Question 1. Friendlier and faster service was a higher rated attribute by customers than personal treatment which was an essential part of Starbucks measurement system. Starbucks had Just Say Yes policy which empowered employees to provide best service to the customers beyond company rules.
Therefore, to grow aggressively and for cost-saving and quality-maintaining, Starbucks had better utilize these specialty operations as one of its distribution strategy. Starbucks, which positioned itself as the third place, was now being perceived as a place for coffee on run. Thus there was great potential for Starbucks to accelerate the development of its alternative distribution channels. This report will analyze them, and solutions and recommendations will be given. As per the case, from a cost standpoint labour was Starbucks largest expense. What people order at Starbucks around the United States.
Question 1. Therefore, to grow aggressively and for cost-saving and quality-maintaining, Starbucks had better utilize these specialty operations as one of its distribution strategy. Question 2. This is a huge downside and additional labour can be used to retain the highly satisfied customers in the same state. Figure 1.
Negative publicity: its high speed markets and different retail channels expansion brought some negative influences Appendix 2: 4Ps analysis Product Various product portfolios Price Medium high-end price Starbucks is always located in neighborhood where there is a Place perceived high traffic and some other places with large population like downtown and business quarter.
How to sell its value to them was the problem that Starbucks was facing. But, Howard believed that they needed another place where they could sit, relax and network with others around. Thus there was great potential for Starbucks to accelerate the development of its alternative distribution channels. In order to plug these expectations Christine Day, Sr. Speed of service forms one of the criteria of the basic service and Starbucks has improved on the parameter.
Question 3. In addition, further generalization of use of the automated espresso machines verismo is recommended. Additionally, it is important to notice that Starbucks takes the responsibility to train the employees of the licensees to meet its standards. Why has Starbucks customer satisfaction scores declined? The company's operating margin was 8.
Increasing the customer count. Distribution Channels: Almost all the Starbucks stores were located in high visibility and traffic areas achieved by early expansion by means of taking the company public, through this one can achieve low rental cost etc. Additionally, since Starbucks' coffee-making processes were quite complicated, the store operating efficiency was influenced. Starbucks came to be seen not as a coffee chain with a difference, but as corporate which cared primarily about making money. According to Annual Report Starbucks, , Starbucks payroll-related expenditures increased because of increasing average wage rates and the growing sales on labor-intensive handcraft drinks.
Because of their limited presence, the specialty coffeehouses were able to deliver differentiated service to a niche crowd, which was difficult for Starbucks to achieve considering its ubiquity. The franchised expenses to franchised revenue of McDonald, Yum and Panera were far below their total operating costs to revenue see Appendix 3 , which is a strong evidence for the cost-saving of licensing. Starbucks considers customer service as a vital element of in store experience. In their drive to build brand and introduce new products, they lost sight of changing consumer needs.
Figure 1. Starbucks considers customer service as a vital element of in store experience.
Cooperation partners to help competitors appearing constantly. Customer Satisfaction- Starbucks is dealing with 2 customer segments i. Existing customer segment puts pressure on the service of the Starbucks store, yet are loyal customers of Starbucks to whom Starbucks owes its brand identity. Starbucks goal was to serve a customer within 3 minutes. Strongly growing U. Starbucks, which positioned itself as the third place, was now being perceived as a place for coffee on run.