Read through the case study below and answer all questions (at least one paragraph for each) in a Word related document
Posted: Sat Feb 19, 2022 3:06 pm
Read through the case study below and answer all questions
(at least one paragraph for each) in a Word
related document or in the text box provided.
Starbucks Perks More Than Coffee
At Starbucks, CEO Howard Schultz understood that the single most
important aspect of creating an enduring brand is its people.
Schultz wanted to set Starbucks apart from other coffee shops and
service businesses, and he did this by offering health benefits and
stock ownership for people who work part-time. It had never been
done before, and it came with a cost.
In addition to employee benefits, funding to build the brand was
funneled into operations to create an experience that would enable
the brand to endure and be sold profitably for many years to come.
So instead of expensive marketing and advertising campaigns, the
company focused on experiential marketing.
Scott Bedbury, the president of marketing of Starbucks at the
time, explains. “The stores were once four white walls. There was
no comfortable furniture or fireplaces or music. So we set out to
create an experience in the stores and a level of brand equity that
most traditionally marketed brands couldn’t touch. That meant
constant creative development of products, and the look and feel in
the stores. It wasn’t cheap. The first year, we spent $100 million
building out stores, which is a significant marketing budget for
anyone.”
But the defining moment for the brand was the stock option and
employee benefit plan. This laid the foundation for the company’s
internal brand, and was Schultz’s mission from the very beginning,
explains Bedbury. “When Howard took over the company, he was not a
rich man and he didn’t own a house or even a car. Howard grew up
poor in Brooklyn and was influenced strongly by his dad, who never
got health benefits from any of his employers. This fueled Howard’s
drive to create a company that put employees first. He is
passionate that when it comes to customers versus employees,
employees will always come first.”
But it wasn’t easy, and it took a lot of courage to present this
idea to investors. Bedbury said, “When Howard tried to raise $2.8
million to buy the company from the three founders, he made 220
presentations and he got shut down in all but 12 of them. He was
seen as an idealist who was going to put an unnecessary burden on
the bottom line by offering benefits to part-time employees who
viewed this as a temporary job. But Howard convinced them that
turnover would drop, which it did. Store manager attrition was 15
percent, part-time hourly employees was 65 percent, compared to
McDonalds and Taco Bell, which were about 200–300 percent a year.
That’s turning over your work force every four months, and when you
do that, your service suffers and there are all kinds of problems.
I don’t know why more people don’t do it. If you give up some
equity to employees, they’ll reward you for that.”
Critical Thinking Questions (Feel free to do any outside
research to find examples)
(at least one paragraph for each) in a Word
related document or in the text box provided.
Starbucks Perks More Than Coffee
At Starbucks, CEO Howard Schultz understood that the single most
important aspect of creating an enduring brand is its people.
Schultz wanted to set Starbucks apart from other coffee shops and
service businesses, and he did this by offering health benefits and
stock ownership for people who work part-time. It had never been
done before, and it came with a cost.
In addition to employee benefits, funding to build the brand was
funneled into operations to create an experience that would enable
the brand to endure and be sold profitably for many years to come.
So instead of expensive marketing and advertising campaigns, the
company focused on experiential marketing.
Scott Bedbury, the president of marketing of Starbucks at the
time, explains. “The stores were once four white walls. There was
no comfortable furniture or fireplaces or music. So we set out to
create an experience in the stores and a level of brand equity that
most traditionally marketed brands couldn’t touch. That meant
constant creative development of products, and the look and feel in
the stores. It wasn’t cheap. The first year, we spent $100 million
building out stores, which is a significant marketing budget for
anyone.”
But the defining moment for the brand was the stock option and
employee benefit plan. This laid the foundation for the company’s
internal brand, and was Schultz’s mission from the very beginning,
explains Bedbury. “When Howard took over the company, he was not a
rich man and he didn’t own a house or even a car. Howard grew up
poor in Brooklyn and was influenced strongly by his dad, who never
got health benefits from any of his employers. This fueled Howard’s
drive to create a company that put employees first. He is
passionate that when it comes to customers versus employees,
employees will always come first.”
But it wasn’t easy, and it took a lot of courage to present this
idea to investors. Bedbury said, “When Howard tried to raise $2.8
million to buy the company from the three founders, he made 220
presentations and he got shut down in all but 12 of them. He was
seen as an idealist who was going to put an unnecessary burden on
the bottom line by offering benefits to part-time employees who
viewed this as a temporary job. But Howard convinced them that
turnover would drop, which it did. Store manager attrition was 15
percent, part-time hourly employees was 65 percent, compared to
McDonalds and Taco Bell, which were about 200–300 percent a year.
That’s turning over your work force every four months, and when you
do that, your service suffers and there are all kinds of problems.
I don’t know why more people don’t do it. If you give up some
equity to employees, they’ll reward you for that.”
Critical Thinking Questions (Feel free to do any outside
research to find examples)