Friday, 21 August 2015

Starbucks: A Model of Successful Business

by Rushiqah Dahlan

Howard Schultz, CEO of Starbucks

Starbucks – a company that started small, but dreamed big – is now the largest coffeehouse company in the world. Everybody knows that. Here in Singapore, you can spot at least one store wherever you go. Considered as one of the most successful and admired companies today, Starbucks has grown organically from one local business in Seattle to more than 20, 000 stores in over 65 countries!

Current CEO of Starbucks, Howard Schultz, was a general manager for a Swedish drip coffee make manufacturer, Hammerplast, when he first visited Starbucks in Seattle. When he saw great potential of Starbucks, he joined the team as he wanted to connect his life with it.

When Schultz went to Italy, he was inspired by the Italian coffee culture that he insisted that Starbucks adopts the Italian café model – small coffee houses at every corner of every street, which serves cups of brewed coffee and customers spend their time at the café with friends or families. When his idea was not accepted by the management, he left the group and started his own coffee business, Il Giornale, which was a success. When Schultz earned enough money, he bought Starbucks for about $4 million. His main goal was to expand Starbucks to numerous locations.
Starbucks underwent massive growth in just a few years and continued exponential growth from there. Between 2007 and 2008, there were Starbucks stores opening every weekday!

Small businesses have so much to learn from Starbucks and its fearless leader, Schultz. Besides the taste of its coffee, there are a handful of elements that propelled Starbucks to the forefront. Here are the key factors that contributed to the success.

1. Schultz’s Passion

“The most powerful and enduring brands are built from the heart.” – Howard Schultz

If it wasn’t for Schultz’s love for coffee, he would have given up and there would be no Starbucks. He was genuine and very determined to make his dreams come true. It was his passion and commitment that motivated him to work hard in order to achieve his goals.

You cannot fake true passion because people will immediately notice it. You (and your employees) need to love your products and services in order to get others to love them as well. Whenever you feel like giving up, think of what you can do to regain the passion and excitement you felt when you first started your business.

2. Know your customers and employees

At Starbucks, giving customers a memorable, personal experience is one of the most important factors that make them happy. Set up a customer contact programme to keep in touch with customers. Ask them questions to understand them better or ask for feedbacks to gain valuable insights, in terms of what is good and what to improve. When you cater to their needs and interests, they will most likely stay loyal to your brand.

Schultz once mentioned, “The way we have built our company by including the success of the company with everyone in it and not leaving our people behind is a great example of building a business the right way. We’re not ever going to turn our backs on our [employees].”

Don’t forget about your employees! They are important too, they help you run your business. Take time to get to know them and what they expect from the organisation. When you know your employees very well, they will feel appreciated and motivated to perform well at work.

3. Be innovative and take risks

“Don’t do things the way they’ve always been done. Don’t try to fit the system. If you do what’s expected of you, you’ll never accomplish more than others expect.” – Howard Schultz

Starbucks is extremely innovative. For instance, realising that consumers want to spend more time at its location, Starbucks began providing free Wi-Fi in 2010. They produced instant coffee for those who wanted to enjoy it at home. Now, they even allows customers to pay using their iPhone app. However, they did their best to stay true to its roots.

It is important to be adaptable, welcome changes to your business, think out of the box and be different. With the technology getting more advanced, your business needs to keep up with the changes as well.

4. Embrace social media

We all know that social media plays and important role in promoting and marketing your brand, but how can you perfect your social media presence. Starbucks used Instagram to tell its brand story. They used it to showcase their products, and also share images of customers enjoying their products.

You have to find the right platform for your businesses. Use it wisely, as Schultz pointed out that “the mistake most companies are making is that they are using social media as an opportunity to sell stuff. It’s really not designed for that.” That’s because you should use social media to increase brand awareness, engage in conversations with customers, maximize brand loyalty and demonstrate brand values, not to directly sell your products or services. This will then hopefully get users or viewers to buy or encourage others to buy from you.

5. Emotional connection

“Starbucks represents something beyond a cup of coffee.” It aims to provide people – regardless of age, profession or location – with an emotional and unique experience: a place to rest and relax from a busy day, socialize, work and even daily destination. Starbucks is often homey and welcoming. Starbucks wants their customers to feel that they care for them. You should too. Creating strong emotional connections with your clients will in turn drives repeat business.

Remember, Starbucks started out really small, just like any other business. However, with an open mind and network, almost nothing is impossible. You should stay true to your passion and what inspires you, like Schultz did. A piece of advice from him, “Believe in your dreams. Dream big. And then after you’ve done that, dream bigger.” 

We are proud to have Starbucks as one of the sponsors for IGNITE! Music Festival this year! After all the jumping and moshing, you can find Starbucks booth at IGNITE! Village and buy a cup of happiness! Remember to be kind and thank the baristas afterwards.

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