Starbucks is a well-known company and brand worldwide. Customers love the environment and atmosphere of Starbucks franchises. What might not be obvious to customers and competition is the fact that Starbucks has effectively utilized social media to promote, enhance and launch products as well as services. In order to understand the foundations of it success it is important to understand the origins, culture and growth of Starbucks.
Starbucks Brief History and Background
Starbucks began in 1971 when three academics—English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker—opened a store called Starbucks Coffee, Tea, and Spice in the touristy Pikes Place Market in Seattle. The second Starbucks opened in 1972 after the purchase of a roaster from Holland, which established the coffee roasting operations.
The approach that Starbucks used creating the brand was to provide a quality product. When Starbucks first started out, it depended mainly on word of mouth to attract customers into the door; in the present Starbucks uses social media. Once new customers arrived, it was the level of quality of the roasted beans along with the rich flavors of its brewed coffee that would impress them and kept them coming back or more (Gamble & Thompson, 1999).
In 1981, Howard Schultz met with Jerry Baldwin and Gordon Bowker who shared with him some of the quality samples of the Sumatran flavor coffee roasted from the finest Arabica coffees. Schultz was impressed with the operations of Starbucks and wanted to join. After months of negotiating, in 1982 Schultz was hired on as Director of Marketing and oversaw the all of the retails stores. With Schultz’s marketing driven business plans and competitive ideas, in 1990 Starbucks expanded its headquarters in Seattle with a total of eighty-four stores (Starbucks, 2011). Today there are over 16,858 Starbucks locations globally. In 1996, it opened its first non-North-American store in Tokyo. Over the years, Starbucks has created the image of a strong retailer, roaster and brand of specialty coffee in North America and the world.
Strategies and Plans
According to Gallaugher & Ransbotham in “Social Media And Customer Dialog Management At Starbucks”, the approaches and plans implemented by Starbucks are the essential the factors that make Social Media Strategy (SMS) successful. The factors for realization address aligning social media with its culture and strategy, organizing based on structured roles, guiding execution based on professional principles, practicing consistency and allocating adequate resources and activities.
Innovation
Social media has been around for a while, becoming a common via of communication for millions of people around the word. This media makes up one quarter of user time (Gallaugher & Ransbotham, 2010). It allows companies and the general public to expand their communication to reach greater audiences more effectively than old fashion communication. It is common that companies hesitate to adapt new technology due to cost, lack of resources, limited architecture, or dullness (Galliers, 2009). Even though organizations value customer feedback, many have not been proactive at adapting the social media environment for customer interaction. Social media provides an effective and direct way of communication with customers. This can be seen when social media allows identifying the strengths and weaknesses of products and services offered by listening to customers suggestions, which is due to the 3-M framework that social media provides. The 3-M framework consists of the following: Firm to customer (Megaphone), customer to firm (Magnet), and customer to customer (Monitor). This framework consists of reaching out to big audiences, attracting customers, and engaging customers to make note of the firm’s products. In order to adopt social media and it 3-M framework a formal strategic information systems plan is critical for true realization (Gallaugher & Ransbotham, 2010).
The fact that Starbucks’ CEO has been an advocate for technology displays the firm’s full support to fulfill the initiative of utilizing social media to promote the brand. Moreover, the Business System Planning (BSP) practice involves top-down planning with bottom-up implementation, which relies on a well-defined methodology and leadership support for its success (Galliers, 2009).
The effectiveness of the chosen methodology to be implemented by a firm relies on availability of resources, well-defined processes and definition of desired output. Allocating adequate financial and human resources, along with time, enable proper project effort and analysis for success. It is imperative to outline operative processes based upon actual analysis and findings, leading to prosperous results centered on a comprehensive, applicable and well-executed plan.
Because working in teams requires every player to be on the same page, it is necessary to generate delimited specification and methodology that leads to the ultimate goal. Putting adequate research analysis upfront allows for complete documentation and planning, which reduces redundant effort during implementation. Furthermore, diligent analysis allows accounting for issues and barriers by formulating possible solutions and workarounds. This enhances implementation by ensuring that a plan is executed step by step. Upper and functional management as well as implementers need to have a clear understanding of the plan and its priorities for successful execution. This entails appropriate scheduling, coordination, implementation, and completion of a plan. The use of social media relies heavily on an integrated architecture that not only allows brand identifications, but also provides full compatibility and communication among the different social media portals adopted and implemented by the firm (Galliers, 2009).
In order to successfully execute a project, appropriate time, tools and operators are essential for successful completion. This entails adequate allocation of computer support, timing, training, and financial resources. It also requires organizations to focus on the ultimate goal, by willing to allocate sufficient resources without of expecting immediate results. In addition, a new plan and methodology requires appropriate training of current personnel or additional work force, which should be prioritized. Therefore, if the company does not have team members with the necessary skills a plan should be established to meet such criteria. The overall resources needed are a requirement that management should include in their company’s budget.
Megaphone, magnet and monitor may have their own functionality, but they complement each other. From the 3-M framework, monitor might be the most successful due to the fact that it provides an inexpensive way to provide quick responses to customer complaints, suggestions and requests. Likewise, monitor produces useful data that would otherwise be purchased from a marketing information firm such as J.D. Power and Associates.
Generally, customers go online to review a product and see what other have to say about it before making a big purchase, which now a day is very common. Overall, Starbucks has effectively adapted social media as a tool to decipher what costumers think of its products. One possible issue that Starbucks might have regarding the use of social media might be the fact that it heavily relies on it to understand its customers. This approach overlooks other current or potential customers that are not interested or engaged on social media networks. At the end of the day, active social media users do not necessarily represent the overall pool of current or potential customers.
Bibliography
Gallaugher, J., & Ransbotham, S. (2010). Social Media and Customer Dialog Management At Starbucks. MIS Quaterly Executive , 9 (4), 197-212.
Galliers, R. (2009). Strategic Information Management, Challenges And Strategies In Managing Information Systems (4th Edition ed.). New York, NY: Routledge.
Gamble, J. E., & Thompson, A. A. (1999). Starbucks Corporation. New York, NY: The McGraw-Hill Companies.
Starbucks. (2011, August). Starbucks Company Timeline. Retrieved January 18, 2012, from Starbucks: http://assets.starbucks.com/assets/aboutustimelinefinal72811.pdf
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