When Starbucks chairman Howard Schultz visited stores in 2006, he found they were lacking the soul of the original brand. To address this, he returned as CEO and closed all stores for a day to retrain baristas. The goal was to refocus on quality over speed and bring back the original culture of one-on-one customer interactions. Machines were replaced so baristas could personally make each coffee. This emphasis on quality and customer experience helped Starbucks regain its cultural roots and drive continued financial success.

1. CASE -5 STARBUCKS RETURNS TO ITS ROOTS

2. SUMMARY
This case is about The Starbucks corporations, an
American global coffee company and coffee
house company based in Seattle, Washington.
The company started with 11 stores in the year
1987 and grew to 2,600 stores in the year 2000.
The growth was because of the culture of
Starbucks where each customers was treated as a
valued guest who should feel comfortable and
relaxed in the shop and should also rejoice the
distinct ambience of the store. This unique
culture was truly put to test in the face of massive
expansion

3. But in the year 2006 Starbucks chairman and former CEO Howard Schultz knew something had
gone wrong as he visited hundreds of his stores around the world the entrepreneurial merchant
in him found that something is missing in the Starbucks brand. The stores were lacking a certain
soul and the performance had become lackluster. The first step what he took is he came back as
the CEO and engaged in a company wide effort to change the corporate culture to bring back
the old culture. All the stores were closed for single afternoon as part of training 135000
baristas. The mission was quality control to make the coffee to emphasize the quality over speed
ran counter to mass production, but the main think the company should maintain its culture.
They brought new lower profile machines so that the customers can see how they making the
coffee. There was a assembly-line production were one coffee will be made one at a time for
each customer and also treating as his old friend with “romance of coffee” .So the efforts
convinced his culture and Starbucks today earns more than 10 billion in annual revenue and
serves more than 50 million customers a week around the globe. . Starbucks is now the largest
coffee house company in the world with 20,891 stores in 64 countries.

4. .
FACTS
Starbucks went from 11 stores in 1987 to 2600 in the year 2000
 Factor leading to the success of the store is the ability to create a unique experience for
customers who wanted to buy its distinct brand of lattes and mochas
After massive expansion in 2006, the former CEO Howard Schultz upon visit of various outlets
found out that some factor very intrinsic to Starbucks’ brand was missing
7000 Starbucks stores were closed for a single afternoon as part of a training effort of 135,000
baristas
Assembly line production was taken out and customers were given an option to see the making
of the product by the baristas
Espresso machines were becoming too conventional and were primarily responsible for loss of
aroma and culture of Starbucks
The measures taken to ensure that every customer should be treated as an old friend and
emphasis on romance with coffee paid off thus increasing sales
PROBLEM STATEMENT
When a company grows very rapidly the changes that occurs may threaten the culture of the
organization.

6. ANALYSIS
1. What factors are most likely to change when a company grows very rapidly, as
Starbucks did? How can these changes threaten the culture of an organization?
When a company grows rapidly the management may not be able to instill the same
values and ethics followed by the base organization which may be the factor that
makes it distinct from the other organizations. If the growth is rapid, we might have to
recruit a large workforce where we won't be able to groom the recruits based on the
organizational culture.
When the recruits are not groomed as per the value of the base organization,
such a situation arises where we see a shift in the culture of the organization thus
leading the company to lose its uniqueness that was once a highlight of the
organization. In the case after the massive expansion the CEO felt that some factor
intrinsic to the brand was missing, the uniqueness they had which attracted the
customer to the shop was lost. Thus rapid growth of any organization may threaten
the culture of the organization.

8. 2. Why might this type of radical change process be easier for Starbucks to implement
than it would be for other companies?
This type of radical change process can be done by a company which has very few
machineries and a small organizational structure. It has been stated in the case that all
7000 Starbucks stores were closed for a single afternoon as part of a training effort of
135,000 baristas which is an activity which can be done only in service sector because
it will cause minimum loss when compared to production sector. The changes that
were done in the case is only feasible in businesses where customer preference and
satisfaction is the sole reason for the success of the firm. Such a radical change
initiative would be very hard to succeed at a firm that emphasizes on speed and
efficiency of service, as it is not of demand in Starbucks such a change was feasible.
The change process carried out in Starbucks will not be successful at a firm that
emphasizes on speed and efficiency of services because he took out the assembly line
production which means that production of the product will take even more time.
Thus this model selected by Schultz's cannot be used elsewhere emphasis is on speed
and efficiency.
3. Would Schultz’s change initiative succeed at a firm that emphasizes speed and
efficiency of service?

10. 4. Explain how Schultz’s efforts to change the Starbucks’ culture fit with the discussion
of culture change in the chapter.
Schultz’s efforts were a manifestation of a planned change process. After getting a
sense of lackluster performance through deteriorating sales Schultz envisaged a
change that needs to be put forth immediately. Being a planned change Schultz
wanted to change their employees’ behavior and service towards their customers. So
he replaced the Espresso coffee vending machines to lower status machines so that
baristas would manually serve beverages to the customers to improve their
satisfaction levels. This change process also makes us conceptualize of Lewin’s three
step model of managing changes in an organization which are Unfreezing, Movement
and Refreezing. The baristas were made to unfreeze themselves off individual
resistance wherein they were asked to stop using Espresso machines and serve coffee
and other beverages personally to consumers. There was a movement phase in that
Starbucks was committed to transform itself from their current state to the desired
and preferable state. They exercised refreezing in the sense they were able to believe
in their new strategies and were determined to carry on with it thereby providing
stability in their operating style