Case Study: Starbucks Corporation Because of rapid globalisation over recent years, competition around the world becomes more intense, especially for the service industry with similar products. The most critical point for business to achieve success is not only the quality of products they supply, but the atmosphere of cooperating and the amount yielded from teamwork in retail sales. Therefore, it turns out to be essential for companies to motivate, reward and train their employees to be the best quality personnel. Starbucks Corporation, the most famous chain of retail coffee shops in the world, mainly benefits from roasting and selling special coffee beans, and other various kinds of coffee or tea drinks. It owns about 4 000 branches in the whole world. Moreover, it has been one of the most rapid growing corporations in America as well. The reasons why Starbucks is popular worldwide are not only the quality of coffee, but also its customer service and cosy environment. Starbucks establishes comfortable surroundings for people to socialise with a fair price, which attracts all ages of consumers to come into the stores. Besides, it is also noted for its employee satisfaction. The turnover rate of employees at Starbucks was 65% and the rate of managers was 25% a year. However, the turnover rates of other national chain retailers are comparably high. Compared with them, the turnover rate of Starbucks is much lower than other industries on average. As a result, Starbucks is one of the optimal business models for strategies of employee motivation, customer satisfaction and cooperation of teamwork. Starbucks began by three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who knew each other at the University of Seattle, in 1971. A sales representative, Howard Schultz, decided to be a part of Starbucks, as director of marketing and retail sales, after he realised the atmosphere and environment of the company. In 1985 Howard Schultz chose to establish a new coffee shop, named II Giornale, in Seattle. After the next two years, due to the successful strategy of Schultz, the original three owners of Starbucks decided to sell their corporation to Schultz. Then Schultz gathered other investors and changed the name of II Giornale to Starbucks. He sought to pursue his dream to make everyone taste his coffee, so he focused on the rate of expanding. At that time, he thought that the most efficient way to grow the number of branches was to set up new stores in other places. In I987, Starbucks had the first overseas store in Japan. Until the end of 2002, Starbucks has developed from 17 stores to 5 688 spreading over 30 countries it has grown over 300 times in these ten years! In Fortune magazine, Starbucks was ranked the 11th best company to work for in 2005 in the USA and then rose in 2006 to 29th. In 2007, it was ranked as the 16th best. In the same year, Starbucks was also voted as one of the top ten UK workplaces by the Financial Times. Motivation is a vital factor for business in the production process. Labourers are not machines and cannot always do the same task with equal passion. The chief executive officer of Starbucks corporation, Howard Schultz, considers that the reason for success in Starbucks is not coffee but employees. He firmly believes that the spirit of Starbucks is employees and feels honoured about the values of Starbucks employees. Starbucks offers an interactive structure that makes personnel throw up themselves into their jobs. The managers in Starbucks treat each employee equally and all the staff are called partners, even the supervisors of each branch. To narrow the gap between managers and employees, they also co-work with the basic level staff in the front line. Due to this, they can maintain a good management system and create a much closer and more familiar atmosphere than other places. Not only do employees enjoy their job but customers are also affected by their enthusiasm. Starbucks has a well-organised communication channel for employees. It places great importance on labour. For example, managers plan the working hours per worker and arrange the schedule of time off, according to the workers wants to meet their requirements. There 4 are interviews weekly to see what employees needs are. The partners have the right to figure out what is the best policy for them, and the directors show a respect for each suggestion. Starbucks even wants every employee to join in making and developing plans, then work together in achieving their goals. As a result, the policies and principles are communicated between all staff, and there is no limitation in employees personal opinions. All employees, including informal personnel, are offered a great deal of welfare policies, for instance, commodities discounts for employees, medical insurance (including health, vision and dental) and vacations. Moreover, the partners who work over 20 hours a week are entitled to benefits. We invest in the well-being the mental, physical, and financial health of every partner through our practices, policies, and benefits. This work is grounded in the belief that we are at our best when we create inclusive and welcoming environments, where we uplift one another with dignity, respect, and kindness. And we are hard at work uplifting our communities and building environments in our stores that are welcoming and safe. We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose. Therefore, one of our core strategies is to invest in and support our partners to differentiate our brand, products, and services in the competitive specialty coffee market, including the following areas of focus: We recognise the diversity of customers, partners and communities and believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures. Working under these principles, our Partner Resources Organisation is tasked with managing employment-related matters, including recruiting, and hiring, onboarding, and training, compensation planning, performance management and professional development. Our Board of Directors (the Board) and Board committees provide oversight on certain human capital matters, including our Inclusion and Diversity programs and initiatives. As noted in its charter, our Compensation and Management Development Committee is responsible for periodically reviewing Starbucks partner resource programs and initiatives, including healthcare and other benefits, as well as our management development and succession planning practices and strategies. Our Audit and Compliance Committee works closely with the Risk Management Committee, led by Starbucks Chief Finance Officer and general counsel, to monitor and mitigate current and emerging labour and human capital management risks. Furthermore, our Nominating and Corporate Governance Committee, in consultation with management, including our chief partner officer and chief inclusion and diversity officer, annually evaluates the effectiveness of our social responsibility policies, goals and programs, which also include partner-related issues. These reports and recommendations to the Board and its committees are part of the broader framework that guides how Starbucks should attract, retain, and develop a skilled workforce that aligns with our values and strategies. We are committed to creating a welcoming and inclusive environment. We believe it is our responsibility to advance racial and social equity, and we are committed to furthering that work with intention, transparency, and accountability. We continue to welcome our partners, customers, civil rights, and community leaders, along with our chief inclusion and diversity officer, to advise us along this journey. We have demonstrated a history of investing in our workforce by offering competitive salaries and wages by continuously assessing the current business environment and labour market. We have consistently made enhancements in wages to attract talent to support our growth strategy and to elevate the customer experience. To foster a stronger sense of ownership and align the interests of partners with shareholders, restricted stock units are provided to eligible 5 non-executive partners under our broad-based stock incentive programs. Furthermore, we offer comprehensive, locally relevant, and innovative benefits to all eligible partners. To help our partners succeed in their roles, we emphasise continuous training and development opportunities. These include, but are not limited to, safety and security protocols, updates on new products and service offerings and deployment of technologies. Training provided through our Pour Over sessions, which are a series of inspiring talks with thought leaders to help partners understand how to bring the Starbucks Experience to life, include a wide variety of topics such as achievable goal setting, giving, and receiving constructive feedback and effective engagement with customers and communities. To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labour market to refine our compensation and benefits programs and other resources available to our partners. We previously achieved and currently maintain 100 percent pay equity in the U.S. for women and men and people of all races for partners performing similar work. We have also achieved gender pay equity in China and Canada, two of our largest markets outside of the U.S., and we made a commitment to achieve gender pay equity in all company-operated markets. Further, we have formulated payequity principles which provide equal footing, transparency and accountability as best practices that help address known, systemic barriers to global pay equity. As of October 2, 2022, Starbucks employed approximately 402 000 people worldwide. In the U.S., Starbucks employed approximately 258 000 people, with approximately 248-000 in company-operated stores and the remainder in corporate support, store development, roasting, manufacturing, warehousing, and distribution operations. Approximately 144 000 employees were employed outside of the U.S., with approximately 140 000 in company-operated stores and the remainder in regional support operations. Some Starbucks partners in company-operated stores are represented by unions, though it is an immaterial portion of our total workforce. We believe our efforts in managing our workforce have been effective, evidenced by a strong Starbucks culture and a good relationship between the company and our partners. Starbucks establishes a well-developed system to keep good relationships between managers and employees. As mentioned, they use the title partner regardless of the level of the worker, which narrows the gap of bureaucracy. Furthermore, they co-work in the first line to eliminate the distance between different statuses. The numbers of employees are usually from three to six. Such a small size helps staff get to know each other easily and deeply. Suggestions and complaints made by employees are treated as equal importance. In the same way, they have a right to participate in the process of revising company policies. In that case, each staff member thinks that they also play an important role in company operating, and they jointly work out the direction of Starbucks. All this gives employees respect and a sense of participation. Starbucks contributes part of its profits to public service. Therefore, staff have an idea that what they do for Starbucks is for society as well. Regarding goals, Starbucks sets a challenging and specific goal, and it allows all partners to decide the direction.

Discuss how organisations can use Porters five forces model, to determine the level of industry attractiveness making specific reference to how industry forces affect the level of competition in an industry. Make use of world-of-work examples to support your discussion.