Starbucks and Its Approach to Social Impact

Starbucks is one of the world's most famous companies, and in this case study, we want to discuss the Starbucks and its approach to social impact.

Starbucks is the name of a coffee chain in the United States. It was founded in 1971 and is the world's largest coffee chain with its headquarters in Seattle, Washington. Its retail products include more than 30 of the world's top coffee beans. Hand-made espresso and many coffee-cold and hot drinks, fresh and delicious pastry foods, a variety of coffee machines, coffee cups and other products. Starbucks has nearly 21,300 stores worldwide in North, South America, Europe, etc. The Middle East and the Pacific. For current years, with the global expansion strategy, Starbucks goes to more and more cities and countries, it uses its own way to change people’s way of life.  

Starbucks always concerns its social responsibility. Starbucks maintains a sustained strategic partnership with Conservation International, Feeding America and hundreds of community service partners in the world, which enable Starbucks to make good use of their business scale and fulfilling social obligations.  

From the article “Greener Cups” we can see that Starbuck committed to recycle their products wastes, but it is not a simply process. It need the local municipalities, landlords, customers, baristas, and even adjacent businesses all have to work together to make it a success. This time, in our case study, we want to discuss the recovery and utilization of the day-old pastries and coffee ground in Starbucks.

Firstly, we discuss the day-old pastries disposal. There are four options we can select:  discard in trash, donate them to local homeless shelters and other charitable organization; sell them with discount and process them into succinic acid. Let's analyze it separately.

The first option that the Starbucks can just discard them in trash. From this way, Starbucks will not get any revenue, and no cost reduction. Because if Starbucks discard them, that means Starbucks just waste their products without any income. Also, the cost of garbage disposal will incur, and it will make the cost increase. Before Starbucks choose this option, they just need to consider about how to deal with the rubbish without pollution.  This is the simplest way to deal with the day-old pastries, but it will not get any benefits for Starbucks.

The second option is donating the day-old pastries to local homeless shelters and other charitable organization.  From this way, Starbucks will not get any book income, but them will get the social reputation, and this social reputation is a kind of intangible asset. It will help Starbucks get more acceptance from the society. This way will reduce the cost of rubbish disposal, and maybe incur some transportation cost. If Starbucks want to choose this option, they need to pay more attention on the food safety, because the pastries they give to homeless are the products they couldn’t sell on the day-time, so the food safety is very important. Starbucks need to make sure the pastries is still edible before give them to homeless. This option will give Starbucks enough social reputation, but the disadvantage is same with the option one, that they waste their products without any book income.

The third option is sell the day-old pastries in its retail stores for 50% off. This option will make Starbucks gain half of the income compare with the option 1 and 2, and it will reduce the cost of rubbish disposal and transportation. It will incur no extra cost in this option, and also because these pastries are still goods, Starbucks need to careful about the food safety when it close to shelf time. The advantage of this option is Starbuck will not loss all the income with these pastries, and no disadvantage for this option.

The last option is process the day-old pastries into succinic acid and sell the succinic acid to manufacturers or labs. This option will make Starbucks get extra revenue for the succinic acid without loss the income like option 1 and 2, and it will reduce the cost of rubbish disposal. Starbucks still need to pay for transportation cost and the production cost with the pastries to succinic acid. Before chose this option, Starbucks just need to make sure that they can handle the manufacturing operation with the pastries to succinic acid is enough. This option will give Starbucks the extra income as advantage, they will not waste their expired products, and the disadvantage is they need to have a production line to change the pastries to the succinic acid.

In my opinions, these four options I’m most attractive the second one. Because I think the social reputation is a very valuable intangible asset. Although Starbucks loss the income of these pastries, compare with the full-day income, this part of loss will influence nothing, and they can get the social identity from this loss. I think this is a good deal.  And I’m least attractive the option one, because the option 1 get nothing but still need to pay for the rubbish disposal cost.

Secondly, we discuss the coffee grounds disposal option. There are also four options; discard in trash, give coffee grounds to customers through a program for gardening, sell coffee grounds to commercial composters, and process them into succinic acid and sell them.