Starbucks Case Essay

1015 Words Feb 6th, 2016 5 Pages
Case 1: Starbucks

1. Several factors that accounted for the success of Starbucks, the first being its excellent coffee. Starbucks prided itself on its premium, high-quality, coffee; an alternative to normal coffee that was not offered much in the 90s. Its second factor to success is the company’s superior customer service philosophy, which they defined as “customer intimacy” including everything from recognizing a customer and recognizing their drink to customizing a drink to a customer’s preferences. Lastly, the physical environment of the coffeehouses (furniture, décor, lighting, layouts), were used to create an up-scale and inviting ambience that encouraged lounging. These factors of success along with appealing to its target
…show more content…
Another change in the company was an increase in menu complexity. New beverages and items are being launched regularly which allows for more options for the non-coffee drinking customer. This increase of product diversity meant a more mainstream consumer compared to Starbucks’ original serious coffee drinking target customer. These handcrafted beverages made up a large percentage of Starbucks’ sales, with whole beans now only composing 6% of Starbucks’ revenues in 2002. These numerous handcrafted items, though profitable, also puts a pressure on Starbucks’ baristas that were not felt when the menu was more simple in 1992. Mastering the “hard skills” needed to be a barista was now more difficult than ever.

3. The new changes to Starbucks have contributed to a decline in customer satisfaction with the brand. Due to the increase in menu complexity, there was now more strain among the baristas who have an increasingly difficult job of mastering the “hard skills” associated with creating the handcrafted beverages. This also leads to less happy employees. Moreover, through the increase in accessibility, many of Starbucks’ new customers are commuters, introduced to the product through the company’s new non-coffeehouse channels. These new customers are more likely to be rushed; they see Starbucks as part of their routine and enjoy the store for its convenience. According to Exhibit 8, these new customer have a generally lower opinion of

Related Documents