Starbuck Case Study Analysis

In addition to the trade-offs Howard Schultz and Starbucks made. Another consists of the company’s management deciding to invest a significant amount of capital to provide the highest quality coffee products for their customers. Providing quality coffee requires extreme dedication and

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

Starbucks is known for their Frappuccino’s; unfortunately they are on a downward spiral in sales due to competitors such as McDonalds. In 2008 Starbucks admits to its losses due to their competitors. “Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant’s missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills (Linn).”

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.

It was believed that there was a service gap between Starbucks scores on key attributes and customer satisfaction. Furthermore, according to a poll, the speed of service delivery was the biggest concerns of customers. Overall, customers are pleased with the cleanliness, atmosphere, and product quality. However, the main problem was that waiting time was steadily increasing. I believe this one of the factors that caused the decline in satisfaction.

This assignment is based on the Starbucks case study; Trouble Brews at Starbucks written by Lauranne Buchanan and Carolyn Simmons (2009). The aim of this paper will be to discuss the the changing consumer experience, competitive landscape and external circumstances affecting marketing opportunities for Starbucks, while determining how Howard Schultz can provide Starbuck’s customers a greater long-term value.

ticket size) X (4.4 customer life years)] $921.78. Calculating sales amount for the highly satisfied customer using the same method shows an amount of [(7.2 visits/mo) X (12 months) X ($4.42 avg. ticket size) X (8.3 customer life years)] $3,169.67. The sales figure for the highly satisfied customer is nearly three and a half times as much as the satisfied customer. This is why it is very important for Starbucks to figure out how to provide more customer satisfaction. The company needs to do research to find out if quality of service has actually declined. There is always the societal perception that a large mega brand is incapable of delivering customer intimacy. This perception is not necessarily a foregone conclusion. It’s just a matter of Starbucks collecting accurate information regarding both quality and quantity of its customer service. The company needs to take a look at itself and determine if its customer service strategy had changed from 1992 to 2002. This is an era indicative of the massive growth. Starbucks needs to answer the question, “Did we lose our focus on customer service quality by concentrating too much on opening more stores?”.

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

Starbucks faces a difficult and controversial management challenge. The company’s most recent market research has revealed unexpected findings implicating that Starbuck is not always meeting customer’s expectations in the area of customer satisfaction. The purpose of this memo is to analyze and provide recommendation on whether or not the company should go forth with a $40 million investment in additional labor in the stores. This $40 million investment is necessary in order to bring service time down to a three-minute interval and ultimately increase customer satisfaction. A marketing strategy and corresponding recommendation will be provided for your approval.

Customers: The demographics of a usual Starbucks consumer have altered extremely in the new years. In the Starbucks case documents innovative consumers of Starbucks are younger, a smaller amount knowledgeable, low pay, less frequent visited to the coffeehouse and had very dissimilar insights. The general outlook of Starbucks is very short on 25% by novel consumers while the consistent consumers stood in 44%.Although numerous features subjective customer satisfaction, generally service and quickness of service were recognized as the greatest significant; a rapid glimpse at Starbucks 's fresh customer satisfaction reveals that consumers did in

Starbucks has discovered that they are not always meeting their customers’ expectations in the area of customer satisfaction. Starbucks has to come up with an action plan to address this issue, considering its significant correlation and impact to sales and profitability.

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

Starbucks provide a large in store seating with free wi fi and a take-out service which only a few retail shops offer. The main target customers for Starbucks are office workers, with enough income, whom are able to afford the high prices of their products (Gaudio, 2003). The company has worked hard to establish itself as the brand leader with its branding as the most frequently drank coffee and noticeable brand logo. Introduction of promotions like the Starbucks Card, allows a more convenient way for a person to
pay for
your
drinks
and
earn
rewards
for
your purchase (Starbucks Coffee Company, 2011).
Furthermore, in‐store
promotions
accompanied
by
new
products and
amenities like free internet use are all strategies that Starbucks use to maintain their position in the market (Vasudha, 2011).

Starbucks is the world’s largest coffee roaster and retailer of specialty coffee in the world. We have enjoyed great dividend returns over the past 5 years, and our growth has been on the rise. We are currently saturating the US market, while the emerging markets of developing countries offer many possibilities for growth and increased revenues. In our US market we should look at offering more items on the menu that complement our long-standing tradition of pleasing our customers. Exotic Juices, and snacks served with the same service could add a nice margin to the bottom line. In addition, the ability to offer a drive through service for the consumer that loves fine coffee but does not have the time to stop

This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.