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Starbucks Coffee

Place

your logo here

Presentation by: Group 8

Shivangi Sharma

Ridhya Bansal

Thiago Araki

Kyra Lalwani

Zarafshan Rizwan

Introduction

  • Italian-style American coffeehouse chain

  • Founded in Seattle, Washington in 1971

  • Largest Coffeehouse company in the world

  • 25,000 stores in more than 70 countries

  • Mission Statement: "To inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time"

History

Starbucks: The Early Years

  • Jerry Baldwin, Zev Siegel, & Gordon Bowker opened the first store in Pikes Place, a touristy area in Seattle

  • Customers were encouraged to learn how to grind the beans & make brewed coffee

  • They sold bean and coffee makers.

  • The store did not offer fresh brewed coffee sold by the cup

  • The store was an immediate success

Howard Schultz

Howard Schultz

  • Business man from New York visited Starbucks in 1981

  • Offered a job at Starbucks in September of 1982

  • Schultz vision for Starbucks:
  • Bring the concept of Italian Bar to the US
  • Expand the company

  • Starbucks owner did not share the same vision

  • Schultz left Starbucks to open IL Giornale, a coffee bar based on what he saw in Italy

  • Two year later, Schultz bought Starbucks for $3.8 Million

Summary

Summary

  • Program to help employees earn college degree at the Arizona State University through an online program.

  • Starbucks will cover 100% tuition (tuition ranges from $3,000-$10,000).

  • More than 50 programs are available.

  • Employees are not obligated to stay in the company after graduation.

  • Only 54% of the employers offer undergrad tuition but want employees to take job related courses.

  • Of their 135,000 employees in the US, about 70% are in college.

https://youtu.be/281TUpUHrjY

- Why?

- Problem?

Why is Starbucks doing this?

  • It believes the expense is worthwhile because this benefit supports a strategy of employee retention (differentiates it from other employers).

  • The value of the benefit entices employees to stay the company (continue in executive positions) and hopes that even graduates who move on will promote Starbucks as a great place to work.

  • Social Responsibility assumed by Starbucks - CEO of the company Mr. Howard Schultz talks about the "the fracturing of the American Dream" and position tuition reimbursement as a way of taking action

Problems

  • Online course completion rates are low- not everyone is comfortable learning in that kind of a setting.

  • Arizona State University online tuition rate is high relative to national averages for instate college tuition.

- adding to the cost of the company

  • The criteria to enter the program is very vague and not explicit.

  • Not something everyone will benefit from- what if you don’t want to do it ?

  • Workers in licensed Starbucks stores — rather than company-operated stores — are not eligible for the Starbucks plan.

Case Question I

Case Questions

How well do you think Starbucks tuition reimbursement program meets the criteria for selecting employee benefits?

  • Cost Benefits
  • Organizational Objectives
  • Employees Expectations

Case Question II

Case Question II

If you had been advising Starbucks, would you have recommended that it introduce the reimbursement plan or instead raise hourly wages?

  • Cafeteria style benefit
  • increased flexibility
  • Increased utilization of resources

Recommendations

Recommendations

  • Cafeteria Style Benefits allow employees to choose the benefits they want

  • Employees can work with HR professionals to discuss what benefits work best for them

  • The degrees offered by Arizona State University might not be sufficient for the employees to choose from

  • Not all employees are eligible for the reimbursement program

HR Concepts

Employee Benefits

Employee Benefits

  • Federal Benefits:
  • Social Security
  • Workers Compensation
  • Family/Medical Leave
  • After 3 months of employment:
  • Health
  • Dental
  • Vision Insurance
  • After 1 year of employment:
  • 401k Retirement Plan
  • Paid Time Off (PTO)
  • Vacation
  • Free beverages during breaks
  • Pound of coffee beans each week

Employee Retention

Employee Retention

  • Relatively high turnover rate of 65% for full-time employees in 2018

  • Enticing benefits allow employees to continue to work there

  • Flexible work schedules and relaxed dress code

Reasonable Accommodation

Reasonable Accommodation

  • Being able to accommodate for individuals with disabilities

  • Wearing watches is not part of dress code, but allowed if it monitors heart rate

  • Opened a store of all deaf employees at Gallaudet University, Washington D.C., where they speak through sign language

Thank You!

Thank You

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