Starbucks History and Development

by Jason Shaw
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Contents

  • Introduction
  • Starbucks-Business Matrix and Capabilities
  • Business Elements
    • Corporate Social Responsibility (CSR)
    • Globalization
    • Crisis Management
  • Historical AnalysisStarbuck’s CSR Operation during 2007-2013
  • Starbuck’s Globalization Initiatives during 2007-2013 (Environmental Aspect)
  • Starbuck’s Crisis Management Initiatives during 2007-2013
  • Management Critique
  • Scenario Development 2018-2020
    • CSR & Sustainable Globalization Scenario for 2018-2020
    • Crisis and Catastrophe Management Scenario for 2018-2020
  • Competence & Comparison of Requirement
  • Conclusion
  • Reference List

Introduction

“The primary an only responsibility of business is to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game”

– Milton Friedman (1970, p. 37)

Was Milton Friedman (many believe that he was the greatest economist during second half of 20th century) right? Well, that should not be the question in the first place rather the question should be: is the idea of Milton Friedman relevant in context to modern business world? During the time of the eminent economist, concepts such as ethical decision making, corporate social responsibility (CSR) were at the budding stage, hence, most of the economists including Milton Friedman ignored the role of social responsibility for business. The value of ethics has grown within the business sector over the past several decades. Modern research scholars such as Jain (2009) and Tett (2009) criticised the immaturity in terms of ethical understanding among business leaders as the root cause behind the global crisis. The concepts like corporate social responsibility (CSR) is pretty much new for companies in emerging market and as a result, many of them are still struggling with implementation of a holistic CSR framework which can ensure social well being and environment sustainability. Visser (2010) and Velasquez (2000) argued that concept of corporate governance is generally misunderstood by business leaders because they believe that corporate governance is all about structure which is not correct. In such context, modern research scholars such as Waller and Conaway (2011) pointed out three important future challenges for organizations such as, 1-deploying CSR activities in comprehensive manner in most of its business verticals, 2-taking the strong leadership role by expanding business in cross cultural and country manner and 3- managing crisis in efficient manner in order to ensure smooth flow of operation. Issaksson and Jørgensen (2010) argued that companies need to work closely with their stakeholders in order to balance the environment sustainability activities and profit pooling activities. According to these research scholars, the profit-greedy mentality of organizations cannot help it to achieve sustainable growth because modern organization has to consider the effect of its operation in external environment. Du, Bhattacharya and Sen (2010) defined CSR as a commitment from corporate to ensure well being of social members and help the society to achieve inclusive growth. It is evident from the above mentioned definition that it is responsibility of companies to improve social life of people by using internal resources and good practices. Waddock (2008) even argued that companies can enhance their brand image by engaging in CSR activities which can help the company to fulfil ethical, social and environmental requirements.

Starbucks History and Development

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The researcher has selected Starbucks in order to understand how the above mentioned three factors such as CSR, globalization and crisis and catastrophe management can impact business environment of the company. After analyzing the business environment and its previous challenges for Starbucks, the study will predict future business path for the company. At first, the researcher will try to understand the business matrix of Starbucks.

Starbucks-Business Matrix and Capabilities

Starbucks Corporation was founded by Jerry Baldwin, Gordon Bowker and Zev Siegl during the year 1971 and the company is headquartered Seattle, Washington, U.S (Starbucks, 2012). Till date, Starbucks has established more than 20,000 stores (including owned and licensed stores) across the globe and established presence in more than 50 countries. The Seattle based company offers range of products such as hot drinks, different version of coffee items, desserts, beverages and many other types of merchandise to customers. Customers can enjoy the food items by visiting Starbucks restaurants or even purchasing Starbucks branded coffee products from retail outlets. As the year ended in 31st December 2012, Starbucks has reported market capitalization of US$51 billion (Yahoo Finance, 2013). Major competitor for the company includes global brands like McDonalds, Wendy’s International Inc, Nestle and Dunkin’ Brands. Brand positioning of Starbucks can be explained in the following manner;   

Figure 1: Starbucks Competitive Positioning

Starbucks History and Development

(Source: Brown, 2011)

Starbucks uses its resource capabilities in order to achieve high degree of product differentiation which can satisfy the demand of customers in comprehensive manner. Differentiated product portfolio of Starbucks can be depicted by using Boston matrix analysis. 

Figure 2: Starbucks – Boston Matrix Analysis

(Source: Lee, 2010)

According to the above model, Starbucks earn significant amount of revenue from its Frappacinos and instant coffee products, packaged coffee items of the company has recently been introduced in emerging markets and these items are earning significant return. On the other hand, VIA instant coffee of the company is still in its initial phase hence it is the cash cow. However, sales of bottled coffee products of the coffee are consistently declining for last few years hence these products are dogs for Starbucks. Starbucks uses multichannel distribution model which is comprised of retail channel sales, restaurants, licensed stores and owned stores. In many of the foreign countries, Starbucks has entered through licensing, franchising or establishing joint venture with local players (Lee, 2010). Although, Starbucks use product differentiation strategy in developed market but the same company has recently started offering low cost instant coffee range of VIA in order to attract price sensitive customers. Following focused low cost strategy will also help Starbucks to create competitive threat for private label and small coffee retailers (Lee, 2010). A brief resource capability analysis of Starbucks can be explained in the following manner.      

Tangible Resources Intangible Resources Capabilities
Physical resources of Starbucks include expanded distribution network, warehouses, restaurants, transportation facility and technological equipments. The company also maintains cash rich diversified product portfolio, high liquidity, cash assets and high return on its investment.     Strong brand image and intellectual property right regarding coffee manufacturing are one of the important potential intangible assets for the company. Efficient human resource pool of the company who are known for their responsive services can be termed as intangible resource for Starbucks.     Starbucks has the capability to use both of its intangible and tangible resources to offer differentiated product line to customers and achieve innovation in product offerings. Launch of low cost instant coffee VIA is showing the proof that Starbucks is capable of lowering the value chain cost by technology deployment.    

(Source: Lee, 2010)

Business Elements

In this section, the researcher will briefly discuss each of the three concepts highlighted in the earlier section in order to develop theoretical background of the next sections. These concepts such as corporate social responsibility, globalization and crisis and catastrophe management can be briefed in the following manner;  

Corporate Social Responsibility (CSR)

According to Brønn (2004), companies use CSR activities in order to enhance reputation among stakeholders and shareholders and also maintain relationship with external stakeholders. Modern research scholars such as Graafland, van de Ven and Stoffele (2003) argued that CSR is more important for small companies in contrast to small companies. N. Kakabadse and A. Kakabadse (2003) conducted extensive analysis of the research papers of previous research scholars tried to define CSR and came to the conclusion that it is not possible to define one standardized definition of CSR because the subject is multilayered. Different companies use different means to perform its social responsibility hence it is very difficult to set common CSR guidelines for companies. In such a perplexing environment surrounding the definition of CSR, Dumas (2006) came up with six building blocks of CSR activities for corporate world such as, 1- following the labour and human rights, 2- being active philanthropically, 3- taking active role in ensuring environment sustainability, 4- not tolerating corruption in the business practices, 5- offering quality products to customers which can improve the quality of their social life and 6- creating a strong corporate governance framework to fulfil ethical requirements.

Globalization

According to Klein (2008), multinational corporation (MNC) need to expand their business operation in emerging market in order to remain profitable and competitive in future. Venkatesh, Dhanasekharan and Thangavel (2008) also highlighted the fact it is a challenge for organizations to decide right internationalization policy which can help them to achieve greater return on foreign investment by adjusting the risk. Sikdar (2003) and Wallerstein (2008) argued that globalizing the business operations is a challenge for companies due to three reasons, 1- companies need to have proper knowledge of political and economic condition of foreign countries in order to decide successful international investment decisions, 2- companies need to design marketing mix which can suit the cultural and social orientation of foreign countries and 3- companies need to select right foreign investment partner in order to ensure smooth business operation in foreign countries.   

Crisis Management

Friedman (2006 and 2008) pointed out that crisis management has hardly any relationship with mismanagement but crisis situation can be created due to absence resource planning within organization. During crisis situation, managers need to prioritize those actions or loopholes in the business operation which needs immediate attention. Managing the crisis situation helps the organization to restore its equilibrium and ensure sustainability of operation. Goleman (2002) and Taleb (2007) pointed out that corporate leaders should facilitate communications among organizational members during crisis situation and this approach might help the corporate leaders to increase the understanding of crisis situation among organizational members. Careful consideration of Friedman’s (2006 and 2008) work reveals the fact that large organizations takes more time to understand the depth of crisis situation in contrast to small organizations. Multinational corporations (MNC) face difficulties to identify the crisis in particular small business unit due to its cross country expanded business presence. It can be assumed that, crisis management will be one of the pertinent challenges for large companies in future business world.   

Historical Analysis

Brief theoretical description of the above mentioned three business principle has somewhat created the silhouette of this section where the researcher will try to understand how Starbucks Corporation has addressed three pertinent issues like CSR, globalization and crisis management during the time period of 2007-2013. Such chronological analysis Starbuck’s operation will help to paint the future business scenario for the company. One thing to remember is that the historical analysis will be conducted in order to formulate business operation of Starbucks during 2018 – 2020 time periods.

Starbuck’s CSR Operation During 2007-2013

Analyzing last 5 years annual report of Starbucks reveals the fact that the company invested significant amount of resources in order to improve its corporate citizenship profile. The organisation had, towards the end of 2009, accomplished 500 CSR projects and at the end of 2012, number of CSR projects of Starbucks has crossed the 2000 mark (Starbucks, 2013a). Analyzing the CSR activities of Starbucks during the time period 2007-2013 reveals the fact that there were two CSR verticals such as environment sustainability and farmer support initiatives during first four years but initiatives like ethical sourcing has been recently added by Starbucks in its CSR portfolio (Starbucks, 2013b). Starbucks has established strong relationship with farmers who grow coffee beans and also provide them significant benefits in order to ensure ethical sourcing. In the last 6 years, Starbucks has increased penetration farmer support program in order to save farmers from getting exploited by middle men.  

Figure 3: Ethical Sourcing Target

Starbucks History and Development

(Source: Starbucks, 2013b)

Starbucks follow Coffee and Farmer Equity (C.A.F.E.) Practices in order to order to provide social and economic benefits to farmers. Separate division has been created in order to verify C.A.F.E practices are followed during sourcing. During 2007, C.A.F.E certified sourcing of Starbucks was less than 40% but over the last 6 years, C.A.F.E certified ethical sourcing has been increased over 90%. In the last 6 years, Starbucks has expanded its farmer support centres across sourcing countries and agronomists of farmer support centres help farmers regarding plantation, improvement of the quality of the coffee bean and decide the market price of the harvest. For example, Starbucks opened satellite farmer support centres in Guatemala City, Tanzania, Colombia etc in order help farmers regarding harvest of coffee beans. Providing benefits to farmers has not only helped them to earn profit from harvesting but also encouraged them to become long term partner with Starbucks. 

Figure 4: Farmer Support Target

(Source: Starbucks, 2013b)

Starbucks also offers fair trade access funds to Farmers and in the last few years the company has increased credit availability for farmers by more than 50%. In 2012, the coffee giant offered $1.3 million fair trade access fund to farmers with the collaboration of Grameen Foundation, Incofin Investment Management and Fair-trade International (Starbucks, 2013b). The Seattle based coffee giant has developed systematic environment sustainability plan in order to fulfil its corporate citizenship objectives. During the tenure of 2007-2013, Starbucks has doubled its renewable energy credit by decrease energy and water consumption in the store. Energy consumption in the supply chain has reduced by 15% in last three years and similarly carbon emission has reduced to 80% of its previous estimates (Starbucks, 2013b).

Figure 5: Green Initiatives of Starbucks

(Source: Starbucks, 2013b)

The Seattle based coffee giant has established partnership with U.S. Green Building Council (USGBC) in order to make restaurants company owned buildings environmentally sustainable or better to say make it as Green buildings. Building and restaurants of Starbucks have reduced overall greenhouse gas emission by 31% in last 6 years and more than 110 stores of the company got LEED (Leadership in Energy and Environmental Design) certified in last few years. The company has also planned to implement solar and recyclable energy in order to increase the intensity of green initiatives into further extent. Front-of-stores of Starbucks play significant role in recycling the packets used for packaging of food items. As of 2013, more than 24% stores of Starbucks are able to recycle packets and hot cups. In UK and Germany, Starbucks has successfully implemented three phase waste management facilities in order to divert almost 50% of production waste into recyclable elements. It is obvious from the aforementioned descriptions that Starbucks has taken significant amount of initiatives in order to restore the environmental balance of offer benefits to the society.

Starbuck’s Globalization Initiatives During 2007-2013 (Environmental Aspect)

This essay is not about understanding the business strength of Starbucks from its market presence, market penetration of product strategy rather the essay is all about understanding environmental impact of an organization. The concept of internationalization is already mentioned in the previous occasion which helps readers of this essay to understand how globalization can be linked with sustainability. According to research scholars such as Frynas (2008), Fox (2004) and Utting (2007) business leaders should think about sustainable development when it comes to expanding business in foreign countries. According to them, globalization means setting up facilities and operations in foreign countries but development should affect the social and environmental interest of foreign countries. However, these scholars stressed on need for global corporate governance for MNCs but the fact is that sustainable globalization is far broader concept. Starbucks has established its presence in more than 60 countries and during the time period of 2007 to 2013, the company has established thousands of recyclable resource centres across different countries in the globe. In different countries, company owned retail stores requested customers to bring reusable mugs in order to save wastage of papers. As of 2013, business operation in North American countries has saved more than 1 million pounds paper wastage (Starbucks, 2013b). In countries like Chile, China and Canada, Starbucks has established partnership with local players in order to encourage using recyclable cups.    

Figure 6: Green Globalization of Starbucks

(Source: Starbucks, 2013b)

Starbucks has divided its global operation into bio-regions on the basis of climate condition of the country. On the basis of climate sensitivity of different bio-regions, the company provide suggestions regarding harvesting to farmers. In 2010, Starbucks has established partnership with Conservation International (CI) in order to offer climate related harvesting suggestions to farmers. For example, in Chiapas, Mexico, Starbucks engaged more than 190 farmers and more than 20 local communities in order to conserve 500,000 hectares of reserve forests and 10 species of rare plants. In different parts of Africa, the coffee giant has initiated forest carbon program in order to increase employability of youth in those countries. In some cases, earning of local farmers has increased by more than 25% due to compassionate and mutually beneficial program of Starbucks. In South-East Asia, Starbucks has planted more than 300,000 trees in last three years (Starbucks, 2013b).  

Starbuck’s Crisis Management Initiatives During 2007-2013

During the period of 2007-2013, Starbucks has faced crisis situation in number of occasions. To be honest, the effort made by Starbucks management to handle these crisis situations cannot be appreciated. For example, during 2012, a derogatory speech from Starbuck’s UK managing director Kris Engskov maligned the reputation of the company (Ritson, 2012). Recently, the company has been accused for tax evasion charges in UK. However, the company has hired communication firm RLM Finsbury to handle the crisis situation and the PR firm used ‘3 Rs’ approach to manage the crisis situation such as, declaring regret on behalf of Starbucks management, announcing review of the flawed tax policies of the company and proposing remedy of £10m each year for next two financial cycles to respective authorities (Ritson, 2012). Starbucks was also accused of using transfer pricing in order to show that they are not earning profit from operation in particular country hence they are not liable to pay corporation tax. Starbucks uses low tax regions such as Ireland, Switzerland etc to offshore coffee supply and also supply from countries where earning profits is not taxable under UK law (Kinnear, 2013). Recent tax frauds of Starbucks raise doubts over its financial policy in developing nation where tax policies are far more lenient than developed countries. There are possibilities that the company may use such unethical financial practices in the future course of time hence it will be challenge for Starbucks to formulate a strong corporate governance policies which can prevent the top management to participate in any kind of fraudulent activities.                

Management Critique

Research scholars such as Van Beurden and Gossling (2008) and McWilliams and Siegel (2001) raised question over the true intention of companies while they adopt CSR strategies because they believe that in most of the cases, companies use CSR as a means to enhance brand image rather than providing benefits to society. Van Beurden and Gossling (2008) and McWilliams and Siegel (2001) also pointed out that an honest organization should try to integrate CSR initiatives with human resource management practices in order to improve the business performance in comprehensive manner. Research work of Freeman (2004) proved the relationship between CSR initiatives, stakeholder engagement and performance enhancement of firms. The problem with Starbuck’s environment policy is fairly similar with argument presented by above research scholars. Although Starbucks has invested significant amount of both financial and non-financial resources in order to improve its CSR initiatives in different parts of the globe but management of the company has still not taken sufficient measures in order to reduce use of paper fibre for its coffee cups. Till date, the company has not been successful to increase the use of post-consumer recycled product beyond the limit of 10% (Starbucks, 2013b). Although management of the company enhanced the limit of credit for farmer community but surprisingly they remained inert about providing credit facilities to small level farmers. Criticism is a harsh word rather the researcher will suggest Starbucks to diversify its CSR activities and avoid biasness regarding region wise development. From globalization perspectives, Starbucks management is not showing enough willingness to promote education or develop social life of farmers in interior region of Africa. For example, the coffee giant should provide more focus on East African and South Asian countries regarding sustainable development. Let’s look at the following examples in order to understand why industry analysts raise doubt over the intensity of sustainability program of Starbucks.    

Figure 7: Water & Energy Consumption Reduction of Starbucks

(Source: Starbucks, 2013b)

Coffee making needs extensive usage of water hence it is expected from coffee giant like Starbucks to reduce water consumption up to significant extent. But the real scenario is completely opposite, during the one year between 2011 to 2012, Starbucks has reduced its water consumption by only 0.1%. Stakeholders expect that Starbucks would reduce water consumption by significant amount but the management of the company has failed on that aspect. Starbucks management should be criticized for their inability to handle crisis situation. According to Ritson (2012), companies like Starbucks not only use transfer pricing to evade taxes but also use the technique to finance its strategic initiatives. Perplexity may arise in mind of people that how a corporate tax evader can like Starbuck can be a truthful messiah when it comes to performing CSR initiatives? Doubt may arise over the real intention of Starbucks regarding its CSR initiatives. It is evident from the above doubts and confusion that it will be challenge for Starbucks to prove honesty of intention of its CSR initiatives among stakeholders.

Scenario Development 2018-2020

Discussion about the environmental practices of Starbucks during 2007-2013 time periods has created significant amount of understanding about the challenges that might create problem for Starbucks in future course of time. From the statistical concepts and probabilistic estimations, it can be said that creating future map without using previous data is not good practice. Hence, the researcher has used the historical data of Starbucks to create the future plan. MNCs like Starbucks always use more than one plan such as plan A, plan B, plan C etc in order to decrease the risk factor associated with over dependency on one plan. Although research scholars such as Davis and Albright (2004), Othman (2006) and Malmi (2001) suggested that companies should use balance scorecard model for developing future scenario but due to unavailability of critical information such as learning, customer retention data, it would not be possible for the researcher to develop the scenario for Starbucks by using balance scorecard model. Rather, the researcher will use simplistic scenario planning model proposed by Ralston and Wilson (2006) and Harris (2013).     

Figure 8: Scenario Planning Model

Starbucks History and Development

(Source: Harris, 2013)

According to the above model, scenario planning for Starbucks would consist following steps;

  • Getting clear idea about environmental practices of Starbucks and understanding the key forces that can influence the environmental practices of the coffee giant.
  • Using tools and logic to develop the future of the company in context to historical analysis.
  • Finalizing the new scenario by testing the potentiality of proposed idea in the light of practical examples   
  • And guarantee that the business follows environmental and ethical requirements.
  • Isolation of learning outcomes from the scenario projection in order to control the future variation in the proposed model.  

CSR & Sustainable Globalization Scenario for 2018-2020

Starbucks earn its revenue by selling coffee products and economically can be predicted that the company will only be able to spend more resources on its CSR activities if it will be able to fetch greater revenue from its operation. Brief economic forecast about global coffee consumption during 2020 can be depicted in the following manner;

Figure 9: Starbuck’s Coffee Region Production 2020

Starbucks History and Development

(Source: Volcafe, 2013)

It is evident from the above economic prediction that coffee production in Columbia, Mexico and Costa Rica is going to reduce in 2020 due to environment and climate change but coffee production in Brazil, Vietnam etc will be significantly increase during 2020. Hence, Starbucks should shift the base of its Latin American operation in next 7 years in order to continue its coffee bean supply. On the basis of economic scenario, it can be suggested that Starbucks should focus more on Asian countries and few selected Latin American countries such as Brazil, Paraguay in order to promote CSR activities and provide social and economic benefits to farmers. Starbucks has set the target to reduce the electricity consumption by 25% in next three years but the study will recommend that Starbucks reduce the dependency on non-renewable energies by 70% by the year 2020. During 2018-2020, Starbucks should be able to use non-renewable energies such as solar energy, bio-gas energy and wind power in coffee manufacturing plants in extensive manner. The company should be able to implement the green building concepts in 100% manner be the end of 2020. Due to the adaptation green building concepts in different stores, warehouse, manufacturing plants and restaurants, Starbucks will be able to reduce the green house gas emission by significant amount in 2020. Another important thing is that, use of Air-condition should be avoided in the stores by the end of 2020 and Starbucks can replace the artificial cooling of air-condition by designing cross ventilation in the stores which can work as natural coolant. During 2018-2020, water consumption should be reduced by Starbucks to 50% and they can achieve this target by using hybrid machines which can recycle waters. The company should also be able to find the solution to stop consumption of papers throughout the value chain by the end of 2020. For example, in some stores Starbucks has started using coffee container manufactured through hemp products recycling (Starbucks, 2013b). The company should increase its research & development expenditure in order to find substitute of paper which can be used as coffee containers. From sustainability side, it can be suggested that the company should invest significant amount of resources in order to improve rural education of children of farmers working for the company as suppliers. By the end of 2020, Starbucks should target to open 100 rural educational societies across countries of continents like Africa, South America and Asia. By the end of 2020, Starbucks should be able to provide at least $100 million as loan to farmers in order to help them to buy essential elements to harvest coffee grains. Starbucks should increase the credit facility to farmers by establishing coalition with three important players in farmer development issue such as Incofin Investment Management, Fair-trade International and Grameen Foundation.  Establishing separate farmer community will help the coffee giant to provide technical assistance and required education to farmers which can help them to harvest better quality coffee. By the end of 2020, Starbucks should set the target to set at least two farmer community in every sourcing country.

Crisis and Catastrophe Management Scenario for 2018-2020

Apart from recent tax evasion crisis, Starbucks has also faced financial crisis during 2008. In 2008, Starbucks closed more than 500 of its stores due to declining profit margin and increasing cost of store based operation. Although Starbucks handled the financial crisis quite successfully by decreasing the cost of store operation but they failed miserably to handle the PR crisis regarding fraudulent tax practices. The business should have until the end of 2020, be able to develop its own PR and crisis management group which can advise the company how to handle critical situations. Moreover, the coffee giant should strengthen its corporate governance norms in order to avoid malpractices like transfer pricing, hiding profit from financial result or committing financial fraud. Starbucks should also work with local weather department of sourcing countries in order to develop buffer plans for any kind of catastrophe or climate change which negatively impact the production of coffee. 

Competence & Comparison of Requirement  

Historical analysis of environment activities of Starbucks reveals the fact that the company needs to develop green supply chain model in order to increase the effect of its CSR activities and social initiatives. Following the green supply chain model would definitely reduce the green house gas emission throughout the value chain and also help the company to reduce the cost of operation. The company should develop the competency regarding engaging all the internal and external stakeholders to its CSR initiatives. Adopting green supply chain model will help Starbucks to finance its CSR initiatives and stakeholder engagement model will help the coffee giant to bring sustainable development. Using recyclable materials to decrease the green house gas emission can be an important competency drive for Starbucks. Apart from such competencies, other required competencies have been discussed in detailed fashion in the earlier sections hence no further discussion is done here. Comparison of the requirement to improve competency during 2018-2020 can be compared with competency of Starbucks identified during historical analysis of the period 2007-2013 in the following manner;

Competency (2007-2013) Future Requirement
Starbucks has the financial capability to provide credit and financial support of worth $15 million to farmers and decrease the energy consumption by 17% in order to get the renewable energy credit. At present, the coffee giant doesn’t follow any green supply chain model and concept of sustainable supply chain is pretty vague. The Seattle based coffee giant has established partnership with ethical sourcing agencies like Fair-trade International, Incofin Investment Management etc in order to ensure environmental sustainability in operation.        In order to satisfy the environment objective for 2018-2012, the company needs to expand its sourcing operation in countries like Vietnam, Brazil etc. Starbucks need to spend huge amount of money in research and development in order to find substitute of paper which can be used as coffee container. The company also need to adopt the concepts like Cooperation with Customer (CWC), Eco-Design (ED) and Green Purchasing (GP) in order to implement the green supply chain model.

 

(Source: Starbucks, 2013b)

Conclusion

It is evident from the above discussion that Starbucks has already taken significant amount of measures in order to fulfil their environmental and social responsibilities. However, in some cases, the company is lagging behind its target environmental objectives due to various macro and micro environmental reasons. In the next seven years, the company should develop a sustainable green supply chain model which can help them to address much of the environmental requirements. Starbucks should also diversify the social development initiatives both contextually and geographically in order to achieve sustainable development objectives in holistic inclusive manner. Finally, in the next 7 years, the coffee giant should adopt a transparent ethical policy in order to address the interest of stakeholders in sustainable manner.

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