Starbucks Value Proposition Essay

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1. What factors accounted for Starbucks’ extraordinary success in the early 1990’s? What was so compelling about the Starbucks’ value proposition? What brand image did Starbucks develop during this period? Is the value proposition still valid in 2002? The extraordinary success Starbucks experienced during the early 1990s resulted from Howard Schultz’s passion and vision to create a coffee culture in the United States similar to the coffee culture he experienced while traveling to Italy. Schultz’s vision of the Starbucks brand evolved around providing a quality product while delivering exceptional customer service in an inviting atmosphere. Starbucks’ success can be attributable to the following factors: * Quality Coffee:…show more content…
This new customer base had a different perception of the Starbucks brand and visited the stores less frequently than the original customer base. Additionally with its growth strategy Starbucks seemed to have lost the ability to communicate its values to its customers. Note that Starbucks research team discovered that between 2000 and 2001 there was an increase in customers who felt that Starbucks primarily cared about making money and building more stores. This is an indication that the company lost sight of the components making up its value proposition. Customer service was a major component of Starbucks value proposition but according to the research team by 2002 it discovered that Starbucks was not meeting expectations in terms of customer satisfaction. In fact the data collected by the research team indicated that 10% of customers would like to see improvements in service especially speed of service and 19% would like to have friendlier more attentive staff.

3. How does the Starbucks of 2002 differ from the Starbucks of 1992 and how do these changes influence service and customer needs?

There are a number of differences between the Starbucks of 1992 and the Starbucks of 2002. a. Number of stores: In 1992 the company had about 140 stores in the Northwest and Chicago areas. By 2002 the company had approximately 5,886
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