Starbucks Green Policy Harvard Case Solution & Analysis

Starbucks Green Policy Case Study Solution

Reason for implementing greenhouse policy

The Starbucks has decided to invest in the project as a part of its social responsibility. The social strategy of Starbucks is based on three pillars i.e. ethical sourcing, environment and community. Star buck initiated the green house policy to bring a positive change in the way the community and businesses operates. With this initiative, the company will able to maintain and support its image as a supporter of social and environmental issues. The company will also be able to create a positive image in the mind of the consumers resulting in less turnover as the employees themselves become the advocate of the company’s image. (murphy, 2017)

In addition to this, the climate change is unfavorable to the coffee industry and will have devastating effects of the growth of the coffee bean. Therefore Starbucks as the largest seller of coffee around the globe has to pay an attention to the issue and should come up with the solutions to the number of issues. The global emission needs to be reduced by a significant margin as it can negatively impact affect the area used for coffee production by 2050.  Currently almost 27 million acres of land is being used for coffee farming, but as per the report it is expected to decrease up to half of the current production which has increased the pressure on the suppliers and has become a major threat for the coffee industry in the following decades. So Starbucks as a global leader of retail sales in coffee will be highly affected by this change. This threat and the predicted decrease in the supply of coffee has motivated Starbucks to adopt such polices that can help the company in securing the future of the company.

Apart from realizing the dire need for implementing the greenhouse policy and its contribution and effect on the growth of their business, Starbucks is also a strong supporter of climate initiatives and has been playing a major role to make this world a better place and to reduce the overall wastage being created by their business. But if these problems keeps on prevailing and no appropriate measures will be taken to resolve the growing concerns then the situation will become more worst over time and then the shortages will eventually affect the end consumer in the form of increased prices.

Furthermore the building of the green house store will not only fulfil the social responsibility of the company but it will also benefit the company by reducing the unnecessary cost. The framework, the company is planning to implement will help the company to save $50 million on their utilities in the coming decades. In addition to this, the policy will help the company to increase the water saving up to 30%. Along with it, the company is also working with its partners to invest more in the purchasing of locally produce renewable energy. This will help in ensuring the reach to clean water in areas growing coffee that will help in maintaining the fertility of the land on which the farming of coffee is done and will eventually help in maintaining the its  continuous supply. (anzilotti, 2018)

Challenges for implanting a green policy

Due to the climatic change and unethical practices, the coffee industry is facing multiple challenges which have increased the challenges for Starbucks. Though Starbucks has always been a strong supporter of climate initiative and has taken various majors to prevent the environment from being furthermore affected. But however the company is still struggling in reducing its own emission. In 2008, the company came up with a goal to reduce its consumption of energy by 25%. But instead of reducing its emission by the percentage that was set by the company, it actually increased due to an increase in the number of stores owned by the company and because of the expansion in the product lines that incorporate heated food which requires a lot more energy than others. The company had to choose between the profits and the practices it is preaching since it was established. Currently the company can’t be viewed as a leader when it come to the climatic change. Although the company has made a lot of efforts in reducing its footprints but ultimately, Starbucks being a public traded company aims to achieve profit maximization. (Clark, 2016)

Furthermore Starbucks stores lack the recycling infrastructure for its customers while it consumes billions of cups annually that are made of disposable paper regardless of where the beverage is being consumed. Although the cups used by Starbucks contain 10 percent recycled content that has helped in saving ten thousand tress and water by half a million gallons but the downside of the cups used by the company is that it cannot be processed under many of the recycling systems. It is mainly due to the use of polyethylene plastic coating that prevents the liquids from leaking out and makes it more challenging to recycle it because the plastic attached to the paper is not easy to be separated. Therefore due to the use of plastic and lack of proper recycling infrastructure for the processing of these cups, most of them end up a landfill. (Schot, 2010)

Despite of the various practices it is not easy for Starbucks to completely switch to a compos table cup as there are many products available in the market names as green or compos table but are actually not. Number of attempts has been made to come with a product that can replicate the plastic and is yet be compos table but no successful attempt has been made.

Moreover if Starbucks become successful in introducing the perfectly recyclable cup than another issue that will be encountered will be to ensure that customers are disposing the cup appropriately which means that the responsibility is not only on the company but in order to make the policy turn out to be beneficial the consumers also had to play their part.

Coffee shops are more over dependent upon the significant amount of consumption of fossil fuels and the use of natural resources. Most of the outlets of Starbucks stores are located in the areas where the coffee is not being cultivated. Therefore the coffee has to be transported in more than 47 countries that requires and extensive network comprises of power and heat needed in the stores. However as a solution to these issue and to reduce the energy use by almost 25% Starbucks has collaborated with the US green building council in order to create a prototype for a LEED certified store which later on can be replicated across different store. These practices will allow the company to utilize the principles of green building in a cost effective manner but however the company will face a challenge that will limit the practices to a specific locations as one climate or setting might be ideal for a particular location but unfavorable for other making it challenging for the company to implement the same practices in all of it stores located in different areas and region. (ROSENBERG, 2018)

The company’s plan to double the amount of recycled material in their cups and to provide access to their customers to the recycling of the cups while providing their customers an incentive to prefer the reusable cup over the disposable one is a great initiative being taken by the company. However to come up with a recyclable cut that is aligned with the safety requirements and meet the stated quality standards is so far the most challenging task  and requires ambitious efforts. Because creating a cup that is plant based, environmentally sustainable and yet it is commercially viable is not an easy job.

Starbucks is always identifying different ways to improve the environmental performance of their stores, it has incorporated various materials and techniques into their store designs that can help saving the energy and water. Since 2001, Starbucks along with USGBC is trying to come up with a system to certify retail stores. As this will be a huge opportunity for both retailers and USGBC.  Because traditionally, the LEED certification accomplished one building at a time which makes it difficult for the retailers having numerous stores to participate.

Furthermore, the implementation of eco-friendly practices might force the company to train the employees and workers accordingly, creating burden on company’s budget. Hiring environmental experts would be of immense importance, keeping in mind that the

Environmental policies must not be a hindrance on company’s earnings. A pool of eco friendly economists can be a hectic job and it might also increase the company’s wage expenses. China made its environmental regulation in accordance with Environmental Protection Law, 1989. Even if the companies do comply with the laws, there is not a proper infrastructure background to support implementation of environmental regulations.

Ways to enhance the effectiveness of the projects

Undoubtedly Starbucks has carried out a lot of effort to improve the overall environmental condition by improving the practices and the performance of the stores. As a public traded company Starbucks also faces a pressure from its shareholder to maximize the profit while reducing its environmental footprints. In order to form a balance and to enhance the effectiveness of the projects the company need to recognize all the products that are responsible for increase emission and then it should develop an action plan as how the company can minimize its usage and it should build its new stores upon such structure that will help the company in minimizing the usage of water and energy. (Lozanova)

Apart of that, the company should establish proper recycle infrastructures so that it can widely promote the use of recycle cups. In order to make the project effective; the consumers also need to be educated regarding the need of the eco friendly infrastructure and utensils that can minimize the pollution that is being created in the environment. The collective efforts by the company along with its consumer can only transform the way business are being operated.

In order to make the consumer habitual of the green initiative, Starbucks should initially provide its customer the initiative to use the cups that are reusable and the easy access to recycling by establishing local infrastructure for it. In addition to this Starbucks should form strategic partnership with companies that are willing to create a better environment and is interested in the framework that is being implemented by Starbucks. This will help the company in enhancing the effectiveness of the project by the increased rate of adaptation that will create a major impact and will attract many other companies toward the replication of the framework.

As it is difficult for the company to completely shift its usage from disposable to the reusable cups, because there are many products available in the market names as green or compos table but are actually not. It is not an easy task to come up with a product that can replicate the plastic and at the same time it should meet the quality stands.  Therefore the company should collaborate with the companies having sufficient experience in the recyclable business to create the desired cup that should be reusable and cost effective. So that companies who are willing to replicate the green model could easily do it without any major investments. (Houck, 2018)

Conclusion

In summation, Starbucks has been missioner and committed to create a positive change. It offers  an exceptional high quality product, and open greener stores. The company has realized the significance of the agriculture in their business, thus adapting a comprehensive approach for reducing the impact on environment through reviewing all the relevant aspect of business, so identify number of solution to come with reliable and meaningful change. The company has applied LEED standards to all of its new and current stores for the purpose of making sure that the stores are well build, maintained and designed on a broader range of the environmental objectives. Besides, the company has contemplated to increase the recycling in order to meet the customer requirements through reusable cup promotion and reducing waste coming from cups and their packaging.  The company has taken initiative of energy and water conservation, renewable energy, greener cups, support community and farmers, and waste diversion. Moreover various steps has been taken by the company to address the change occurring in the climate, as environment has great impact of farming.  As part of the implementation plan of the green business policy, an accredited program is supposed to be carried out by company in following year to audit all the operating stores that are situated in US and Canada against the criteria that has been set. The framework designed to implement the Starbucks greener stores plan will benefit the company by saving a huge amount in utilities i.e. $50 million over the period of 10 years. The Starbucks stores with LEED certifications will reduce the construction waste up to 60 percent and need less energy and water to operate efficiently. Also, a company has pondered designing and building stores that would ultimately help in saving greater cost thus reducing impact. The star buck decided to invest in the project as a part of its social responsibility. The social strategy of Starbucks is based on the three pillars i.e. ethical sourcing, environment and community. Due to this initiative, the company would most likely be able to support as well as maintain its market image as a support of environmental and social issues. In such way, the company would be able to create a positive image amongst customers that would result in low employee turnover because employee would become advocate of the image of company. In addition, The Company has planned to double the amount of recycled material in their cups and to provide access to their customers to the recycling of the cups while providing their customers an incentive to prefer the reusable cup over the disposable one is a great initiative being taken by the company. Starbucks is always identifying ways to improve the environmental performance of their stores, they have incorporated various materials and techniques into their store designs that can help saving the energy and water. As such, the company has been continuing the strategies for addressing challenges as well as helping farmers to mitigate the climate change effect on their farms and to decrease the environmental footprints of the company’ business operations, and to access to the green water in communities where coffee grows.  In short, the company has been heavily involved in a sustainability initiatives so that it will the potential to become environmental friendly............

 

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