Starbucks Stakeholders Starbucks Operates Over

Starbucks Stakeholders

Starbucks operates over 7000 coffee shops around the world. These stores represent the world's largest coffeehouse chain and one of the largest food service chains. As a result, they have a wide range of stakeholders, both internal and external. This paper will examine the various stakeholders of Starbucks, their roles in the company and how the company's activities affect them.

Internal Stakeholders

Internally, Starbucks stakeholders include the employees, the shareholders, subsidiaries and the management. Starbucks impacts its employees in several ways - income, working conditions and benefits. The employees impacts Starbucks by producing one of the company's most important outputs, what the company terms the Starbucks Experience. This concept is a critical source of competitive advantage for Starbucks, and the company relies on the employees to deliver it. It takes the form of exceptional customer service and the building of relationships between employees and customers. Starbucks has a wide range of strategies to foster the desired output from this group of stakeholders, including compensation, organizational culture and reinforcement techniques like the Snapshots mystery shopper system. Employees are therefore a critical stakeholder for Starbucks.

Another internal stakeholder is the shareholders. The shareholders hold an ownership stake in the company, are entitled to vote at the annual general meeting and receive a portion of the company's profits. While the shareholders rarely exert strong influence over the company's operations, they do have a significant stake in the company's performance. The company has recently renewed its commitment to its shareholders (Portland Business Journal, 2008), who had seen diminished returns on their investment in recent years (Reuters, 2008).

Starbucks has a small handful of subsidiary units that form another group of internal stakeholders. For example, Starbucks owns Seattle's Best Coffee, which primarily services the institutional market. They also own Coffee Equipment Co., which manufactures and markets the high-end Clover coffee machine (Allison, 2008). The growth of this subsidiary now rests in Starbucks' hands. Another subsidiary is the Tazo Tea Company, based in Portland, or. These subsidiaries contribute significantly to Starbucks' future plans, and their employees rely on Starbucks to help drive growth in their operations.

Lastly, the management team makes up another internal stakeholder group. Separate from employees, management at Starbucks takes on different roles to help the company meet its objectives. Some of these roles are related to the Starbucks experience (product development, for example); some related to organizational growth; and some related to profitability. The company relies on management to guide the firm towards its objectives and implement the systems that will facilitate the achievement of corporate goals. Management relies on the company for compensation.

External Stakeholders

Starbucks also has a wide range of external stakeholders. The first group is the customers. Starbucks customers rely on the company for product and service. Starbucks relies on its customers for its revenue. Therefore, meeting the needs of the customers is imperative to Starbucks' operations. To do this, they have developed the Starbucks Experience and are constantly working towards improvements in their products and service offerings.

Another external stakeholder is the Starbucks union. This union represents some of Starbucks' workers and is attempting to organize all of them. The union relies on the company and the workers for its existence through union dues. The employees rely on the union for promotion of their rights and desires. For the company, the union represents a focal point for labor negotiation, which can help to deliver employee consistency throughout the chain.

Starbucks has many business partners. In Asia, Starbucks has partnered with local firms that understand the nuances of their respective local markets in order to set up coffeehouses (Asia Times, 2006). They work with franchisees in China, Japan and now the United Arab Emirates as well. Furthermore, Starbucks partners with various companies around the world to provide branded cold coffee drinks for the retail market. These partners include Suntory in Japan (Starbucks, 2008) and Pepsi in North America (Reuters, 2008). Starbucks also partners with Kraft Foods to bring its products to retails markets in the U.S., Canada and the UK (Ibid.).

Another group of external stakeholders is the suppliers. Starbucks has many suppliers, from paper cups to ingredients to espresso machines. Because of their size, Starbucks is a major customer for many of their suppliers, who therefore depend on the coffee company for their revenue streams and profits. Starbucks relies on their suppliers for a constant supply of consistent, high quality products. This stakeholder relationship is strong for both groups.

A key group of supply-side stakeholders for Starbucks are coffee growers. The company's size makes them one of the world's largest purchasers of coffee beans. It is not just size that makes Starbucks important, however. Their high visibility means that they are in a position of influence with regards to their coffee purchasing decisions. The coffee industry worldwide is representative of global agricultural issues such as sustainability and fair trade farming. Coffee producers are a major stakeholder for Starbucks because the firm has staked its reputation on high quality coffee. They need to develop sustainable sources of quality beans. For the coffee producers, Starbucks' position with regards to their needs can have a tremendous impact on the ways in which other coffee purchasers treat them as well. Starbucks holds meetings with key stakeholders to address their concerns and forge a stronger, mutually beneficial partnership (Starbucks, 2004).

Another external stakeholder for Starbucks is the local communities in which they operate. Each neighborhood or community is impacted by Starbucks' activities in some way. The company must take the impacts of their actions into account when moving into different areas. To this point, there has been little concern raised over Starbucks' impact on communities. The firm's retail outlets are seen to improve street life and help build community. In many cases, a new Starbucks is welcomed as a boon to the local community because of this (Harris, 2006).