This paper analyzes how the sustainability strategy of Starbucks is better than the sustainability strategy of Walmart. Sustainability partly means to have “a positive impact on people and planet” while “delivering profitable growth too” as stated by Fisk (2011). Starbucks is better in its approach to sustainability in three ways: its use of partnership and certification, more initiative in its sustainability strategy, better profit because of its investment in its employees. Analysis Starbucks and Walmart each have a comprehensive plan for sustainability.
Analyzing both Starbucks and Walmarts approach to sustainability, I believe Starbucks’ approach to sustainability is better than Walmarts’ approach in part to three factors. Firstly, Starbucks makes more use of partnership and obtaining certification from 3rd party organizations. Secondly, Starbucks takes more initiative in its sustainability policy than Walmart. Lastly, Starbucks is in better position to profit because invests more in its employees to provide better customer service. Use of Partnership and Obtaining Certifications
Starbucks use of partnerships and obtaining certifications is one reason their sustainability strategy is better than Walmarts. Starbucks has collaborated with Conservation International to develop Starbucks’ ethical sourcing guideline (Global Responsibility Report Goals & Progress, 2012). Also, Starbucks has been working with the U. S. Green Building Council (USGBC) to build LEED® certified stores. While Walmart does have partnerships and does use third party certifications, Walmarts’ partners and third party certifications lack the reliability and credibility in comparison to Starbucks’ partners and third party certifications.
As Senge, Smith, Kruschwitz, Laur, Schley (2008) state, “Traditionally, leading activist non-governmental organizations (NGOs) have been far more likely to attack than work with huge global corporations. ” A third party organization most likely has more stringent guidelines than a company’s own guideline. It takes a bit of courage to allow a third party to delegate how Starbucks will fulfill their responsibility to the planet in addition to fulfilling their obligation to customers and shareholders.
The fact that Starbucks can reach out, work with, and conform to Conservation International and USGBC standards makes them preferable model than Walmart’s model. Taking Initiative The Starbucks’ model takes more initiative in its approach to sustainability than Walmart’s model. By taking an initiative, Starbucks doesn’t rest on its laurels. Starbucks rejects “many of the conventions and conveniences of business that created past success” Fisk (2011). Instead, Starbucks looks to future by “taking new perspective, finding new solutions, and even finding new measure of performance” Fisk (2011).
By having a different and new perspective, Starbucks has some firsts in the industry in regards to sustainability and its employees. For example, in 2008 Starbucks says it launched the first hot beverage paper cup with 10% post-consumer recycled fiber (Recycling & Reducing Waste, 2012). Even more striking, according to Hoover’s Inc (2012), in 1991 Starbucks was the nation’s first privately owned company to offer stock options to all employees. To be the first in using a hot beverage paper cup with 10% recycled fiber is definitely taking a new perspective on sustainability and raises the bar for Starbucks and its competitors.
An example of new ways to measure performance, social responsibility reports introduced by Starbucks started in 2001 while Walmart did not have some form of social responsibility reports until 2005 (Global Responsibility Report Goals & Progress, 2012; Global Responsibility Report, 2012). More Profit by Better Customer Service Starbucks is better positioned to grow their profit because of their investment in people which has created better customer service and allows them to charge a higher premium.
Therefore, Starbucks will better prepared when sustainability growth will be “less about volume, more about profit; less materialistic production and more about supportive services” Fist (2011). Starbucks is not only about coffee it is about an “experience”. That “experience” comes from an interaction with a Starbucks employee. When a customer has a positive “experience” it will bring customers back and make customers less price sensitive which will grow Starbucks’ profit. It is not by chance that Starbucks has good customer service.
Duhigg (2012) mentions that Starbucks provides training courses for their employees teaching them how to respond to difficult situations. Starbucks benefits with this training because their employees are able to deliver consistent and positive customer service to its customers. My experiences with Walmart’s customer service has never been exceptional and at times been frustrating. Walmart competes in its industry mainly on price and has low profit margins and never creates an “experience”. The Starbucks model with its investment in its people is a good sustainability strategy.
Conclusion Both Starbucks and Walmart are committed to being globally responsible companies. In my analysis, I believe Starbucks has a better sustainability program. Starbucks makes use of partnerships and obtains third party certifications. It takes more of an initiative with policies towards sustainability. Finally, Starbucks is in a better position to grow its profits because invests in its employees. References Duhigg, Charles. (2012). The power of habit: Why we do what we d in life and business. New York, NY: Random House. Fisk, Peter. (2011). People Planet Profit.
Retrieved from http://www. peopleandplanetandprofit. com/ Hoover’s Inc. (2012, November 13). Starbucks Corporation. Hoover’s Company Records – Quick Report. Retrieved January 11, 2013 from Lexis Nexis Academic database. Global Responsibility Report (2013). Retrieved from http://corporate. walmart. com/global-responsibility/environment-sustainability/global-responsibility-report Global Responsibility Report Goals & Progress. (2012). Retrieved from http://www. starbucks. com/responsibility/global-report Recycling & Reducing Waste at Starbucks. (2012). Retrieved from http://www. starbucks. om/responsibility/environment/recycling Senge, P. , Smith, B. , Kruschwitz, N. Laur, J. & Schley, S. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. New York, NY. Broadway Business Publishing. In Text Document on Corporate Web Site Starbucks encourges employees, called partners, to volunteer for community service projects. In 2008 Starbucks partners spend 246,000 hours in community service (Community involvement, 2009) Reference List-Document on Corporate Web Site Community involvement at Starbucks. (2009).
Retrieved from http://www. starbucks. com/sharedplanet/communityInvolvement. aspx Hoover’s Inc. (2012, November 13). Starbucks Corporation. Hoover’s Company Records – Quick Report. Retrieved January 11, 2013 from Lexis Nexis Academic database. In 1991 it became the nation’s first privately owned company to offer stock options to all employees. Starbucks was one of the first national retailers to jump on the Wi-Fi bandwagon, teaming with Hewlett-Packard and Deutsche Telekom’s T-Mobile unit to offer high-speed wireless Internet access at 1,200 of its locations in the US, London, and Berlin. ttp://jobs. aol. com/articles/2012/09/21/starbucks-is-hiring-health-plan-good-coffee-but-watch-out-for/ I had a friend who worked at Starbucks part time partially because of its health insurance while on the side he was doing personal training with clients. Even more striking is that, in 1991 Starbucks was the nation’s first owned company to offer stock options to all employees. While they may not pay that much, being able to brag about getting stock options is pretty neat. In comparison to Walmart, Starbucks does a commendable job with benefits for its part time “partners” (employees).
Starbucks provides full health insurance for part-time “partners” where part-time is definied as a minimum of 20 hours a week or 240 hours a quarter. On the other hand Walmart, had offered health insurance to part time workers defined as working 24 hours a week at minimum but has since stopped offering health insurance to those workers. When there are many companies that don’t provide health care at all for full time employees, to provide health insurance for even part-time “partners” makes Starbucks standout. By providing health insurance for an employee, it gives the employee security that they will be taken of if they get sick or injured.
Another benefit of being a Starbucks partner, is Starbucks provides training courses for their employees. In addition these training courses are eligible for college credit. The story of Travis and how Starbucks helped him achieve some structure in his life but teaching him self-discipline was one of the most memorable chapters in The Power of Habit. While I’m sure it’s more the exception that Starbucks has that kind of profound effect on one’s life, I do believe that Starbucks focus teaching self-discipline has a positive impact on their employees.
Of course, Starbucks benefits when their employees are able to deliver consistent positive customer service to its customers. I’ve worked a couple entry level jobs and neither of the jobs involved any extensive training. Starbucks on the other hand, will role play and practice with their employees on how to handle difficult situation and coincidently self-discipline. This kind of life lesson can be invaluable for most individuals. Individual Assignment #1: Two Models: Starbucks & Walmart & Different Approaches to Sustainability Analyze the sustainability strategy of Starbucks and Walmart.
Compare and contrast the mission, values and core competencies of these companies. Explain how these two corporations have different systemic approaches to sustainability. Give three reasons why you support one business model over the other (you must choose) and weave in at least three concepts from other sources, especially the texts and Websites from this course (using APA and citations) to support your conclusion. See details in Week 1 Documents, “How to write a short paper. ” See further information in this document for rubric and grading criteria all assignments.