Starbucks - Delivering Customer Service

The case discussed here outlines a number of challenges, which the Starbucks Coffee Company is facing as of late 2002.

Starbucks was founded with the intention to deliver a superior coffee drinking experience to a predominantly affluent, well-educated white-collar clientele all across America. ¬¬Starbucks’ value proposition was built upon three pillars:

• The coffee itself: Delivering the highest quality coffee possible

• The service: Delivering outstanding, uplifting service, delighting customers whenever possible

• The atmosphere: Providing a “third place” to its patrons, a place where lounging, relaxing and socializing is encouraged

The most recent market research at Starbucks had however revealed to management that there was substantial dissatisfaction especially in the area of service. In a survey, ten percent of customers had indicated, that they would wish the service at the coffeehouse were faster and more efficient. Nineteen percent of customers indicated also, that the service could be friendlier and more attentive.

The research also pointed towards an even graver issue. In the consumers perception, Starbucks as a brand was not very well aligned with the core values it wanted to communicate, but rather negatively associated with mere monetary intentions. Also, Starbucks offer was not differentiated enough when compared to independent coffeehouses. People perceived it as a convenient, standardized source of good quality coffee.

What also became evident when evaluating the market research was, that the originally presumed customer base was evolving over time – there were now more young customers which were less well-educated and had a lower income as well as a larger variety of ethnicities within the customer base.

But there were not only challenges from outside the company. It also became evident that the organizational structures in place at Starbucks were not ideally suited to address changes in its environment. There was no strategic...