers, businessmen, and more are seen carrying its cups of hot and cold beverages in the morning and all throughout the day as they go about their business and routines.

Recently, however, the company has face challenging times marketing an expensive cup of coffee in a conservative spending environment. According to Starbucks Annual Report (2009), Starbucks has seen a 14% decline in its profit over the past five years. Starbucks Mission statement as reported on Starbucks.com (2010) is, "To inspire and nurture the human spirit -- one person, one cup and one neighborhood at a time." Starbucks has achieved its goal of being known for coffee, but it has not connected to the first part of its mission. The average investor, customer, consumer does not think about Starbucks as a company that inspires and nurtures the human spirit, but rather as an expensive, almost elitist coffee shop.

In order to keep with their Mission Statement, Starbucks Coffee Company needs a change that will help it connect to its goals and desires as a company. It is proposed that Starbucks become an inspiration and a nurturer of the human spirit by eliminating waste and providing recycling options in each of its company operated stores beginning in the United States.

According to Starbucks Annual Report (2009), Starbucks has 4364 Company operated stores. If Starbucks gave each store $225 each year, to create a strategy in order to recycle the disposable materials, it would cost them, $981,900. Starbucks reports that is known for giving its stores incentives. In a recent discussion with Store Manger, Jennifer K., she stated that Starbucks is regularly giving her store incentive dollars to motivate her team for a common on goal. She stated that Starbucks, corporate, has created incentive plans as small as $50 per store, and as large as $500 per store to develop sales strategies, employee bonuses, and competitions around goals with other district stores. As a store manager, she sees the amount of waste her one store goes through on any given day, and questions the ethics surround how much product is dumped, destroyed, or disposed of. She believed her store would participate in such a plan and that it would help her respond to the increasing amount of customers she hears from in a given week asking her when Starbucks is going to begin a recycling program. As of this writing, she was unaware of anything the company was doing to increase the awareness or address these concerns.

In recent years, Starbucks has "turned off the water," in the dipper wells where their frothing spoons were rinsed after each use (Starbucks.com 2010). This was largely in response to the amount of customer complaints about how much water Starbucks was wasting in any given year. This simple step of not leaving the water running and only turning it on as needed, has saved the company thousands of dollars in water waste, and has improved their visible conservation efforts to their customers. Providing a Green Recycling bin, and encouraging customers to bring in their own cups, has the potential to save the company even more. Starbucks.com (2010) states, "Our customers are also concerned with the waste generated from our paper and plastic cups, which are not currently recyclable in many communities. We're concerned too, and we're committed to coming up with innovative solutions that will make our cups universally recyclable or compostable."

It is the proposal that Starbucks, corporate, would give each store $225 in incentive dollars to increase the awareness within its store for recycling needs. On average a recycle bin, the size of a common cafe store trashcan, is less than $10 a piece as found on numerous related web sites and in average home improvement stores. It is expected that a company such as Starbucks would be able to receive a bulk rate on such an item, and therefore, be charged less than half of what a retail outlet would charge. Conservatively, each of these items would cost $5, thus making first year costs not exceed the $981,900 budget.

When baristas got behind the VIA marketing campaign, Starbucks notes that is has already achieved over $1 billion dollars in sales in its first quarter from this product alone (Starbucks.com 2010). It attributes it success mostly to the drive and energy centered on Barista involvement. Future costs of this program would be determined upon the measure of success from company savings, P&L analysis, and profit margin.