case study of starbucks corporation

Starbucks Case Study - How Starbucks Conquered The Coffee Industry?

Devashish Shrivastava

Starbucks Corporation is an American coffee chain that was established in 1971 in Seattle, Washington. By mid-2019, the organization had a presence in over 30,000 areas around the world. Starbucks has been depicted as the fundamental delegate of "second wave espresso," a reflectively-named development that advanced high-quality espresso and specially simmered coffee. Starbucks now uses robotized coffee machines for proficiency and well-being.

Starbucks serves hot and cold beverages, entire bean espresso, micro-ground moment espresso known as VIA, coffee, caffe latte, full-and free leaf teas such as Teavana tea products, Evolution Fresh squeezes, Frappuccino refreshments, La Boulange baked goods, and bites (for example, chips and wafers); some offerings such as the Pumpkin Spice Latte are explicit to the territory of the store. Numerous Starbucks outlets sell pre-bundled nourishment items, sweltering and cold sandwiches, and drinkware such as cups and tumblers. Furthermore, there are Select "Starbucks Evenings" areas that offer brew, wine, and appetizers.

Starbucks first ended up productive in Seattle in the mid-1980s. Despite an underlying financial downturn with its venture into the Midwest and British Columbia in the late 1980s, the organization experienced rejuvenated success with its entrance into California in the mid-1990s. Starbucks opened an average of two new stores every day between 1987 and 2007. On December 1, 2016, Howard Schultz reported he would leave his position as the CEO and would be supplanted by Kevin Johnson. Johnson accepted the role of the CEO of Starbucks on April 3, 2017, and Howard Schultz resigned to end up as the 'Chairman Emeritus', effective from June 26, 2018. Kevin Johnson is currently serving as the CEO and President of Starbucks.

Starbucks - Company Highlights

Startup Story Of Starbucks Corporation History Of Starbucks Corporation Starbucks - Name and Logo Starbucks Expansion Journey Starbucks Corporation in India Business Strategy Of Starbucks In India Products Of Starbucks Corporation Business Growth Of Starbucks Corporation Over The Years Future Plans Of Starbucks Corporation

Startup Story Of Starbucks Corporation

If you are wondering how did Starbucks start? Then, the story of Starbucks started back in 1971, when the company was a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market.

Zev Siegel stated that at that time he knew the coffee industry inside and out, he was well-versed, especially with the gourmet end of the industry. Besides, he was also known as the most educated coffee guy in the country at that time. So, the three college friends - Zev Siegel, Jerry Baldwin and Gordon, started out with their coffee bean shop and roastery at Seattle’s famous Pike Place Market in 1971. Eventually, they found a mentor in Alfred Peet, who was the founder of Peet’s Coffee and the man responsible for bringing custom coffee roasting to the U.S. and started with the coffee business in full swing. Starbucks initially began by selling coffee beans that were roasted by Peet's, a gourmet coffee company in Berkeley, California, and later on, started roasting on their own.

History Of Starbucks Corporation

The first Starbucks store was initiated in 1971 in Washington by 3 individuals who met while they were studying at the University of San Francisco: English educator Hun Baldwin, history educator Zev Siegl, and author Gordon Bowker. The trio was encouraged to sell top-notch espresso beans and hardware after businessman Alfred Peet showed them his style of simmering beans.

During this time, the organization sold simmered, entire espresso beans. During its first year of activity, Starbucks bought green espresso beans from Peet's, and then started purchasing legitimately from producers.

Starbucks - Name and Logo

Bowker reviews that Terry Heckler, with whom Bowker claimed a publicizing office, thought words starting with "st" were ground-breaking. The organizers conceptualized a rundown of words starting with "st" and in the long run arrived on "Strabo," a mining town in the Cascade Range. The team then finalized on "Starbuck," the name of the young chief mate in the book "Moby-Dick".

Starbucks has given too many slogans/taglines already among which the most popular one is - " Brewed for those who love coffee".

Starbucks Expansion Journey

In 1984, the first proprietors of Starbucks, driven by Jerry Baldwin, acquired Peet's. During the 1980s, all-out offers of espresso in the US were falling. However, offers of strength espresso expanded, shaping 10% of the market in 1989; it stood at just 3% in terms of market share in 1983. By 1986, the organization worked six stores in Seattle and had just barely started to sell coffee.

In 1987, the first proprietors sold the Starbucks chain to the previous manager Howard Schultz, who rebranded his II Giornale espresso outlets as Starbucks and immediately extended. Starbucks then launched its outlets outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois. By 1989, 46 stores existed over the Northwest and Midwest, and every year Starbucks was simmering more than 2,000,000 pounds (907,185 kg) of coffee. At the hour of its first sale of stock (IPO) on the financial exchange in June 1992, Starbucks had 140 outlets with an income of $73.5 million, up from $1.3 million in 1987.

The organization's fairly estimated worth was $271 million at this point. The 12% segment of the organization that was sold raised around $25 million for the organization, which encouraged a multiplying of the number of stores throughout the following two years. By September 1992, Starbucks' offer cost had ascended by 70% to more than multiple times the income per portion of the past year. In July 2013, over 10% of in-store buys were made on the client's cell phones utilizing the Starbucks app.

The organization used the versatile social media stage when it propelled the "Tweet-a-Coffee" campaign in October 2013. People had the option to buy a $5 gift voucher for a companion by entering both "@tweetacoffee" and the companion's handle in a tweet. Research firm Keyhole observed the advancement of the event and a media article from December 2013 detailed that Starbucks had discovered that 27,000 individuals had taken an interest and $180,000 of buys were made to date.

As of 2018, Starbucks is positioned 132nd on the Fortune 500 rundown of the biggest United States organizations by revenue. In July 2019, Starbucks announced a "monetary second from last quarter total compensation of $1.37 billion, or $1.12 per share, up from $852.5 million, or 61 pennies for each offer, a year sooner." The organization's fairly estimated worth of $110.2 billion expanded by 41% in the middle of 2019. The income per share in quarter three was recorded at 78 pennies, considerably more than the estimate of 72 cents.

Starbucks Corporation in India

In January 2011, Starbucks Corporation and Tata Coffee reported designs to start opening Starbucks outlets in India. Despite a bogus beginning in 2007, in January 2012, Starbucks declared a 50:50 joint endeavour with Tata Global Beverages, called Tata Starbucks Ltd. , which would possess and work outlets marked "Starbucks, A Tata Alliance". Starbucks had endeavoured to enter the Indian market in 2007. However, it didn't provide any explanation behind its withdrawal of it.

It was on October 19, 2012 that Starbucks opened its first store, a 4,500 sq ft store in Elphinstone Building, Horniman Circle, Mumbai. Starbucks opened its first cooking and bundling plant in Coorg, Karnataka in 2013 to supply its Indian outlets. The company extended its reach to Delhi on 24 January 2013 by opening 2 outlets. Tata Global Beverages declared in 2013 that they would have 50 areas before the end of the year, with a venture of ₹4 billion ($58 million). The organization did open its 50th store in India on July 8, 2014.

The third city of India to get a Starbucks outlet was Pune, where the organization opened an outlet at Koregaon Park on 8 September 2013. Starbucks opened a 3,000-square-foot lead store at Koramangala, Bangalore on 22 November 2013, making it the fourth city to have an outlet. Starbucks opened the biggest espresso-forward store in the nation at Vittal Mallya Road, Bangalore on 18 March 2019. The store is estimated at 3,000 sq ft and is Starbucks' 140th outlet in India.

Tata Starbucks opened 25 stores between 2017 and 2018, which went up to 30 during 2018-19. On 21 February 2019, CEO Navin Gurnaney reported that Tata Starbucks would use only compostable and recyclable bundling materials over the entirety of its stores from June 2020.

Starbucks reported its entrance in Gujarat on 7 August 2019. The organization opened five stores in Surat and Ahmedabad the following day. Starbucks' leader store in the state is situated at Prahlad Nagar, Ahmedabad, and offers more vegan alternatives than other Indian outlets. CEO Navin Gurnaney expressed that the organization would open more than 30 stores in the 2019-20 financial year, of which 11 have already been opened.

Business Strategy Of Starbucks In India

Starbucks' strategies for business in India seemed rock-solid but the brand wasn't completely immune still. In any case, the world's biggest bistro chain is building its position cautiously via a progression of well-picked steps. Numerous worldwide brands have entered India since the 1990s, being pulled in by its developing and optimistic customer base. Yet, not all have succeeded.

Starbucks isn't the primary contestant in India's composed espresso showcase; so it doesn't have any first-participant advantage. Cafe Coffee Day (CCD) is the market head while Barista Lavazza was the main espresso chain to open for business. Both are valued by the white-collar class. Costa Coffee, Coffee Bean and Tea Leaf (CBTL), and Gloria Jean are valued by the rich group in India.

India is customarily a tea-drinking nation, so espresso chains have concentrated on giving a feel where individuals can unwind and invest energy with one another. This setup implies higher capital expenses. It is different from the US, where the vast majority have a liking for espresso. The Indian buyer base has likewise advanced in the recent decade. What can worldwide brands like Starbucks do to augment their odds of achievement in India? Here are a few thoughts:

Picking a Local Partner

Worldwide brands face the difficult choice of either going solo or tying up with a nearby accomplice. Starbucks' choice to team up with India's TATA Global Beverages demonstrates attention to utilizing different advantages. The TATA Group is one of India's morally determined brands, an observation passed on about Starbucks India too.

Given that India produces espresso beans in just a couple of spots, the other sourcing alternative was bringing in the beans. Be that as it may, this would have raised costs fundamentally.

Tata's espresso plant in Karnataka has been contracted to supply beans to Starbucks' universally, making common cooperative energies. It has contracted to take into account TATA's TAJ SATS, which supplies to TATA's top-notch lodging network – The TAJ. The TATAs are put into the retail part with store brands like Westside, Tanishq, Croma, Star Bazaar, and so forth. Starbucks can use them for information sharing on Indian land, territory points of interest, and handling land administrations. This would enable its very own development to outline. This strategy gives scope for store-in-store deals.

Consistency in Store Arrangements

This keeps up the one-of-a-kind selling purpose of customer experience and allows to pick up economies of scale on CAPEX. Starbucks plans to have a similar store group crosswise over India. However, the size can change depending on financial matters. This is how it works all around. Starbucks wants to provide an agreeable 'café' experience. Having a similar organization gives clients the solace of accepting the equivalent 'Starbucks' vibe any place they go throughout the world.

Keeping the store designs steady means it needs to pick and open new areas stringently, to such an extent that the area can yield a throughput by the venture. Its methodology in-store arrangement is different from CCD, which has picked various configurations to tap the potential interest in any region. CCD has opened a couple of premium outlets dependent on the area's customer profile . It has additionally gone for non-store organizations like takeaway booths and candy machines. Be that as it may, Starbucks may expect that such non-store configurations may weaken its image esteem.

Estimating the Pace of Expansion

India is the place where an inability to screen primary concerns has tossed numerous organizations out of the rigging. So, a top-line just approach doesn't work here. Since Starbucks needs to pick new areas stringently by its equivalent configuration approach, it has decided on a deliberate pace of extension. It is concentrating on the budgetary feasibility of every outlet, as opposed to going for an aggressive development plan which may have brought about rehashed calls for capital.

This operational process is different from its system in the USA and China where it has fabricated scale by opening stores in pretty much every area – being the main port-of-call for espresso by basically being all over the place. CCD's methodology behind adaptable store organizations was to guarantee there is a CCD bistro at a simple reach. It is intriguing to check its normal store gainfulness given its scale.

Guaranteeing Top-Authority Backing and Responsibility

Top initiative responsibility from the two sides of the organization, Tata and Starbucks, has been plentifully clear. Starbucks took as much time as is needed to enter the market (6 years), recognizing that India was a mind-boggling market and required cautious passage arranging. The two sides have spoken finally about their dedication and shared their future plans to give their business a new direction toward growth.

Altering Contributions to Suit Indian Market and Client Needs

Being adjusted to Indian culture, tastes, and inclinations conveyed at a suitable "esteem" guarantees customer importance, construct, and continued utilization. Starbucks mirrors this comprehension – as observed through a blend of western staples, a wide scope of intriguing Indian tidbits similar to confined refreshments on the idea. Since its experience ( and item as well, however to a lesser degree) is its image guarantee, its test lies in conveying an all-around steady, yet locally significant brand experience.

The stores, or the "third spot" as Starbucks calls them, have been altered likewise. The stores don't pursue the worldwide layout and appear to have been planned with consideration, with neighbourhood contacts consolidated. Stores in various urban communities have been structured unexpectedly, mirroring the neighbourhood culture – for e.g., New Delhi's store has ropes and chat on the dividers and henna designs on the floor, though the Pune store has a rich showcase of collectables and copper.

There appears to be sufficient utilization of shading – something missing in the US. The stores have been intended to convey a particular, premium café experience, predictable, and in a state of harmony with the one conveyed over the rest of the world.

Making Inventive and Restricted Plan of Action

Starbucks appears to have made a confined plan of action, planned for conveying a universally reliable item and involvement with locally-focused costs. The Tata group conveys a major sourcing advantage (attributable to its quality over the generation chain, developing, broiling, and exchanging espresso), yet it has just gone past that to develop and support associations with nearby espresso cultivators – putting resources into structure economical cultivating rehearses. All of Starbucks' espresso is sourced locally, a first-ever for the organization.

Scaling up using Arrangements and Organizations

The Tata organization is the genuine overthrow in the Starbucks passage story. Having Tata as an accomplice is gigantically profitable, not due to the validity and strength it offers, or because it coordinates the scale and stature of Starbucks as an organization.

It offers numerous advantages catalyzing pretty much every market section achievement variable - for example, The Tata group has involvement in the retail business , a solid reputation in advancing new pursuits, gives a sourcing advantage through Tata espresso, offers access to high traffic areas using its lodgings and other retail outlets, guarantee excellent nourishment and refreshment supply through its F&B business and so forth.

Furthermore, the potential for an effective organization is amazingly high given Starbucks' and Tata's mutual qualities – the two of them have a solid social inner voice and are resolved to "give back" to the general public and network.

Influencing India for Worldwide Items

Not long after it finished its first year, Starbucks reported that it was serving top-quality Indian Arabica espresso as "Indian coffee" in different markets. Another world-class office for cooking and bundling has just been initiated in Coorg, Karnataka; the results of which are to be analyzed in India and abroad.

Overseeing Discernment and Guidelines

This viewpoint is tied in with structure, a solid positive observation and a picture for the business and brand crosswise over key outer partners and crowds – incorporating the administration, corporate accomplices, networks inside the eco-framework, and customers on the loose. Given what Starbucks has figured out how to accomplish in a year and a half since dispatch, it appears to be genuinely evident that its thought combined with the Tata advantage (critical reach and impact) has helped in developing solid connections and a positive picture with key outside partners and voting demographics.

Engage Nearby Association

Starbucks is by all accounts constructing a nation-explicit activity with nearby individuals in charge and overall unmistakable customer interface focuses, giving them the necessary position to coordinate and work. There is overwhelming interest in enlisting the perfect individuals and giving the essential preparation – to install and instil the organization's culture and administration models.

Along these lines, how has Starbucks fared against the McKinsey spread out variables for long-haul India achievement? Its accomplishments against the scorecard look noteworthy. With thorough vigorous passage arranging and brilliant and quick execution, the multi-month-old endeavour appears to have impressive force, making purchaser and network-driven ventures and focused on sustaining its centre business and brand. It appears to be very much set to "win" in India.

Whether Starbucks will collect a huge piece of the overall industry and accomplish its objective of India being among its best 5 markets over the long haul is not yet clear. It's still early days, yet for the organization, this appears to be an incredible beginning and a great globalization model for multinationals looking for an India section.

Products Of Starbucks Corporation

Aside from the typical items offered globally, Starbucks in India has some Indian-style item contributions, for example, Tandoori Paneer Roll, Chocolate Rossomalai Mousse, Malai Chom Tiramisu, Elaichi Mewa Croissant, Chicken Kathi Roll, and Murg Tikka Panini to suit Indian customers. All coffees sold in Indian outlets are produced using Indian broiled espressos by Tata Coffee. Starbucks additionally sells Himalayan packaged mineral water. Free Wi-Fi is accessible at all Starbucks stores.

In January 2017, Tata Starbucks presented Starbucks' tea image "Teavana". Teavana offers 18 unique assortments of tea in India. One of the assortments called the India Spice Majesty Blend was explicitly created for the Indian market and is just accessible in India. India Spice Majesty Blend is a mix of full leaf Assam dark tea injected with entire cinnamon, cardamom, cloves, pepper, star anise, and ginger. On 15 June 2015, Tata Starbucks reported that it was suspending the utilization of fixings that had not been affirmed by the Food Safety and Standards Authority of India (FSSAI).

The organization didn't indicate what the fixings were or which items they were utilized in. The organization additionally expressed that it was applying for FSSAI endorsement for these ingredients.

As per the Latte Index positioning of the expense of a tall hot latte at Starbucks in 44 nations, India was the fifth most costly nation to buy the drink dependent on January 2016 costs. The record distributed by US-based buyer research firm ValuePenguin found that a tall hot latte cost $7.99 in India, far higher than the $2.75 it costs in the least expensive nation, the United States, yet much lower than the $12.32 in the most costly nation, Russia .

Tata Starbucks propelled the Starbucks Delivers program in mid-2019. The administration offers home conveyance from Starbucks outlets through an organization with Swiggy. The administration was first propelled in Mumbai, with designs to turn it out to other cities.

In its menu, the Tata Starbucks company has launched ice-creams as their new products. The frozen delights are available even in flavours like java chip and caramel macchiato among others and will come in takeaway tubs and single scoops. The ice-creams are now available in 50-60% of the Starbucks stores.

Business Growth Of Starbucks Corporation Over The Years

Tata Starbucks, a 50:50 joint endeavour between Tata Global Beverages and Starbucks Coffee of the US, has announced a 30%  top-line development in financial 2018-19, driven by new store openings and improved execution. Tata Starbucks, which is hoping to make back the initial investment in the current money, has opened 146 stores to date. Tata Starbucks announced "twofold digit top-line development - 30% for the entire year, driven by new stores and improved store execution," Tata Global Beverages Ltd (TGBL) said in a financial specialists' introduction. Tata Starbuck's income for 2018-19 is required to be approximately INR 450 crores.

TGBL said Tata Starbucks opened 30 outlets in the past financial year, out of which 15 new stores were opened during the last quarter of the money-related year. The organization claimed detailed benefits at the store level; all urban areas were likewise productive, and additionally saw an ascend in nourishment share in general deals.

The Starbucks company has added around 40 stores in FY21 but the company had recorded a 33% Y-O-Y  fall in its revenues during the same fiscal. According to the Sushant Dash, CEO of Tata Starbucks, the recovery that the company has seen after the second wave of COVID-19 was better than what it saw after the first wave of the deadly pandemic. The quarterly growth after Q2 FY22 was 120% more than what it saw during the same period in the previous fiscal. The company has hugely focused on home deliveries ever since the pandemic broke out. It has already addressed concerns associated with the spillage and other challenges pertaining to home delivery, which contributed to over 18% of the total sales that the company witnessed this fiscal, as per the reports in November 2021. Furthermore, the company has also added ice-creams to their menu in flavours like java chip and caramel macchiato. The Sanjeev Kapoor menu is another thing that has been freshly launched by Tata Starbucks. Besides, the company also launched a one-litre freshly brewed beverage and at-home coffee.  

Future Plans Of Starbucks Corporation

Tata Starbucks Pvt. Ltd. is looking to forcefully grow its impression in the Indian market with its eyes on the quickly spreading "espresso culture" among the twenty to thirty-year-olds and upwardly versatile customers. Tata Starbucks, a JV between US-based Starbucks Coffee Company and Tata Global Beverages Ltd, hopes to set up altogether more number stores this monetary than it did previously.

Starbucks is hopeful about solid business development in India throughout the following year as it means to leave red in monetary numbers after 2020. "Our proceeded with development in topline and reasonable methodology towards extension will enable us to accomplish make back the initial investment by March 2020," Navin Gurnaney, CEO, Tata Starbucks disclosed to Business Line in the wake of declaring five new stores in Gujarat - three in Ahmedabad and two in Surat. Gurney likewise included, "First time in quite a while, we are opening five stores in any state in one go.

Gujarat is a significant market for us. In the wake of opening these five stores on Thursday, the all outnumber of hides away goes up to 157 in India." Starbucks entered India with its first store opened at Mumbai in 2012. Of the 157, the organization has opened all out 11 stores so far in this financial, as against complete 30 stores opened during 2018-19. It takes into account 270,000 clients each week in India. The organization had announced a turnover of INR 442 crores for the monetary 2018-19.

"Espresso business in India is developing significantly. The espresso culture is being initiated by recent college grads, upwardly versatile, and individuals who travel and get brand. Two years back, we set up 25 stores (in a year). During the last financial 2018-19, we included 30 stores.

This year we will beat that number considerably and by end of March 2020, we will have included a lot a greater number of stores than we included in the past," Gurney said. With per store venture prerequisites being evaluated at INR 1.7-2 crores, the complete CAPEX plan by the organization works out in overabundance of INR 50 crores during current monetary on the off chance that it opens more number of stores than a year ago. Be that as it may, Gurnaney ceased from giving venture figures for 2019-20.

The organization is likewise open to different open doors for development including inorganic development through acquisitions. Be that as it may, when tested about any probability of a venture plan in the espresso chain Cafe Coffe Day (CCD), Gurnaney denied estimating any discussions for securing. "We are very hopeful about India. We will be attentively forceful (to extend). (At present) we are not in discussions with anyone for obtaining.

In any case, we are hoping to develop constantly," he included. With an end goal to upgrade the client experience, Starbucks is presenting new nourishment things, taking into account all client needs including breakfast and lunch. The income share from nourishment things is right now around 25%, even as it keeps on developing with new things to meet the client's needs.

Who founded Starbucks?

Starbucks was started by Hun Baldwin, Zev Siegl, and Gordon Bowker in 1971.

Where was the first Starbucks started?

Starbucks was started in Pike Place Market, Seattle, Washington, United States.

When was Starbucks started in India?

Starbucks was launched in India in 2012.

What is the revenue of Starbucks?

Starbucks revenue was recorded $29.02 billion in 2021.

How many Starbucks stores are there worldwide?

There are 33,830 Starbucks stores in the world as of 2021.

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Case Study Of Starbucks: How Starbucks Became The Coffee King?

Supti Nandi

February 21, 2024

Starbucks, a brand that became synonymous with coffee has created a sensation in the world with its coffeehouse culture. Have you wondered how? Well, to answer this question we will delve into the case study of Starbucks.

Stay tuned!

(A) Starbucks: A Brief Overview

Let’s buckle up for a Starbucks journey! Founded back in 1971, this coffee giant now reigns supreme as the world’s largest coffeehouse chain, with its home base in the city of Seattle, Washington.

Before diving deeper into the Starbucks case study, let’s have a look at the company’s profile-

Fast forward to November 2022, and you’ve got Starbucks waving its coffee wand in a staggering 35,711 stores across 80 countries. And when you zoom in on the U.S., you’re looking at a whopping 15,873 Starbucks hotspots. 

Here’s the scoop – over 8,900 are Starbucks-run, and the rest are running under licensed partnerships.

Now, let’s talk coffee vibes. Starbucks is the unsung hero of the second wave of coffee culture, dishing out an array of coffee delights. Think hot espresso, chill Frappuccinos, and a lineup of pastries and snacks that’s strong enough to trigger your taste buds.

Oh, and did you know some Starbucks treats are exclusive to certain locations? How? You may wonder. Well, here’s a bonus – most Starbucks joints worldwide offer free Wi-Fi. Coffee and connectivity – a match made in heaven.

So there you have it – the Starbucks saga! 

(B) Business Overview of Starbucks Case Study

Understanding the business perspective is one of the essential parts of the Starbucks case study. Reason? You will get to know how Starbucks is performing in the market in terms of financials and business.

Go through the table given below-

In today’s date, the coffee giant is flexing a market capitalization of a whopping $105.82 billion – that’s some serious coffee beans.

Now, rewind to 2023, and Starbucks made it rain with a revenue of $35.976 billion. But what about the nitty-gritty? Operating income in 2022 hit $4.62 billion, while net income settled at $3.28 billion. These aren’t just numbers; they’re the financial pillars of Starbucks.

That’s not all!

Hold onto your coffee cups; we’re diving into assets and equity. Total assets in 2022 clocked in at $27.98 billion – that’s like a treasure chest of coffee goodness. But here’s a twist – total equity dipped to -$8.70 billion. It’s like a plot twist in a coffee-fueled drama.

Now, let’s talk about expenses and profits. In 2023, expenses tallied up to $30.584 billion, but here’s the kicker – profits soared to $25.108 billion. 

That’s like balancing a delicate espresso shot with a mountain of whipped cream.

In a nutshell, Starbucks isn’t just brewing coffee; it’s a financial powerhouse, stirring up a caffeinated storm in the business world.

(C) History of Starbucks: Timeline & Key Events

Coming to the third part of the Starbucks case study, let’s delve into the history of Starbucks-

Founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at Seattle’s Pike Place Market, Starbucks underwent pivotal changes in ownership and leadership. In the early 1980s, Howard Schultz acquired the company and transformed it into a coffee shop, introducing espresso-based drinks after being inspired during a business trip to Milan, Italy.

Schultz served as CEO from 1986 to 2000, orchestrating an expansive franchise expansion across the West Coast.

Orin Smith succeeded Schultz, focusing on fair trade coffee and boosting sales to US$5 billion. Jim Donald took the helm from 2005 to 2008, overseeing substantial earnings expansion. Schultz returned during the 2007–08 financial crisis, steering the company towards growth, expanded offerings, and a commitment to corporate social responsibility. Kevin Johnson assumed the CEO role in 2017.

In March 2022, Starbucks announced Schultz’s return as interim CEO in April 2022, with Laxman Narasimhan appointed to succeed him in April 2023. Narasimhan assumed the position earlier, in March 2023.

Beyond beverages and food, Starbucks stores offer official merchandise and select locations to provide “Starbucks Evenings” with beer, wine, and appetizers. The company’s products, including coffee, ice cream, and bottled drinks, are available in grocery stores globally. The Starbucks Reserve program, initiated in 2010 for single-origin coffees and high-end shops, has evolved. Starbucks operates six roasteries with tasting rooms and 43 coffee bars. 

The company faced controversies but maintains substantial brand loyalty, market share, and value. As of 2022, Starbucks ranks 120th on the Fortune 500 and 303rd on the Forbes Global 2000.

(D) Significance of Logo in Starbucks Case Study

Let’s delve into the details of the Starbucks logo evolution. In its inception in 1971, the original Starbucks logo featured a complex design comprising a two-tailed mermaid or siren, encompassed by a wordmark. This design was a visual nod to the brand’s early identity and origins. The mermaid, with its twin tails, was a dual representation of the sea and Seattle, the birthplace of Starbucks.

As the brand progressed, the logo underwent a significant transformation. The evolution saw a shift towards simplicity, as the wordmark surrounding the mermaid was phased out. This marked the beginning of the modern Starbucks logo we recognize today. 

The current emblem showcases a simplified and stylized green siren enclosed within a matching green ring, emphasizing a cleaner and more focused visual identity.

Beyond aesthetics, the modern logo carries symbolic weight. The green mermaid within the circle has become an iconic representation of Starbucks’ commitment to delivering high-quality coffee experiences. 

Additionally, it reflects the brand’s emphasis on creating a sense of community that extends beyond geographical boundaries.

In essence, the evolution of the Starbucks logo is a journey from a detailed and intricate design to a streamlined and symbolic representation. It mirrors the brand’s growth, emphasizing its roots, dedication to quality, and the broader cultural impact it seeks to make through coffee and community.

(E) Market Penetration Strategy: How Starbucks became the coffee king?

In this section, we will look into the key plans and actions that helped Starbucks gain a strong foothold in the beverage and cafe industry.

Starbucks continues to blend innovation and growth, navigating the ever-changing landscape of the coffee industry.

(F) Starbucks Entry in India: Core of Starbucks Case Study

In 2012, Starbucks initiated its venture into India through a significant 50:50 joint venture with Tata Consumer Products Ltd. The inaugural flagship store, which opened its doors on October 19th, 2012, found its home in the historic Elphinstone Building in Mumbai. 

The architectural design of this store ingeniously merged Starbucks’ global coffee legacy with the vibrant local culture, creating a welcoming space for community and connection. Over time, this Mumbai location evolved into India’s first Starbucks Reserve® Store, setting the stage for an elevated coffee experience.

(F.1) The Starbucks Reserve® Store Unveiled: A Coffee Lover’s Haven

The introduction of the Starbucks Reserve® Store marked a milestone in the coffee giant’s presence in India. Spanning an impressive 5,200 square feet, this store greeted customers with the intoxicating aroma of coffee. 

The entrance featured a stunning monolithic terrazzo Reserve bar, a masterpiece crafted by local artisans. Trained black apron coffee masters curated an exceptional coffee experience, showcasing rare and exquisite brews through various brewing methods. 

This Reserve Store was not just a coffee shop; it was a canvas for creating unique moments of connection through the artistry of coffee.

(F.2) Expanding Horizons: Tata Starbucks’ Nationwide Presence

Tata Starbucks established a substantial footprint, operating 350+ stores spread across 36 cities in India. In a significant achievement in 2022, Starbucks executed its largest single-year expansion in India, reaching 14 new cities. The brand’s influence spanned major cities such as Mumbai, Delhi NCR, Hyderabad, Chennai, Bengaluru, Pune, and more.

(F.3) Coffee Blends Celebrating Indian Flavors and Heritage

Starbucks paid homage to India’s rich coffee heritage by introducing special blends. The India Estates Blend, sourced from estates in Coorg and Chikmagalur, the birthplace of coffee in India, made its debut in 2013. Additionally, the Diwali Blend, introduced in 2020, served as a tribute to India’s vibrant culture and longstanding coffee traditions.

(F.4) The Tata Alliance: A Successful Partnership

Starbucks in India proudly bore the branding “Starbucks Coffee – A Tata Alliance,” underscoring the synergy between Starbucks and Tata Global Beverages.

Starbucks’ journey in India was not merely about coffee; it was about brewing connections, transcending cultural boundaries, and crafting unforgettable coffee experiences that resonated with the diverse tapestry of India.

(G) Business and Marketing Strategies of Starbucks in India

Starbucks, despite entering India’s coffee scene with strong strategies, faced challenges in a market dominated by competitors like Cafe Coffee Day and Barista Lavazza. Unlike the U.S., where coffee is a staple, India is traditionally a tea-drinking country. 

Starbucks aimed to create a space for relaxation, blending its global coffee legacy with local culture.

Let’s look at the business and marketing strategies of Starbucks in India-

In short, Starbucks’ journey in India reflects a careful blend of global strategies and localized approaches, aiming to create a unique and sustainable presence in a market with diverse preferences and cultural nuances. The success indicators appear promising, showcasing Starbucks’ commitment to long-term growth and meaningful community integration.

Note: Do you know Starbucks collaborated with Apple during the horizontal marketing in the US? We have covered it thoroughly here- Horizontal Marketing System . You can check it out for detailed information.

(H) Wrapping Up the Case Study of Starbucks

The Case Study of Starbucks unveils a fascinating journey that transformed Starbucks into the reigning coffee king. What started as a local coffee bean store in Seattle’s Pike Place Market in 1971 boomed into a global coffee empire. The strategic moves, like Howard Schultz’s visionary shift to espresso-based drinks, had set the stage for Starbucks’ aggressive expansion.

Throughout its evolution, Starbucks faced challenges, leadership changes, and controversies, but resilience and strategic pivots marked its trajectory. The decision to focus on corporate social responsibility under Schultz’s leadership during the financial crisis showcased Starbucks’ adaptability.

The engagement with local cultures, from the iconic two-tailed mermaid symbol to store designs reflecting regional aesthetics, contributed to Starbucks’ success. Key partnerships, like the one with TATA in India, demonstrated a keen understanding of local markets.

Starbucks’ commitment to quality, community, and sustainability resonated with consumers globally. From unique store experiences to tailored product launches, Starbucks consistently adapted its offerings to cater to diverse tastes.

In essence, the Case Study of Starbucks illuminates a narrative of coffee, community, and corporate strategy, culminating in Starbucks’ reign as the coffee king. 

The journey is a testament to the power of adaptability, brand loyalty, and a steaming cup of coffee that transcends borders, making Starbucks an integral part of daily rituals worldwide!

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Strategic Analysis of Starbucks Corporation

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Case 9 Starbucks Corporation, March 2018 *

Starbucks Corporation's annual shareholders' meeting on March 22, 2017 marked Starbucks' 25th anniversary as a public company. It also marked a changing of the guard: Howard Schultz, Starbucks founder, CEO, and chairman announced his retirement as CEO and handed over the key of the first Starbucks store to his successor, Starbucks' president and chief operating officer, Kevin Johnson. Johnson was a 16‐year Microsoft veteran who had been CEO of Juniper Networks before joining Starbucks.

Stepping in Schulz's “venti‐sized” shoes presented a massive challenge to Johnson and for his first year as CEO, he kept a low profile. When Starbucks hit turbulence—as in April when two African‐American men were arrested at a Starbucks in Philadelphia—it was Schultz who was the public face of the company. However, in June 2018, Schulz also announced his retirement as executive chairman of Starbucks—fueling speculation that he was planning to run for president of the United States of America as a Democratic candidate.

Johnson was now the official and de facto leader of Starbucks Corporation. As he acknowledged: “The most difficult transition any company will ever go through is from founder‐led to founder‐inspired.” 1 Moreover, Starbucks was facing significant strategic and operational challenges. Some of Starbucks' diversification—into tea shops for example—had been unsuccessful, and in the United States, same‐store sales growth had declined, causing the ...

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Applied Social Marketing and Quality of Life pp 363–379 Cite as

Corporate Activism and Quality of Life: Starbucks Corporation Case Study

• Joaquin Sanchez Herrera 9 ,
• Teresa Pintado Blanco 9 &
• Carlota Lopez Aza 9  
• First Online: 01 January 2022

647 Accesses

Part of the book series: Applying Quality of Life Research ((BEPR))

This case study explores Starbucks’ social marketing campaign through a corporate activism strategy. Our aim is to gain a perspective of this problem based on the quality of life theory. This led to our study of Starbucks’ social activism campaign for the hiring of 10,000 Syrian refugees in the US between 2017 and 2022 with three basic objectives in mind: (i) help one of the most vulnerable groups in the context of wars and terrorism, giving them a second chance to rebuild their lives and that of their families, (ii) materialise their social commitment in those areas where the company operates, and (iii), from a social marketing perspective, contribute to the change of attitude of citizens towards this group in particular.

Starbucks’ economic indicators, as well as the social, economic and demographic conditions in the United States with respect to refugees, are shown for this case study and analysis. So far, the campaign has managed to recruit 2100 refugees (data updated to December 2019), from 12 different countries, in its establishments in the United States, Canada and Europe.

Finally, readers are invited to reflect on whether the arrival of Syrian refugees in the US can have a positive impact on the quality of life for the nation and for Starbucks workers.

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Joaquin Sanchez Herrera, Teresa Pintado Blanco & Carlota Lopez Aza

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Teaching Notes

This case study was written for a 60-90 minute discussion. In most cases it might be more helpful to divide the students into small groups so that they can discuss among themselves and come up with alternative solutions. Students should read the case study before class without answering the questions raised. If the teacher does not have enough time, the questions can be assigned well in advance, making it clear that the analysis needs to be completed before coming to class, possibly requiring parts of it to be submitted individually. Later in class, and regardless of the method chosen, the session will develop in the same way. Different aspects of this case study can be highlighted depending on the type and characteristics of the course.

Suggested Calendar

First part. 30 minutes: introduction

In addition to clarifying the elements of the case study analysis and the central idea of social marketing strategies, reference is also made to other concepts. The teacher can invite the students to comment on their vision of immigration, in particular of refugees. Then the teacher can explain the different types of activism and ask the students for real examples.

Second part. 45 minutes: analysis

The students are organised into groups and must answer the questions (reread the case study if necessary). The teacher can go through and solve the discussion questions in order, or choose those that best suit the course and their learning objectives. Discussion questions help students think about the key issues raised by the case study. Discussion questions help students think about the key issues raised by the case study. In relation to the questions posed, the answers should be similar to the following:

Do you think the perception, attitude or behaviour of Starbucks customers and employees has changed or can change with regard to Syrian refugees?

Students’ reflections should refer to what social marketing can do to change the behaviour of North American society, considering the influence of a company like Starbucks. Students are expected to comment and discuss these and other aspects: (i) Educating consumers or employees about the positive influence of immigration; (ii) Developing a social movement for the integration of immigrants into the labour market; and/or (iii) Convincing the government to change the immigration policy.

Look for other social marketing campaigns and compare them to the Starbucks campaign (message, target audience, success, influence on quality of life).

Students must be clear about the topics that social marketing addresses to find other campaigns (smoking, obesity, diseases, social problems, etc.).

Do you see Starbucks corporate activism as opportunist? Justify your answer.

Students must identify the differences between an opportunistic strategy and the development of a long-term activist strategy, which is related to stakeholder values. To do this, they must start by defining corporate activism (sect. 1.1) and applying the CADM matrix (sect. 2.4) to justify Starbucks’ activist strategy as non-opportunistic.

Do you think that the Starbucks campaign improves the quality of life of employees, customers and investors? How?

Arguments in favour must be based on increased productivity, satisfaction, loyalty, efficiency, etc. using data in sect. 2.3 of this chapter. The arguments against must gravitate around the possibilities of a boycott suffered by the company, the reduction of its reputation by stakeholders contrary to the position of Starbucks, or the CEO’s own declaration as an action of personality without using the concept of political and/or social activism (sect. 2.2).

Third part. 15 minutes: close

The summary discussion should focus on what Starbucks has done so far and what the organisation faces in the future, as well as key quality of life indicators. The teacher could ask other questions for a final discussion: What specific steps should Starbucks take next? How can Starbucks inspire other companies to innovate in activism? Do you think Starbucks is likely to try and launch new social marketing campaigns?

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Sanchez Herrera, J., Pintado Blanco, T., Lopez Aza, C. (2021). Corporate Activism and Quality of Life: Starbucks Corporation Case Study. In: Galan-Ladero, M.M., Rivera, R.G. (eds) Applied Social Marketing and Quality of Life. Applying Quality of Life Research. Springer, Cham. https://doi.org/10.1007/978-3-030-83286-5_22

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Starbucks Corporation: Fighting Racial Bias

By: Arpita Agnihotri, Saurabh Bhattacharya

In April 2018, two black customers were arrested at a Starbucks Corporation (Starbucks) outlet in Philadelphia, Pennsylvania, after one of the two men asked to use the restroom while the pair were…

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• Publication Date: Jan 13, 2020
• Discipline: General Management
• Product #: W20005-PDF-ENG

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In April 2018, two black customers were arrested at a Starbucks Corporation (Starbucks) outlet in Philadelphia, Pennsylvania, after one of the two men asked to use the restroom while the pair were waiting to meet someone. After a video of the arrest went viral on social media, Kevin Johnson, the chief executive officer of Starbucks, immediately apologized to the men and, further, announced that the company would hold racial bias training across all Starbucks stores in the United States. Johnson was criticized for the presumption that a half-day training session could possibly resolve racial bias issues. Employees also expressed their dissatisfaction with the training program. Johnson also announced an open-toilets policy, which was also criticized, raising several questions: Had Johnson managed the crisis appropriately? How could he make such training effective? Should Johnson change his open-toilets policy? Should he reconsider his decision to conduct such training at the cost of future revenues?

Arpita Agnihotri is affiliated with Pennsylvania State University - Harrisburg. Saurabh Bhattacharya is affiliated with Newcastle University.

Learning Objectives

This case is intended for both undergraduate- and graduate-level courses on business ethics and corporate governance. After working through the case and assignment questions, students will be able to do the following: Explain how to respond to a racial bias crisis situation. Analyze the effectiveness of racial bias training. Describe different types of implicit bias that may occur in addition to racial bias. Critically analyze whether customer-pleasing policies such as open-toilets policies are good for an organization's reputation. Describe different routes or strategies organizations can use to enhance diversity.

Jan 13, 2020

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Accommodations

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Home » Management Case Studies » Case Study: Corporate Social Responsibility of Starbucks

Case Study: Corporate Social Responsibility of Starbucks

Starbucks is the world’s largest and most popular coffee company. Since the beginning, this premier cafe aimed to deliver the world’s finest fresh-roasted coffee. Today the company dominates the industry and has created a brand that is tantamount with loyalty, integrity and proven longevity. Starbucks is not just a name, but a culture .

It is obvious that Starbucks and their CEO Howard Shultz are aware of the importance of corporate social responsibility . Every company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has done a great job showing their employees how important they are to the company. Along with committing to every employee, they have gone to great lengths to improve the environment for everyone. Ethical and unethical behavior is always a hot topic for the media, and Starbucks has to be careful with the decisions they make and how they affect their public persona.

The corporate social responsibility of the Starbucks Corporation address the following issues: Starbucks commitment to the environment, Starbucks commitment to the employees, Starbucks commitment to consumers, discussions of ethical and unethical business behavior, and Starbucks commitment and response to shareholders.

Commitment to the Environment

The first way Starbucks has shown corporate social responsibility is through their commitment to the environment. In order to improve the environment, with a little push from the NGO, Starbucks first main goal was to provide more Fair Trade Coffee. What this means is that Starbucks will aim to only buy 100 percent responsibly grown and traded coffee. Not only does responsibly grown coffee help the environment, it benefits the farmers as well. Responsibly grown coffee means preserving energy and water at the farms. In turn, this costs more for the company overall, but the environmental improvements are worth it. Starbucks and the environment benefits from this decision because it helps continue to portray a clean image.

Another way to improve the environment directly through their stores is by “going green”. Their first attempt to produce a green store was in Manhattan. Starbucks made that decision to renovate a 15 year old store. This renovation included replacing old equipment with more energy efficient ones. To educate the community, they placed plaques throughout the store explaining their new green elements and how they work. This new Manhattan store now conserves energy, water, materials, and uses recycled/recyclable products. Twelve stores total plan to be renovated and Starbucks has promised to make each new store LEED, meaning a Leader in Energy and Environmental Design. LEED improves performance regarding energy savings, water efficiency, and emission reduction. Many people don’t look into environmentally friendly appliances because the upfront cost is always more. According to Starbucks, going green over time outweighs the upfront cost by a long shot. Hopefully, these new design elements will help the environment and get Starbucks ahead of their market.

Commitment to Consumers

The second way Starbucks has shown corporate social responsibility is through their commitment to consumers. The best way to get the customers what they want is to understand their demographic groups. By doing research on Starbucks consumer demographics, they realized that people with disabilities are very important. The company is trying to turn stores into a more adequate environment for customers with disabilities. A few changes include: lowering counter height to improve easy of ordering for people in wheelchairs, adding at least one handicap accessible entrance, adding disability etiquette to employee handbooks, training employees to educate them on disabilities, and by joining the National Business Disability Council. By joining the National Business Disability Council, Starbucks gains access to resumes of people with disabilities.

Another way Starbucks has shown commitment to the consumers is by cutting costs and retaining loyal customers. For frequent, loyal customers, Starbucks decided to provide a loyalty card. Once a customer has obtained this card, they are given incentives and promotions for continuing to frequent their stores. Promotions include discounted drinks and free flavor shots to repeat visitors. Also, with the economy being at an all time low, Starbucks realized that cheaper prices were a necessity. By simplifying their business practices, they were able to provide lower prices for their customers. For example, they use only one recipe for banana bread, rather than eleven!

It doesn’t end there either! Starbucks recognized that health is part of social responsibility. To promote healthier living, they introduced “skinny” versions of most drinks, while keeping the delicious flavor. For example, the skinny vanilla latte has 90 calories compared to the original with 190 calories. Since Starbucks doesn’t just sell beverages now, they introduced low calorie snacks. Along with the snacks and beverages, nutrition facts were available for each item.

Also one big way to cut costs was outsourcing payroll and Human Resources administration . By creating a global platform for their administration system, Starbucks is able to provide more employees with benefits. Plus, they are able to spend more money on pleasing customers, rather than on a benefits system.

Commitment and Response to Shareholders

One way Starbucks has demonstrated their commitment and response to shareholder needs is by giving them large portions. By large portions, Starbucks is implying that they plan pay dividends equal to 35% or higher of net income to. For the shareholders, paying high dividends means certainty about the company’s financial well-being. Along with that, they plan to purchase 15 million more shares of stock, and hopefully this will attract investors who focus on stocks with good results.

Starbucks made their commitment to shareholders obvious by speaking directly to the media about it. In 2004, Starbucks won a great tax break, but unfortunately the media saw them as “money grubbing”. Their CEO, Howard Shultz, made the decision to get into politics and speak to Washington about expanding health care and the importance of this to the company. Not only does he want his shareholders to see his commitment, but he wants all of America to be able to reap this benefits.

In order to compete with McDonalds and keeping payout to their shareholders high, Starbucks needed a serious turnaround . They did decide to halt growth in North America but not in Japan. Shultz found that drinking coffee is becoming extremely popular for the Japanese. To show shareholders there is a silver lining, he announced they plan to open “thousands of stores” in Japan and Vietnamese markets.

Commitment to Employees

The first and biggest way Starbucks shows their commitment to employees is by just taking care of their workers. For example, they know how important health care, stock options, and compensation are to people in this economy. The Starbucks policy states that as long as you work 20 hours a week you get benefits and stock options. These benefits include health insurance and contributions to employee’s 401k plan. Starbucks doesn’t exclude part time workers, because they feel they are just as valuable as full time workers. Since Starbucks doesn’t have typical business hours like an office job, the part time workers help working the odd shifts.

Another way Starbucks shows their commitment to employees is by treating them like individuals, not just number 500 out of 26,000 employees. Howard Shultz, CEO, always tries to keep humanity and compassion in mind. When he first started at Starbucks, he remembered how much he liked it that people cared about him, so he decided to continue this consideration for employees. Shultz feels that a first impression is very important. On an employee’s first day, he lets each new employee know how happy he is to have them as part of their business, whether it is in person or through a video. His theory is that making a good first impression on a new hire is similar to teaching a child good values. Through their growth, he feels each employee will keep in mind that the company does care about them. Shultz wants people to know what he and the company stand for, and what they are trying to accomplish.

Ethical/Unethical Business Behavior

The last way Starbucks demonstrates corporate social responsibility is through ethical behavior and the occasional unethical behavior. The first ethically positive thing Starbucks involves them self in is the NGO and Fair Trade coffee. Even though purchasing mostly Fair Trade coffee seriously affected their profits, Starbucks knew it was the right thing to do. They also knew that if they did it the right way, everyone would benefit, from farmers, to the environment, to their public image.

In the fall of 2010, Starbucks chose to team up with Jumpstart, a program that gives children a head start on their education. By donating to literacy organizations and volunteering with Jumpstart, Starbucks has made an impact on the children in America, in a very positive way.

Of course there are negatives that come along with the positives. Starbucks isn’t the “perfect” company like it may seem. In 2008, Starbucks made the decision to close 616 stores because they were not performing very well. In order for Starbucks to close this many stores in one year, they had to battle many landlords due to the chain breaking lease agreements. Starbucks tried pushing for rent cuts but some stores did have to break their agreements. On top of breaching lease agreements, Starbucks was not able to grow as much as planned, resulting their future landlords were hurting as well. To fix these problems, tenants typically will offer a buyout or find a replacement tenant, but landlords are in no way forced to go with any of these options. These efforts became extremely time consuming and costly, causing Starbucks to give up on many lease agreements.

As for Starbucks ethical behavior is a different story when forced into the media light. In 2008, a big media uproar arose due to them wanting to re-release their old logo for their 35th anniversary. The old coffee cup logo was basically a topless mermaid, which in Starbucks’ opinion is just a mythological creature, not a sex symbol. Media critics fought that someone needed to protect the creature’s modesty. Starbucks found this outrageous. In order to end the drama and please the critics, they chose to make the image more modest by lengthening her hair to cover her body and soften her facial expression. Rather than ignoring the media concerns, Starbucks met in the middle to celebrate their 35th anniversary.

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Starbucks’ Path to Settling With Union Laden With Legal Hurdles

By Robert Iafolla

Starbucks Corp. and the Workers United union are set to begin long-awaited negotiations next week, kicking off a process that must contend with federal labor board complexities before the hundreds of pending charges against the coffee giant could be put to rest.

Resolving open cases isn’t as simple as Starbucks and the union agreeing to the terms of a deal.

Instead, a chief obstacle is the need for them to get settlement approval from different authorities within the National Labor Relations Board depending on where each individual case is in the life cycle of an unfair labor practice dispute, legal observers said.

Video: What Employers Can and Cannot Do to Bust A Union

And with NLRB regional offices having issued roughly 130 complaints covering about 430 ULP charges since 2021, that could be a tall order.

“It would be a very complicated process to unscramble all the eggs, given that the cases are in very different procedural postures,” said Michelle Devitt, a former NLRB lawyer who represents unions and workers for Willig, Williams & Davidson.

After several years of unflinching, aggressive opposition to its workers unionizing, Starbucks signaled a major shift in its labor strategy in late February when the company joined the union in announcing plans to hash out a “foundational framework” designed to secure collective bargaining agreements and resolve litigation.

Starbucks Workers United has organized more than 400 stores since 2021, but the union hasn’t reached any labor deals with the company.

The many Starbucks ULP cases are at different phases in the NLRB process, which starts with a charge filed at the board, proceeds to a complaint if the charge has merit, and is then litigated before an administrative law judge, the board, and potentially a federal appeals court.

Jurisdiction, and who can approve a settlement, shifts as cases advance through that process.

Roughly 65 unfair labor practice complaints are pending before ALJs, and 54 judge rulings—including 53 that found labor law violations—have been transferred to the board. One additional ALJ case was transferred to the board without a decision.

A handful of board rulings are also on appeal before federal courts.

The NLRB has also sought several temporary injunctions against Starbucks in federal court that seek to preserve or restore the status quo while the administrative case proceeds.

And in the first case to reach the US Supreme Court, the justices are scheduled next week to hear the company’s challenge to a court order related to worker terminations at a Memphis store.

“It’s all over the place,” Jeffrey Hirsch, a former NLRB attorney who teaches labor law at the University of North Carolina, said of the Starbucks litigation.

From Conflict to Comity

The talks set to begin next week are intended to focus on establishing a process for later reaching deals on collective bargaining agreements, a fair process for organizing, and resolving litigation, according company and union announcements.

“We are dedicated to fostering a positive working relationship for Starbucks partners and are eager to develop a constructive partnership with the union,” Starbucks told Bloomberg Law in a statement—which refers to its employees as “partners.”

The union’s delegates might make proposals that affect all unionized workers, but each store’s union contract will be negotiated separately, the company said.

Starbucks Workers United declined to comment on potentially settling outstanding litigation.

The company and the union have already started working to resolve at least one major ongoing case at the NLRB.

Hearings were slated to continue this week in a nationwide failure-to-bargain case against Starbucks, but an administrative law judge canceled them in late March, citing “ongoing settlement discussions by the parties.”

That’s not the only evidence that the nationwide conflict that defined labor-management relations at the coffee giant is significantly decreasing.

A brewing shareholder battle at Starbucks that was driven by organized labor ended shortly after the company agreed to meet with the union.

And on the Starbucks side, the company released its planned timeline last month for granting pay increases and other benefits to workers at unionized stores who were excluded when those perks were first rolled out in 2022.

Different Interests

Compared to the sprawling administrative litigation at the NLRB, Starbucks and Workers United have a much simpler path to settle their dueling federal lawsuits stemming from the union expressing support for Palestinians, which are just between the company and the union.

In contrast, the unfair labor practice cases are technically between Starbucks and the NLRB’s legal arm, even though many of them began with a union charge filed with the agency.

The NLRB regional offices—acting as extensions of the general counsel’s office—are prosecuting complaints that are based on the union’s charges, which administrative law judges and the board adjudicate.

That difference in who’s primarily litigating cases is important in the context of resolving them through settlements.

Although NLRB lawyers are litigating against Starbucks based on Workers United’s allegations, the agency and the union don’t necessarily share the same interests in those cases, lawyers and law professors said.

Unlike the union, the NLRB has a broader mission: protecting public rights and accomplishing the policy goals of the National Labor Relations Act, which involve eliminating barriers to commerce by encouraging collective bargaining and safeguarding workplace democracy.

That might mean agency officials take a harder line on what Starbucks must offer to settle alleged violations of federal labor law.

Figuring out remedies for all the unlawfully fired workers is one challenge to resolving open cases, said Ellen Dichner, a lecturer at CUNY School of Labor and Urban Studies and former chief counsel at the NLRB.

“A global settlement would require Starbucks to make every discriminatee whole, which means reinstatement, back pay and compensation for foreseeable pecuniary harm,” she said. “If the company disputes the NLRB’s calculations, that could really drag the process out.”

Still, the agency—which has devoted a significant amount of its limited resources to Starbucks litigation—would probably welcome a broad, company-union agreement to resolve outstanding cases as long as it furthers the goals of the NLRA, said Thomas Lenz, a former NLRB attorney who represents employers for Atkinson, Andelson, Loya, Ruud & Romo.

“It would be a marquee moment for the agency if a settlement is reached,” Lenz said.

General Counsel’s Role

Settlements of unfair labor practice cases can be informal, especially in the early stages when the general counsel’s office manages the case.

As the case moves forward, any deals may need approval by an administrative law judge or the NLRB. The board can get involved by reviewing a challenge to an ALJ’s approval of a deal, or by considering whether to sign off on a formal agreement that can then be enforced in federal court.

For cases on judicial review, a federal appeals court might have to send a dispute back to the agency for final resolution.

The NLRB has some experience settling large disputes, though nothing like the legion of Starbucks cases spread across the NLRB litigation life cycle.

In 1993, for example, then-NLRB General Counsel Jerry Hunter helped negotiate a deal to resolve a massive consolidated nationwide complaint against Greyhound Lines Inc. that was based on charges filed by the Amalgamated Transit Union.

With Starbucks, current NLRB General Counsel Jennifer Abruzzo could take a lead role in reaching a global settlement of outstanding unfair labor practice cases, said Hunter, now a management-side lawyer at Bryan Cave Leighton Paisner LLP.

She could directly approve the resolution of cases in the early stages of litigation and ask the board to have others remanded back to her control, he said.

But NLRB members might be unwilling to allow the informal settlement of Starbucks cases in which administrative law judges have found labor law violations, said Rebecca Leaf, a former NLRB attorney who represents employers for Miles & Stockbridge PC.

“They would probably require a formal settlement,” Leaf said.

To contact the reporter on this story: Robert Iafolla in Washington at [email protected]

To contact the editor responsible for this story: Laura D. Francis at [email protected]

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