Hr Management Skills Starbucks Employees example essay topic

1) Starbucks used mostly a differentiation strategy, however it had also used a cost leadership strategy. Its differentiation strategy was exemplified by their stores providing an experience, offering interesting coffee-related drinks in a theatrical kind of atmosphere, their unique Coffee blending and roasting process which enabled them to create an extensive product variety, their employees received great deal of training to become very knowledgeable about coffee in order to provide an exceptional service to increasingly coffee-educated consumers, and their ability to find the perfect location for their stores enabled them to maximize market share in a given area of a city and build their regional reputation which then increased their image to a national level of high prestige and status. For all these reasons, consumers were willing to pay a premium. Their cost leadership strategy was exemplified by their supply chain operations where they received the best transportation rates, and were able to achieve economies of scale by eliminating redundancy and maximize efficiency.

Starbucks was also a cost leader due to its good relationship with coffee exporters who were "very anxious to become Starbucks suppliers", a fact that enabled the company to get better prices and reduce bean-sourcing costs. The activities that created superior value for Starbuck's retail coffee-house business were: Procurement - purchased more high quality coffee than anyone else in the world. Technological Development - A lot of research was put into the roasting and blending process to create unique tastes. Human Resource Management - extensive training and educating of employees (baristas) and turning them into part of the organizational culture. Outbound Logistics - finding good Real estate to maximize market share in certain area and provide the coffee in key places to consumers.

2) Starbucks' core competencies are: R&D - Invested a lot in research of it roasting and blending of its coffees to ensure it was getting as much as possible form the coffee beans. This allowed them to create signature roasting curves which were done by very few competitors, and ensured that even if a roaster were to defect to another competitor, he / she would not be able to duplicate these signature curves. Their roasting and blending technology enabled them to create unique coffee tastes which created value to consumers. Organization, management, and design skills of Supply Chain Operations (SCO) - Starbucks has organized an SCO that had a complex bakery distribution model, a forecasting model for 'who will need coffee when', strong inventory turns for the specialty coffee industry, and a fully integrated manufacturing and distribution process. It had developed these skill and benefits because it benchmarked against its competitors, hired experts, and believed strongly in the concept if integrated supply. These skills gave start bucks a sustainable competitive advantage since they were costly to imitate by competitors, and hence were possessed by only a few of them.

In addition, they illustrated the fact that Starbucks had the correct implementation mechanism, and held the right structure and controls of its supply chain. HR management skills - Starbucks employees received a great deal of training and education about the different coffees and processes. This enable them to relay forward this information to the increasing coffee-knowledgeable consumers, who perceived this as an added value to the product they purchased. These skill were unique to the company and were very costly to imitate. They also represented the company's correct control and structure mechanisms of its HR organizational culture policies.

Real Estate Capabilities - Starbucks designed a team that could fit a store location in many retail spaces. It also used the concept of store clustering. Both of these skills were rare and costly to duplicate by their competitors. It allowed them to maximize market share, build their brand reputation, which added value to consumers who were willing to pay a premium for Starbucks products.

It also exemplified the correct implementation mechanism of having a specific team in the organization to exploit real estate opportunities in order to gain an advantage. Starbucks had initiated many new ventures such as Dryers Ice Cream, bottled Frappuccino product with Pepsi, and its penetration into the grocery channel. It did leverage its core competencies in the these ventures since Frappuccinos were sold in Starbucks stores and hence held the company's real-estate, HR, SCO, and R&D skills It also leveraged its core competencies in the other 2 ventures, since they were sold in grocery chains, which enable them use their SCO and R&D skills. These skills along with the Starbucks brand name helped these ventures establish some strengths relative to its competition. The new venture had enough similarity to Starbucks' core business, in the skills needed to benefit from it.

These skills along with the company's brand was also difficult to imitate. 3) I would recommend Starbucks to diversify it retail stores internationally, into Latin America, where it could leverage it's R&D, HR management, and Real Estate competencies. I would also recommend them to venture into the cookies market were they can use their R&D skill in creating unique tastes in cookies which would blend greatly with their coffees. I would suggest to them to sell these cookies only in Starbucks stores initially so they can leverage their HR managements, Real Estate and SCO skills, and then as these cookies start to gain momentum, they should be expand into selling them in grocery chains.