Free Starbucks Corporate Social Responsibility Research Essay Sample
Background of the company
Starbucks, the largest coffee-company and coffeehouse in the world, was founded in 1971. The organization started as a roaster and retailer of the ground and whole bean coffee, tea and spices, operating in a single store in Seattle, WA Pike Place Market. Today, Starbucks connects with millions of consumers around the world with exceptional products and over 19,000 retail stores in more than 60 countries.
The primary products offered by Starbucks are coffee and tea. Handcrafted beverages include fresh-brewed coffee, iced and hot espresso beverages, Starbucks Refreshers, Frappuccino coffee and non-coffee beverages, teas and smoothies. Starbucks merchandise presents tea- and coffee-brewing equipment, Verismo SystemTM, labeled mugs and accessories, music, books, gifts, and packaged goods. Among fresh food, recently updated and introduced by Starbucks, are sandwiches, baked pastries, salads, oatmeal, fruit cups and yogurt parfaits.
Starbucks has almost 33% of the coffee market share in the U.S. The company sells as much coffee as do the convenience stores and fast food restaurants combined, although most of its consumers live in cities or large upscale suburban areas. Total number of stores is 19,767. Apart from the coffee- and tea- houses in America, the company sells its products in such countries as Argentina, Australia, Brazil, China, Japan, Romania, England, Ireland, France, Poland, Russia, Turkey, Spain, India, and others. The organization has been able to gain such a big market share by satisfying the needs specifically of its well-defined target audience. The primary target market of Starbucks is men and women 25 to 40 years of age. They occupy almost half, 49%, of its total operations .
Starbucks financial snapshot
Net income or bottom linein business is what remains after subtracting all the costs from the companys revenues.From 2012 to 2013, Starbucks revenuesincreased from $13.3 billion to $14.9 billion, despite the shrinking of itsbottom linefrom $1.4 billion to $8.3 million. Marketcapitalization represents the aggregate value of the company. It is obtained by multiplying the number of shares outstanding by their current price per share. The Starbucks market cap or a total value of the companys issued shares is $55.5 billion.
Starbucks Corporate Social Responsibility (CSR) Research
Starbucks history of CSR
Starbucks is a relative pioneer at CSR. Its website contains Corporate Social Responsibility reports since 2001 up to 2012. The Starbucks CSR fiscal 2012 annual report has the message from Howard Schultz, a chairman, chief executive officer and president, to all the stakeholders. The company profile is discussed in the report as well. The sources of ethics, the ways of reducing harm to environment and bringing benefits for the community, including goals and progress, occupy the largest part of the report. The scope, boundaries and informational integrity of the CSR report are listed at the end of it. It also includes both policies and practices. For instance, Starbucks is working on the policy of reducing environmental pollution and increasing amount of garbage from disposable cups and plates in urban areas. The practices of the company include finding solutions for recycling cups and reducing waste by promoting reusable cups. The report is complete, easy to read and follow. It has the link to the reports of the previous years. While the names of most reports have been the Starbucks Corporate Social Responsibility Report, since 2008, the organization introduced the new name, Global Responsibility Report: Year in Review. It is a stand-alone report, which has its own page on the official website. It contains some data with each goal and progress section in order to demonstrate the details of the studies done by the company. For instance, in 2012 CSR report, the goal of reducing energy consumption by 25% in the stores by 2015 is discussed. Along with this information, the report provides the progress of this goal and the graph with the average electricity use per square in the U.S. and Canadian company-owned stores.
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Starbucks Corporations CSR is called to make sure that their stakeholders demand of transparency in the companys business communication, and expectation of the organization to acknowledge the impact of its operations on its surroundings, is met. Despite the fact that Starbucks primary social responsibility focus are customers, employees, suppliers, shareholders, and communities, CSR of the company is generally perceived of as both moral and ethical approach called to benefit all stakeholders, including environmentalists and government. The CSR strategies include both activities and CSR communication to different stakeholders, aiming to increase their awareness. This is important because stakeholders are the main reason why organizations engage in CSR in the first place to facilitate their business legitimacy. Starbucks is not an exception. Starbucks has adopted value strategies with regard to their stakeholders. For instance, during the fiscal year of 2001, there were concerns from some customers and shareholders regarding: the possible presence of genetically modified materials in the products of the company. Starbucks, in turn, has prepared the confirmation that the core products are not genetically modified, and stated that they had no intention to purchase or sell genetically engineered tea or coffee. Starbucks ensures that if consumers are concerned with genetically modified products, the company will act to address the needs of customers by introducing feasible alternatives. Hence, in July 2001, the corporation started offering organic certified milk, which is rBST-free, as requested in the U.S. company-owned stores.
However, there are some challenges associated with Starbucks CSR. One of them occurred when baristas were unhappy with their employers. Thus, they filed a legal complaint against the organization for violating their rights through unlawful inspections and some other questionable tactics. Starbucks employees in England, Australia, the USA, Spain and Austria, demonstrated in front of the coffee-shops to protest the organizations union-busting practices. Another challenge is associated with the criticism and questioning of the Starbucks fair trade and sustainability farming programs.
Stakeholders primary interests
The primary interests of customers are the best, high-quality product with the best-possible service, which is covered in the Starbucks goals. Employees are interested in fair salary, job security and confortable working conditions. Environmentalists main interests, similarly to communities, include acting according to the values of the Starbucks CSR. Investors are primarily interested in income and return on investment, while suppliers in fair business opportunities with Starbucks. Governments are interested in legislation, employment opportunities, and taxes that need to be paid by the company.
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Starbucks policies and practices
2001 Starbucks Social Responsibility Report presents policy, which assumes seeking suppliers who share the values of the company. Main suppliers get the Starbucks Supplier Handbook, which encourages adhering the environmental mission statement and the purchasing policy. The company practices building a very diverse network of suppliers who are always asked to provide the energy-efficient products and adopt techniques, which maximize the efficiency of wood use in design of the products. Starbucks also has policies with regard to environmentalists and communities. The policies include minimizing the environmental impact. The practices consist of efforts in such areas as coffee/tea and paper sourcing, electricity, water and gas use, and transportation impacts. Starbucks also attempts to treat coffee farmers responsibly by offering the fair trade coffee to customers, which, however, caused the world debate on whether it is the economically convenient practice. Starbucks invests a lot in each shareholder area, especially in customers, environmentalists and communities. Starbucks is proactive in its CSR practices. However, it should pay more attention to the government. The company paid only ?8.5 million in taxes to the UK government between 1998 and 2008, paying nothing since then, in spite of total sales of ?3 billion during the past three years. That way it became unprofitable to the country. Although Starbucks has made the first payment of ?10 million in 2013, with another ?10 million to be paid in 2014, in order to become a true socially responsible company with regard to governments, those delays in tax payments are unacceptable.
Starbucks has been involved in CSR since 2001. Even though the company takes care of most of its stakeholders, it needs to be more proactive in their practices with regard to employees and governments. The company is on the right track for improving its bottom line and image in the society, but some of its practices, such as fair trade, are still questionable.