CASE STUDY 1 BUSINESS PROCESSES

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Canadore College *

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MGT 105

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Management

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Jun 5, 2024

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Case Study 1 Student Name:- Geetkamal Kaur Student Id:- A00172816 Course Name:- MGT 101-201 Adv Business Processes Submitted To:- Prof. Sagun Raheja Q1. What factors accounted for the extraordinary success of Starbucks in the early 1990s? What was so compelling about its value proposition? Several elements had a part in Starbucks' phenomenal success in the early 1990s: Excellent Coffee Experience: Starbucks positioned itself as an industry leader in coffee quality, providing a superior coffee experience that went above and beyond what other coffee shops usually offered. Third Place Concept: Starbucks positioned itself as a "third place"—a location where individuals could unwind, mingle, and take in the distinctive atmosphere—between their homes and places of employment. This struck a chord with customers looking for a cosy and friendly setting. Coffee Culture and Rituals: By introducing customers to a range of coffee beans, brewing techniques, and exotic-sounding concoctions, Starbucks contributed to the popularisation of coffee culture. A growing percentage of customers who were interested in coffee as a cultural and lifestyle choice found this appealing. Expansion and Accessibility : Starbucks' stores have been carefully expanded to enhance accessibility in a range of places, such as high-traffic areas, suburbs, and metropolitan centres. Many people's everyday routines now include the brand because of its ubiquitous availability. Brand Image and Consistency : Starbucks has established a robust and steady brand image by prioritising principles like as excellence, eco-friendliness, and communal involvement. The establishment of a dependable and trustworthy brand was facilitated by the uniformity of its offerings and ambience in many places. Innovation: Starbucks is known for its innovative offers, which include the ability to customise drinks, seasonal menu items, and the introduction of non-coffee goods like pastries. Customers found the cuisine to be interesting and fresh because of the ongoing innovation.

Q2. Why have Starbuck's customer satisfaction scores declined? Has the company’s service declined, or is it directly measuring satisfaction the wrong way? The decline in Starbucks' customer satisfaction scores can be attributed to various factors: Dilution of Brand Essence: It appears from the leaked internal document that Howard Schultz, the company's founder, saw that the growth strategy was losing the "soul of the past" and making the stores feel more like a "chain of stores" than unique local businesses. A drop in client satisfaction could have been caused by this diluting of the brand essence. Premium Price vs. Mass Brand : The language implies that Starbucks was trying to charge a premium price for an experience that was no longer unique, despite being a mass brand. Customers may be dissatisfied if they believe that the experience does not justify the premium price. Emphasis on Coffee Quality: Starbucks' recent efforts to revive the quality of its standard beverages and return attention to coffee are mentioned in the text. This implies that there might have been a belief that the coffee's quality had decreased, which might have affected patron satisfaction. Innovation on Its Own Might Not Be Enough: Although Starbucks made an effort to innovate by providing Wi-Fi and producing original music, the text suggests that these actions fell short of solving the core issue. It implies that maintaining or improving consumer satisfaction might have required more than innovation on its own. Distribution and Accessibility: The text makes reference to the notion of reducing distribution in order to reinstate exclusivity. Starbucks may have had a negative impact on consumer satisfaction if its ubiquitous availability led to a feeling that it had become too commonplace or less exclusive. The language is vague about Starbucks' methods for measuring customer happiness. But the idea that the business must deal with the underlying issue raises the possibility that the current approaches may not have been successful in capturing customer mood or expectations. To obtain a more realistic picture of customer happiness, the business might need to review its measures or take into account variables outside of its standard measurement parameters. Q3. How does the Starbucks customer of 2002 differ from the Starbucks customer of 1992? The Starbucks customer evolved between 1992 and 2002 due to several factors: 1992 Starbucks Client:

Enthusiast-Driven: When Starbucks first opened in the early 1990s, its clientele was probably made up more of aficionados of coffee than of people looking for a special, high- end cup of joe. The company was still getting recognition and building its brand. Niche Appeal: Starbucks may have had a more specialized customer base during this period, attracting those who were particularly curious to try out new coffee blends and brewing techniques. Less Mainstream: Starbucks was not as well-known in 1992, and its clientele might have been more a part of a subculture that valued the subtleties of coffee culture. 2002's Top Starbucks Customer: Mainstream Acceptance: Starbucks had gained greater recognition and mainstream status by 2002. It's possible that the clientele has grown beyond lovers of coffee to encompass a wider spectrum of users, such as individuals seeking a hip and communal area. Global and diversified: The 2002 Starbucks client base would probably be more global and diversified, with individuals from a variety of ethnic backgrounds and tastes, as a result of the company's foreign expansion at this time. Established Coffee Culture: By 2002, Starbucks had been a major force in the popularisation of coffee culture. Consumers were increasingly used to a wide range of speciality drinks, coffee, and an overall coffee-focused way of life. Pervasive Presence: Due to its easy accessibility, Starbucks has been ingrained in many customers' daily routines, which has helped to broaden the customer base to include more regular coffee drinkers. In conclusion, the 1992 Starbucks customer was probably more focused on a specific niche and motivated by a love of fine coffee, but the 2002 Starbucks consumer was part of a larger, more mainstream demographic that had been impacted by the brand's international growth and the popularisation of coffee culture.

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