MGMT201: Starbucks Planning Organizing Leading and Controlling Most Starbucks stores now have racks displaying about 20 CDs: Principles of Management Assignment, SUSS, Singapore

Starbucks Planning Organizing Leading and Controlling Most Starbucks stores now have racks displaying about 20 CDs. Reports suggest that when Starbucks decides to carry a CD, it typically ranks among the top four retailers selling it. The interesting thing about Starbucks’ entry into music retailing is that it was not the result of a formal planning process.

The company’s journey into music retailing started in the late 1980s when Tim Jones, then the manager of Starbucks’ store in Seattle’s University Village, started to bring his own tapes of music compilations into the store to play. Soon Jones was getting requests for copies from customers. Jones told this to Starbucks’ CEO Howard Schultz and suggested that Starbucks start to sell its own music. In other words, Jones was strategizing.

At first, Schultz was skeptical, but after repeated lobbying by Jones he eventually took up the suggestion. Today Starbucks not only sells CDs; it is also moving into music downloading with its Hear Music Starbucks stores, where customers can listen to music from Starbucks’ 200,000-song online music library while sipping their coffee and burning their own CDs.

Starbucks’ strategy to enter the music retailing business emerged from the grassroots of the organization in the absence of planning. It was the result of strategizing by an individual store manager, and only after some time was the strategy adopted by senior managers. As we will see later, a strategy often develops in this way. Managers at all levels in an organization spend a lot of time strategizing. It is an important aspect of their jobs.

Sometimes they do this as part of a formal planning process, but strategic thinking also goes on without planning. This is not to belittle the importance of planning, which has an important role in organizations. However, strategizing is more than just planning—it involves constantly thinking through strategic alternatives.