Starbucks: Delivering Customer Service Essay

3845 Words Jan 25th, 2007 16 Pages
Statement of the Problem
How can Starbucks increase customer satisfaction while growing at the same time?
Recommended Course of Action
After evaluating each alternative (Exhibit 2), we recommend that Starbucks invest $40 million per year to increase labor hours per store in order to solve the problem with the quality of service. Starbucks should also set up an internal strategic marketing team. This will allow Starbucks to have a proactive feedback of customer satisfaction and hence faster improvement. We also noticed that labor cost is high for Starbucks' North American operations. To keep labor cost at reasonable level, Starbucks should reduce waste in making drinks, keep consistency in drinks, and improving productivity. We recommend
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Starbucks' strong distribution network will keep the company very competitive in the future. We strongly believe Starbucks should utilize its distribution network to expand sales to non-retail channels that have great growth potential. We also noticed that there are internal problems within Starbucks - specifically the lack of a strategic marketing group. The consumer retail business needs a strong marketing department to analyze market data and make strategic plans. It is crucial for Starbucks to streamline its marketing department. With its own marketing team, Starbucks can continuously understand their customer's needs and react quickly if necessary. The addition of a marketing team will also allow Starbucks to deploy a suitable strategy (if at all) to capture new customers in existing and new markets.
Starbucks has focused on various aspects in order to deliver excellent customer satisfaction. The key factor that they need to recognize is that they need to realize how they are serving their customer. Starbucks does have other factors that it ranks high in, but that is only part of the picture. Customer service is the key to Starbucks being recognized as the industry leader in gourmet coffee and coffee drinks for years to come.
Exhibit 1 Situational Analysis

Nature of Demand o Lots of Americans drink coffee o Many people

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