Thursday, December 16, 2010

Starbucks and Crisis Management

Starbucks has been applauded several times for their handling of crisis situations. In 2008, Starbucks faced a crisis with the fall of the economy. They were forced to close 600 locations that were not making enough profit. They were also facing the issue of their customers choosing a cheaper option over their higher coffee prices. Besides offering such deals as the $1 bottomless cup of coffee, Starbucks began a social media campaign to win back customers as well as gain new ones. They created a Twitter, Facebook and a blog page to reach their target audience. They also used it as a way to stay interacted with their current customers, keeping them in mind and involved as well. The campaign offered contests and took suggestions from employees and customers, involving everybody who is a part of the “Starbucks experience.” They also hired a new spokesperson for the campaign, Brad Nelson, whose experience in the social media world helped to make this campaign a success. Nelson’s job required him to stay involved with the community as a face for Starbucks. They also created the “My Starbucks Idea” blog, which gives consumers the opportunity to post ideas they wish to see from Starbucks. These ideas are looked at by the company and possibly chosen to carry out. The blog also shows ideas that have been chosen that they can expect to see at Starbucks.

Another crisis, which Starbucks can be applauded for their actions in crisis management, was when they came under attack in 2001 by the Organic Consumers Association. They Organic Consumers Association used the internet to launch their campaign against Starbucks, attacking them for using genetically engineered products, mainly their milk. The Organic Consumers Association refused to make negotiations or even meet with Starbucks until their demands were met. While monitoring their campaign site,, Starbucks devised their crisis management plan. First, Starbucks’ CEO released a letter discussing the use of genetically produced products. They also alerted their internal community such as their partners and employees. He addressed consumers’ concern for the use of these products and decided that Starbucks would now offer an rBST-free milk option with plans to make all of their milk rBST-free milk if supplies allowed it. They continued their actions to manage the situation. They also gave shareholders the letter as well. They were successful in keeping their good name in this situation by handling the crisis in an informative fashion and being prepared.

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