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Starbucks: Delivering Customer Service

Case Analysis

Marigold Mesina

on 30 January 2013

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Transcript of Starbucks: Delivering Customer Service

Statement of the Problem This study aims to identify possible solutions on how the company could resolve the gaps that exist between customer expectations and what Starbucks delivers, in order to meet customer satisfaction and gain customer loyalty. Objectives To determine if Day’s $40 million proposal could solve Starbucks' dilemma regarding increasing customer satisfaction, since the assumption is that speed of service is the number one driver for satisfaction and that the additional labor will provide the increase of speed of service.
To give recommendations on how Starbucks could meet customer satisfaction and gain customer loyalty while putting emphasis on increasing the company’s sales. 1.Well-established and growing brand recognition
2.Product and brand consistency
3.Valued and motivated employees, good work environment
4.Good relationships with suppliers
5.Industry market leader
6.Wide variety of product offerings
7.Offers free Wi-Fi in stores and a comfortable space for its customers
8.An international brand with more than 5,500 stores around the globe
9.Joint Ventures with other companies such as Pepsi-Cola Dreyer’s Grand Ice Cream.
10.Installation of automated espresso machines which decreased the number of steps required to make espresso beverage. Strengths: STARBUCKS: DELIVERING CUSTOMER SERVICE Case Presentation With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. However, recent research, conducted to Starbucks, have showed some concerns regarding company problem meeting customers’ expectations. To increase customer satisfaction level, Christine Day, the Starbucks senior vice president of administration in North America, suggested a plan to add additional 40 million annually for extra 20 hours of labor per every store. This move should help the company to accomplish lower time of service to three minutes. Summary of the Case 11.Customer Snapshot
12.Constant product innovation
13.Service innovation ( Starbucks’ stored-value card or SVC)14.“Just say Yes” policy Weaknesses: 1.Prices of their products are continually rising, thus risking the loss of customers
2.Customization of beverages – slows down the service process
4.Organizational structure (lacks strategic marketing group)
5.Very little image or product differentiation between Starbucks and the smaller coffee chains
6.Speed of service is one of the main strength of Starbucks is now found to be declining. OPPORTUNITIES 1.Rising coffee consumption. Market’s biggest growth appeared to be among drinkers of specialty coffee
2.Eight states in the U.S. without a single company-operated Starbucks
3.Being far from reaching saturation levels of Starbucks’ stores in many existing markets
4.Continuous retail expansion
5.Starbucks' historical customer profile- the affluent, well educated, white collar female had expanded THREATS 1.Rising competition with specialty coffee shops as well as donut and bagel chains.
2.Bad image of a company caring primarily about making money
3.The newer customers were younger, less educated, in lower income brackets, had less frequent visits, and had a different perception of Starbucks. WO STRATEGIES 1.Concentrate new store openings in areas that would not cannibalize existing sales (W3,O1,O2,O3.O4)

2.Separate serving customers with customized orders from those which will require less time, such as the customer just wanting coffee. Use the more experienced baristas to handle the more complicated orders. (W2, O1,O4,O5)O5)

3.Invest more money in automated espresso machines (W2,W6, O1,O5)

4.Improve the speed of service to less than 3 minutes by increase labor hours (W2,W6, O1,O5) ST STRATEGIES 1.Introduce more customer operated machines to reduce wait time. (S10,T2,T3)
2.Educate poor partners to utilize their soft skills to treat their customer as valuable(S1,S2,S3,S11,S14, T1,T2,T3)
3.Free cup service (S14,T1,T2,T3)
4.Promote SVC more (S13,S14,T1,T2,T3 WT STRATEGIES 1.Advertise more to establish the branding of Starbucks (W5,T2,T3)
2.Establish an internal strategic marketing group (W1,W4,W5,W6,T1,T2,T3)
3.Invest more money in automated espresso machines (W6,T1,T3 ST STRATEGIES 1. Establish loyalty programs (S1,S2,S3,S14,O2,O5,O6)

2. Promote SVC (S13,S14,O2,O5,O6)

3. Establish an internal strategic marketing group (S1,S2,S8,S12,S13,O1,O2,O4) ALTERNATIVE COURSES OF ACTION Educate poor partners to utilize their soft skills to treat their customer as valuable
Free cup service
Improve the speed of service to less than 3 minutes by increase labor hours DECISION After analyzing the current situation of Starbucks, the best course of action they could consider doing is to educate poor partners to utilize their soft skills. RECOMMENDATION This need to be infused with the Starbucks culture and core values to be successful and sustainable impact. Since Starbucks is already a very established company with many employees, Starbucks need to call for a change management training plan to its employees or partners and training them to with the needed soft skills. Moreover, this effort must also be initiated right at the recruitment process and training of Starbucks' Partners. END
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