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-You can select a company by yourself. Once you have selected your
1. To what extent does the
3. What internal stimuli have influenced the
-For a specific delineation of the required elements that will
– Business strategy concepts, theories, models
* Week 7: Extended business strategy – The triple bottom line
* Week 8: Strategic leaders
* Week 9: Talent management
* Week 10: ‘Resources’ or people?
* Week 11: Equal opportunity?
The purpose of this report is to analyse the Starbucks’ triple bottom line (TBL) and how it has been successful through its social, economic, and environmental activities. Companies adopt strategies to remain sustainable and to benefit all stakeholders within the business environment. Starbucks was founded in 1971 and since then, it has recorded enormous growth, gaining a considerable market position in the coffee industry globally. Triple bottom line, a concept introduced by Elkington in 1997, encompasses the integration of social, economic, and environmental perspectives to create a sustainable business strategy. Starbucks has adopted various initiatives and strategies for its triple bottom line, making it one of the outstanding companies in the industry for environmental and community stewardship.
Organizations play an important role in social development as well as their environment and adopt strategies to remain sustainable in competitive business environment. The triple bottom line is becoming an obligation to many organizations. The conceptfocuses on how a business tries to benefit all stakeholders within its environment. Many companies have created a strategy to incorporate triple bottom line in their operations by incorporating activities that try to make both business and social environment sound. The benefits of operating in a sustainable business environment cannot be overrated; they range from business efficiency to environmental stewardship. Starbucks is an example of an organization whose strategy is clearly inclined to triple bottom line in its operations.
This paper will explore how Starbucks Corporation has effectively applied the triple bottom line in its operations. It will investigate the extent to which the company’s strategy addresses the triple bottom line and how the company has positioned itself for this strategy. Further, the internal stimuli that have fuelled the adoption of this position will be explored. Starbucks is a well-known company for its involvement in activities that are focused on sustainability. Today, Starbucks has published several sustainability annual reports which are available on the company’s website. This report indicates that the company actively integrates operations and activities linked to social, environmental, and economic perspectives.
Starbucks was started in 1971, at Seattle Pike Place Market, United States (“Starbucks Company Profile”, n.d.). Today, the company serves millions of customers through it’s over 24,000 shops in 70 nations around the world. Starbuck’s success has been attributed to the successful servant leadership of Howard Schultz, who joined the company in 1981. Howard Schultz served as the company’s CEO from 1986 to 2000 and then from 2008 to 2017 (Koehn, 2014).Howard and his team of leadership started programs that ensured Starbucks’ working environment was friendly and various stakeholders were satisfied with the activities of the company.
While discussing the triple bottom line elements of Starbucks, this report is limited to the environment, social, and economic perspectives of the company. While these elements are part of the company’s corporate social responsibility, this essay will barely highlight all issues surrounding social actions carried out by the company. Specifically, this report seeks to describe the extent to which the organization’s strategy addresses triple bottom line, how the company has positioned itself for this strategy, and finally, the internal stimuli that have influenced the organization to adopt this position.
After giving a brief theoretical perspective of the triple bottom line concept, this essay goes on to describe how Starbucks has integrated that concept in its strategy. Starbucks positioning for implementing the strategy will also be discussed, and then finally, the internal motivation for such a position will be discussed. Moreover, at the closing part of the paper, the author gives their conclusions and recommendations, highlighting the significance of adopting a sustainable business strategy.
Triple bottom line and sustainability are two interchangeably used words in the business literature. Triple bottom line concept was forwarded by Elkington (1997). According to Alhaddi (2015), the concept is explicitly founded on the combination of the social, environmental, and financial dimensions of an organization. The triple bottom line is not limited to the traditional metrics of profits, returns, and stakeholder value but also incorporate other issues that might affect operations of a business such as an environment and society. Accordingly, Slaper and Hall (2011) think that TBL is a managerial concept with three perspectives of performance, including social, environmental, and economical. This is different from the traditional measuring frameworks since they include environmental and social measures which might be difficult to give required ways of measurement.
Elkington (1997) thinks that TBL highlights the propagation of the ecological theme in a manner which incorporates social and economic lines. However, according to Alhaddi (2014), just like other sustainability-related concepts such as sustainable growth as well social responsibility, TBL has indicated a positive impact on organizational performance. In the context of this report, triple bottom revealed is engraved in the organizational strategic positioning and internal culture that supports sustainability when it is embedded in its operations. For instance, Heikkurinen (2010) thinks that there is an image differentiation when an organization shows environmental concern. The author thinks that TBL image enhanced business strategic position among its rivals in the same industry. Therefore, the triple bottom line image is a source of business growth in regard to new market opportunities enhanced by the good relations with the local communities where a company is established.
Starbucks is an example of an organization that has imprinted sustainability-related ideologies in its operations. The company conducts its business in a manner which gives its trust and respect from its employees, customers, and the local communities. It operates under the concept of “shared planet” which implies that Starbucks stresses on ethical sourcing, environmental protection, and community engagement. Further, the company believes in creating a good working place for its employees, who they call partners, thus creating an ethical business environment as well as maintaining legal adherence and public policy (Geereddy, 2012). Essentially, Starbucks has incorporated TBL in its economic, environmental, and social aspects in its operations.
Starbucks is a well-established coffee business that is successful in the sector. The main strategy that makes sure Starbucks remain successful is it being an ethical company. In the business perspective, the company has always emphasized on offering high quality products and services to the customers to ensure optimal fulfilment. For premium market offerings, Starbucks has created strategic alliances with coffee planters and distributers. The company claims that its success is anchored on the success of farmers and suppliers who grow and produce its products (Harnrungchalotorn & Phayonlerd, 2013). Helping individuals thrive ensures a long-term sustainability of the top-notch product the company is able to provide to the customers. Moreover, the advertising information of the company is truthful and accurate. Starbucks believes in fair competition without controlling the prices rather, holding talks to reach a consensus on the appropriate market prices for the products and services (Geerredy, 2012). Therefore, to build economic sustainability, organizations have to work with the fact that ethical business operations are crucial and that all stakeholders are responsible for their actions.
In addition to fair economic operations, Starbucks has an intense outlook on environmental stewardship. Since 1992, Starbucks has been working with an environmental mission statement which states that focuses on all facets of business (Geereddy, 2012). Besides this mission, Starbucks has launched various initiatives that help it in achieving the environmental leadership goals. The company is working towards establishing greener stores by pursuing LEED building guidelines and ensure that all its building, designing, and maintaining the stores are all focused on environmental protection. Starbucks is also a founding member of Business Innovative Climate and Energy Policy (BICEP), an organization that advocates for clean energy policies. Starbucks believes in recycling its reusable cups and other recyclable materials to reduce waste and solid waste pollution. To further its efforts in environmental protection, the organization has created strategic alliances with international bodies such as Conservation International to ensure that its coffee is sourced ethically.
The environmental perspective of the triple bottom line should represent the measurements of natural resources as well as show the potential influences to its viability. Slaper and Hall (2011) posit that companies should seek always seek methods to reduce the environmental impact or preserving the existing natural resources such as water and carbon dioxide concentration in the atmosphere as well as reduce the emission of greenhouse gases. It is in this regard that Starbucks has been executing a climate change strategy, focusing on renewable power, energy conservation, and climate adaptation as well as preventive measures.
Similar to economic and environmental excellence, Starbucks recognizes the significance of people in its operations. Its community starts from within and then extends to outside the walls of business operations. To show appreciation to the employees, Starbucks refers to its employees as partners, which is literally true because all employees are given stock options in the organization. The company states that “We seek to seamlessly interweave variables that ensure quality for the customer with literal ownership of the company,” (“Howard Schultz Promises Partners a Better Starbucks Experience in the Future,” 2010). To meet this objective, Starbucks ensures that it compensates its employees fairly, either full-time or part-time, and encourages open communication and independence. Starbucks attempts to establish a working environment that appreciates personal efforts of individual partners. Treating workers as partners is a strategic human resource management that makes them feel significant in achieving the organizational goals. Moreover, the organization ensures that employees work in safe and secure environments by training the partners to protect themselves in case of accidents or injuries.
Besides the internal people, a sustainable company is also interested in the welfare of the community members where it runs its business. According to Vandeveld (2015), Starbucks success is owed to its commitment and investment on people and communities and making a positive impact on societies. Further, supporting social issues creates a positive brand image to a customer. Some of the external initiatives that Starbucks has invested in the community are Youth Action, Ethos Water fund, and the StarbucksFoundation. Essentially, these programs help solve social problems, thus enabling the company to be part of meeting the social needs of its customers.
Positioning is the psychological perspective of a certain brand. For a strategy to be effective, a company must ensure that the customers positively take its efforts to reach them. According to Alhaddi (2014), strategic positioning is the formation of product value in the imaginations of the target audience. Accordingly, Banker et al. (2011) posits that strategic positioning positively contributes to organizational performance. Essentially, strategic positioning captures the resources and capabilities of an organization. Therefore, Starbucks’ positioning includes dimensions such as value, rarity, imitability, and organization (VRIO). The table below shows the VRIO (strategic positioning) analysis of Starbucks. The company has a strong market position with a significant strategic positioning which gives it a competitive edge over its rivals in the global scale. Alongside its triple bottom line strategy, the company values partnerships, both internally and externally, which make it a “good neighbour” thus, strengthening its position in meeting sustainability objectives.
Table 1: Starbucks VRIO Analysis (Geereddy, 2012)
|Resources and Capabilities of Starbucks Company||Value?||Rarity?||Imitability Cost?||Organization?||Competitive Implications|
|Strategic Location In high traffics and highly visible locations across the worldTap into client convince factor||High||High||Low||High||Temporary competitive advantage|
|Global Brand Reputation and Equity The most recognized brand in the world||Yes||Yes||Yes||Yes||Sustainable Competitive Advantage|
|Large Brand Size and Strong Global Presence Operates in over 60 nations as the largest coffee retailerLower input costs||Yes||Yes||Yes||Yes||Temporary competitive advantage|
|Good Corporate Social Responsibility Culture Their stores are environment-friendlyThey create goodwill in the societies they carry their operations.Strong triple bottom line initiatives||Yes||Yes||Yes||Yes||Temporary competitive advantage|
|Customer Loyalty and Followership They have strong brand loyaltyStarbucks card creates value for the customer||Yes||Yes||Yes||Yes||Sustainable competitive advantage|
|Human Resource Management and Culture Ranked among the top worldwide places to work inTreats the employees as partners and values their independence.Strong company culture which improves customer service||Yes||Yes||Yes||Yes||Sustainable competitive advantage|
Starbuck’s mission has been clear from the beginning. Besides selling coffee to its customers, Starbucks aims at educating customers about the culture of coffee and tea consumption. Therefore, the internal stimuli of the company were the need to reach as many customers as possible and creating a friendly place where individuals can meet and talk during their free time. According to Ghafoorzadeh (2013), sensorial stimuli can either be recreational or emotional. Emotional stimuli emanate from emotions that drive actions. For Starbucks, opening a store is more than just generating more revenue, but expanding its culture and educating the clients on the coffee and tea culture. According to Leinwand & Davidson (2016), most organizations do not understand how to link strategy to culture. The authors give Starbucks as an example of an organization that has successfully integrated strategy into its culture. Starbucks is an experience promoter, creating a “third place” besides home and workplace. The company’s welcoming and comfortable ambience makes it a preferable place for many customers.
However, stimulus alone is not enough, but it needs to be integrated into the company’s strategic positioning and capabilities. The experience at Starbucks is not solely drawn from the physical layout of the organization, but it is because the partners in the outlets understand the big goal and recognize how to achieve greater things together without needing to follow rules. Therefore, the positioning of Starbucks is drawn from the relationship-based, employees-first culture which encourages the employees to create strategic relationships among each other. The company believes that when employees feel that they are cared for, they will also care for the customers. Moreover, Starbucks appreciates inclusivity and diversity in its HR processes, thus making it possible to deliver a “third place” experience in its outlets.
Following the report of Starbucks Corporation, the recommendation would be in its TBL, particularly in the environmental perspective. The company would consider selling affordable to go cups and recyclable sleeves. Moreover, the employees should be encouraged to come up with corporate social responsibility initiatives to ensure sustainable competitive advantage against its rivals.
In conclusion, Starbucks is one of the leading brands in the coffee shops industry around the world. The company was founded by 1971 in Seattle Pike Place Market in the United States but now has stores all over the world. The company is known for its TBL initiatives including economic, social, and environmental operations that keep it at an edge against its competitors. Significantly, Starbucks is known for its inclination to environmental stewardship and strategic alliances ensure that it stays focused on its objective. Analyzing the strategic positioning of Starbucks reveals that the company is in a position to implement the triple bottom line. Moreover, the internal stimulus that has enabled the company to adopt this positioning is relationship-based, an employee-first culture that allows employees to be part of the bigger picture and making independent decisions without necessarily following coded standards.
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