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Starbucks Crisis Management Analysis 2018

In April 2018, Starbucks faced a crisis when two black men were arrested in a Philadelphia store for waiting without making a purchase, leading to public outrage and accusations of racial discrimination. The company responded by implementing diversity training for employees and closing 8,000 locations for training, while also engaging with the affected individuals and addressing the incident publicly. Key takeaways from the analysis highlight the importance of transparency, timely action, and cultural diversity in crisis management.

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Muhammad Usman
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32 views11 pages

Starbucks Crisis Management Analysis 2018

In April 2018, Starbucks faced a crisis when two black men were arrested in a Philadelphia store for waiting without making a purchase, leading to public outrage and accusations of racial discrimination. The company responded by implementing diversity training for employees and closing 8,000 locations for training, while also engaging with the affected individuals and addressing the incident publicly. Key takeaways from the analysis highlight the importance of transparency, timely action, and cultural diversity in crisis management.

Uploaded by

Muhammad Usman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

STARBUCKS:

CRISIS
MANAGEMENT
ANALYSIS
REPORT 2018

Presented by:
MUHAMMAD USMAN (210301050)
AKSHAY KUMAR
BACKGROUND OF THE
CRISIS
•In April 2018, a Starbucks employee in Philadelphia called 911 on
two dark-skinned men who were waiting for a meeting without
placing an order.
•The incident sparked outrage and protests, leading to
investigations into racial bias.
•The men were waiting for a real estate investor for a meeting.
•Arrested and escorted out of the coffee house.
PUBLIC RESPONCE
•Starbucks faced public backlash and accusations of racial
discrimination.
•Calls for boycotts and protests erupted nationwide.
•Starbucks responded by implementing diversity training programs
•Despite investigations, no immediate action was taken against the
store manager.
•Protests escalated, demanding accountability.
•Manager eventually quit voluntarily after four days of protests.
BACKGROUND OF CRISIS
INITIAL RESPONSE
•CEO Kevin Johnson apologized to the two men who were arrested.
•No mention of racial discrimination or action against the store
manager.
•Starbucks engaged in the police-led investigation, distancing itself
from immediate responsibility.
SECOND RESPONSE
•Starbucks announced the closure of 8000 locations on May 29,
2018, for employee training.
•Training session for 175,000 employees aimed at addressing racial
bias.
•CEO Kevin Johnson released a video statement and scheduled
media interviews to discuss the situation and action plan.
THIRD RESPONSE
•Executive Chairman Howard Schultz expressed shame over the
incident in an interview with CBS.
•More members of the executive team conveyed regrets through
various media platforms.
•Starbucks presented a unified front, utilizing digital, mass, and
social media to communicate their regrets and action plan.
•CEO met with the two men arrested, offering to cover their tuition
at Arizona State University.
FOURTH RESPONCE
•On May 29, over 8000 Starbucks locations closed for four-hour
training sessions.
•Starbucks suffered a loss of $16.7 Million in retail sales.
•The company received global applause for its proactive response to
the incidents.
ANALYSIS
Transparency
Initial Response: Action plan and
Responsibility:
• Insufficient apology • Closure of 8000 • Honest and genuine
received massive locations for response to the
criticism. employee training. crisis.
• Starbucks faced • Starbucks took • Starbucks
backlash from responsibility and maintained trust by
customers and the developed a strong responding
community. action planning. honestly to
questions.
KEY TAKEAWAYS

Planning Timeliness

Transparent
Cultural
and open to
diversity
criticism

Communicati
on
REFERENCE
 Astley, Graham. “Structural Sources of Intraorganizational: Power: A
Theoretical Synthesis.” Academy of Management | Home, 1 Jan. 1984,
journals.aom.org/doi/10.5465/amr.1984.4278071.
 Czarnecki, Sean. “Timeline of a Crisis: Starbucks' Racial Bias Training.” PR
Week, July 6, 2018
www.prweek.com/article/1486260/timeline-crisis-starbucks-racial-bias-training.
 “Black Men Arrested at Philadelphia Starbucks Feared for Their Lives.” The
Guardian, Guardian News and Media, 19 Apr. 2018,
www.theguardian.com/business/2018/apr/19/starbucks-black-men-feared-for-liv
es-philadelphia
.
 “Starbucks: Revenue Worldwide by Region 2018 | Statistic.” Statista, Statista,
2018, www.statista.com/statistics/572306/net-revenue-of-the-starbucks-by-
region-worldwide/.

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