STARBUCKS: DELIVERING CUSTOMER SERVICE

SITUATIONAL ANALYSIS

STARBUCKS is the world’s largest coffee retailer brand ,its target market sets as well-
educated ,white-collar patrons between the ages of 25 and 44.There are three components
of the brand, live coffee, service and atmosphere. However company is losing its brand
image as it focusing more on its retail expansion than maintaining the service and quality
standards ,it has recently come across a marketing research which revealed that the
company is not meeting the expectations with respect to customer service.

Since its inception the company had taken pride in delivering the best value for money and
maintained a superb customer service standard which lead to the concept of STARBUCKS
being an "experience rather than just another coffee house.It lived up to its claim of
becoming America's "Third Place".

The company was now facing a dilution of brand as an experience.In order to improve on
customer satisfaction the company is giving a thought to a plan which talked of increasing
the amount of labour to speeden the service at oulets.The intent of the expense program is
to decrease the wait time of coffee in hand from the end of line to 3 minutes ,regardless of
the time of the day.This would cost the company $40 million per annum and the company is
unsure of the outcomes in case such a step is taken.

THE QUANDARY

The company is not meeting the expectations in terms of customer satisfaction and is failing
to strike a balance between customer satisfaction and company growth.

STRENGTHS

• starbucks is a global coffee brand known for its high quality standards and
unmatched customer services.
• The company is a reputed employer which values its employees and customers ,all
starbucks employees are called ‘partners’, and it strongly belief that partners
satisfaction leads to customer satisfaction.
• The comany has strong ethical values as metioned in their mission
statement.'Starbucks is committed to a role of environmental leadership in all facets
of our business.'
• Has a Strong product mix
• Customization of drinks
• Highly efficient supply chain
• Company enjoys reliable partnerships with renowned companies
• Constant development of products and creativity

• “Just Say Yes” to customer policy.

• Hard and soft skills training for employees.

WEAKNESSES

• More than three quarter of the business is concentrated in America.There is a great

business risk and the portfolio is not well diversified
• Absence of a proper marketing department
• No advertisement or promotional activities.
• The focus on customization of drinks is costing precious time of the barista
• Making the combination of drinks on the portfolio is a tedious task and requires
training and experience
• There is a decline in customer focus
• The company only focuses on its core competency that is the retailing of
coffee,other sectors have not yet been fully exploited

OPPORTUNITIES

• New services and products can be retailed in the cafes such as coffee time
snacks,cofee making equipment,and seasonal delights
• Starbucks can expand its customer base ,and communicate its value propositions to
the younger market which is open to experience
• Can offer its services to a larger group of coffee enthusiasts belonging from different
backgrounds keeping in view the changing trends
• Can improve on their training programs for the baristas
• Can use their strategic alliances to cut costs and invest in employee acquisition and
training

THREATS

• Cannibilization of the brand due to the presence of too many stores at a single
location
• Threats of new entrants.speacial coffee houses will stive hard to provide the same
quality of coffee at a lower price

• Threats of subsitute products.Other beverage industries can satisfy the need for
drink and food industry for food.
• Starbucks are exposed to rises in the cost of coffee and dairy products.
• Changing Economics trends pose a great threat

RECOMMENDATIONS

• Starbucks should continue to focus on growing its retail specialty coffee business
internally through shops, Kiosks, and mail order loyalty programs.
• They should do the investment in labor and instead of counting it as an expense ,see
it as a customer-oriented investment ,which will give them back customer
satisfaction , loyalty and partner satisfaction .

• Install automated espresso machines at all outlets, which decreased the steps
required to make an espresso beverage and have positive impact on customer’s
personal experience.

• It could benefit from entering into international markets. Consumers in Europe and
Asia are drinking more coffee, and therefore Starbucks could fulfill this demand

• If Starbucks focuses on coffee related new products, such as coffee ice cream and
coffee bottled beverages, it would not risk dilution of its core product.

• It should continue focusing on improving efficiency and effectiveness in the

organisation, from procurement, to supply chain to customer service delivery.