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Case Solution Starbucks Essay

716 words - 3 pages

Starbucks delivering customer service

1. Brief Introduction
• Founded in 1971 by three coffee fanatics- Gerald Baldwin, Gordon Bowker & Ziev Siegl
• Schultz joined the marketing team in 1982
• Later, the founders sold the entire business to Schultz
• By 2002, it served 20 million unique customers in 5000 stores across the globe
• Sales had a CAGR of 40%, while Net Earnings had a CAGR of 50%

Key people in the CASE:
VP of Administration in North America: Christine Day
CEO: Orin Smith (A Harvard MBA who joined 1990)
Chairman & Chief Global Strategist: Schultz

2. Problem Statement
* Starbucks failed to meet customer ...view middle of the document...

Declining Customer Satisfaction
Imperfect tool for measuring customer satisfaction: Customer Snapshot
0 – Mystery shopping program thrice in a quarter
1 – Rated based on 4 criteria- service, cleanliness, product quality & speed of service
2 – Legendary services- behaviour that created memorable experience for customer
Reasons based on research outcomes:
4 - Rough brand image of primarily making money & building more stores
5 - Perceived differentiation between Starbucks and others was very less
6 - Somehow less trendy as compared to others
7 - Unsatisfactory service of partners
8 - Low speed of service- customized drinks slowed down the process of delivering

6. Changing Landscape
• The Starbucks of 1992 had 140 stores, whereas in 2002, it had more than 5000 stores across the world
• 77% of the sales were from beverages, while in 1992, half of the sales constituted of whole bean coffees
• The Starbucks of 2002 was far more complex with the addition of new products on the menu
• The Partners had to spent more time as beverages became more customized
• The demographics of the customers changed Earlier only the affluent, well educated and high income group used to visit  In 2002 another group evolved which was less educated, younger and had low income

7. Ideal Customer & Satisfaction
• The most ideal customer...

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