AMN468 | Issues and Crisis Management | A Case Study on Starbucks - US

Step 1: Monitoring

This particular study has focused to identify a severe management issue faced by a well reputed organization due to which organizational image and reputation is highly affected. Starbucks is an US coffee service chain occupying international fame due to their superior quality of services. From the initial journey of their business the organization has targeted premium customers by making the price range high. However, recently it is observed that Starbucks has become in the limelight of their news due to management issues. The service providers and managers are very much biased towards racism. People belonging to indigenous background do not get proper treatment from the management of Starbucks.

Recently one incident has made the organization in the peak of limelight based on which Starbucks’ international glory is immensely affected. It is an allegation from the customers’ end that the service providers tag a racial slur on Latino customer's drinks.In an occasion a person placed an order of chocolate mocha and an iced caramel macchiato. When the barista brought the drink it was tagged as “Beaner” which is a derogatory terms applied for Mexicans of US. However, this kind of biased and racism attitude on half of the management of Starbucks was firmly protected by numerous social media channels as well as electronic and print media channels. This kind of major management issue has seriously left sever impact on the overall image and reputation of the organization. Not only customers the management system of Starbucks is very much biased towards while people. Human resource managers while recruiting the employees prefer to select candidates as per cultural and religious backgrounds rather than focusing on skills and competency.

Step 2: Identification

Among all the management system associated with Starbucks the business experts have faced challenges in human resource management issues. Human resource managers tend to show their biased attitude towards those people who have indigenous backgrounds or racial backgrounds. The workplace never intends to follow diversity management within organization. The employees are restricted to white people. In case of treating customers the service providers tend to show their biased attitude towards racism. Black people never get equal priority and response from the customer service providers. They get delayed services with complete reluctance on behalf of the barista. 

This particular issue has drawn the attention of international customers. The number of service users has been enormously declined due to which the profit margin the organization is highly affected. People belonging to other cultural backgrounds and attitudes have strictly denied using the services of Starbucks due to their biased managerial set up. In addition, people from other religious backgrounds have stopped applying for the post of human resource management. Eventually, the organization lacks talented and skilful people who would be successfully able to retain organizational image. The overall business growth of Starbucks in the realm of beverage industry has received immense negative outcome.

Lifecycle flow is constituted with four major stages which include introduction, growth, maturity and decline. After facing this particular situation the organization has gone to the stage of decline. On one hand, the organization has lost their international glory; on the other hand, the business experts have faced immense challenges running entire business process due to the lack of sufficient profitability. Employees associated with the services are unable to get proper remuneration at the right time due to this business turmoil. The management has faced difficulties to maintain their business sustainability.

Step 3: Prioritization

The product sector of Starbucks is completely safe and secured as they deliver superior quality of products to the customers. In addition, due to their superior quality of products they have already grabbed the attention of international customers. However, the issue that Starbucks have faced in dealing with the customers includes their service quality. After this incident Starbucks had to face its major impact on their business reputation, products, organizational profitability. The rate of sale volume has been decreased immensely. The target customers have become selected. Black people have strictly denied availing the services of Starbucks. Eventually, the organizational profit margin has been decreased due to the lack sales margin. 

This kind of major management issue has seriously left sever impact on the overall image and reputation of the organization. Not only customers the management system of Starbucks is very much biased towards while people. People belonging to other cultural backgrounds and attitudes have strictly denied using the services of Starbucks due to their biased managerial set up. In addition, people from other religious backgrounds have stopped applying for the post of human resource management. Employees associated with the services are unable to get proper remuneration at the right time due to this business turmoil. After this kind of immediate issue some of the major consequences have been raised in the workplace of Starbucks.

• The customers have showed their reluctance in using the services of Starbucks. They have showed their preferences in availing services of other beverage service providers rather than using Starbucks and its services
• The employees have faced immense difficulties in getting their remuneration within stipulated time. The organization failed to afford additional benefits and facilities to the employees.
• The customer service providers associated with Starbucks are comfortable in business official language. As a result, the people belonging to other cultural backgrounds and attitudes could not get effective response from the service providers due to lack of multi-lingual competency.

However, this very specific study has focused to make in-depth overview on how Starbucks had to face immense challenges in running their brand image and identity after large number of stores got shut down.

Step 4: Analysis

Before analysing this kind of issue an effective SWOT analysis is conducted for evaluating the strengths, weakness, opportunities and strengths of the organization.

However, after the entire evaluation about this situation, it can be analyzed that this kind of major management issue has seriously left sever impact on the overall image and reputation of the organization. Not only customers the management system of Starbucks is very much biased towards while people. People belonging to other cultural backgrounds and attitudes have strictly denied using the services of Starbucks due to their biased managerial set up. In addition, people from other religious backgrounds have stopped applying for the post of human resource management. Employees associated with the services are unable to get proper remuneration at the right time due to this business turmoil. People belonging to other cultural backgrounds and attitudes have strictly denied using the services of Starbucks due to their biased managerial set up. In addition, people from other religious backgrounds have stopped applying for the post of human resource management.

The rate of sale volume has been decreased immensely. The target customers have become selected. Black people have strictly denied availing the services of Starbucks. Eventually, the organizational profit margin has been decreased due to the lack sales margin.The organization failed to afford additional benefits and facilities to the employees. The customer service providers associated with Starbucks are comfortable in business official language. As a result, the people belonging to other cultural backgrounds and attitudes could not get effective response from the service providers due to lack of multi-lingual competency. However, in order to overcome this kind of situation, the business experts of Starbucks would have to decide in taking effective strategic decision in the next part.

Step 5: Strategy decision

The strategic decisions that should be taken in order to overcome this static situation are as follow:

• The business experts would have to identify the target customers which belong to various cultural backgrounds and attitudes
• Implement more resources to satisfy the needs and demands of various customers. Customers service providers should have multi-lingual flexibility
• The organization would have to render their product diversity to attract the people of various cultural backgrounds and psychological attitudes
• Make a communication plan and strategy for interacting with the target customers 

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