Starbucks

3. What problem is Starbucks currently facing? Why have Starbucks customer satisfaction

scores declined? Has its service declined? How does Starbucks define customer service? What does Starbucks mean when it talks about “customer intimacy”?

Despite doing well in the post 9/11 recession, for example, 5% growth rate for the 11th consecutive years, Starbucks is facing some challenges that have many implications for its future business. One of the important challenges is the declining trend in customer satisfaction. Research showed that a high majority (34%) of the customers had suggested improving the quality of Starbucks services such as friendlier and attentive staff (19%) and efficient service (10%) to make them feel more valued. Also, brand image of Starbucks is also decreasing. Customers are viewing Starbucks as an organization that cares only about money (61%) and more expansion (55%) instead of customer satisfaction. Moreover, although it was believed that the most frequent customers of Starbucks visits 18 times a month, recent research results shows that they only visits 5 times a month, which means that the number of customer is also declining along with their satisfaction. Besides, regardless of Starbucks’ claims of being the most innovative organization when it comes to new product launching, specialty coffeehouse customers find little difference in the products between Starbucks and smaller coffee chains. Another challenge is the rising competition from different companies such as small-scale companies and independent coffee shops, which are differentiating themselves from Starbucks by providing various customized services. In addition to this, Dunkin Donuts has recently entered into the beverage markets by providing products like Dunkaccino and Vanilla Chai, a substitute for Starbucks products. Increased workload on the Barista to provide customized beverages to the customer, failure to identify the new group of customer and an absence of a...