Starbucks Case Study

Starbucks has been an extremely successful company from early on and there are many things that have led to this. They have high quality coffee, which has been monitored in regards to the roasting process and the distribution as well as great service and atmosphere. They aim for their service to be intimate, promising and uplifting while their atmosphere is to be friendly and a place where everyone would want to be. They also aim to be the spot where people lounge and hang out. However, with all this success along the way they somehow have lost sight of the consumers and what they want and truly make them happy. Their customer satisfaction is declining. The way they measure customer satisfaction, known as Snapshot, needs to be improved and their perceived image is not good. Starbucks is seen as primarily as making money, building stores and their speed of service is getting slower and slower. With a huge array of product offerings, the ability to customize drink orders, and the high demand of the barista position, it is difficult for the employee to pull off a friendly conversation; speedy service and a high quality drink order. In order for this issue to be solved I do recommend that they invest the $40 million in labor.

Investing the $40 million may seem like a lot but when calculations are done, in order to breakeven each Starbucks would only need 47 more customers daily and according to exhibit 3, the average daily customer count per store is 570. To see my calculations please refer to Appendix A. Though the investment of money is a good start, I feel as if the $40 million maybe shouldn’t be split evenly amongst all 5,000 stores but instead allocate the money. The money could be allocated to each individual store based on their size, how many customers are seen, their location and their need for additional labor. I would also recommend that Starbucks improve their brand image and value proposition. This can be done by looking into their customer base a...