Starbucks Case Study.docx

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Summary and Relevance to Lectures

Starbucks is the largest coffee shop chain in the world. It was established in 1971 at Seattle,Washington. It was famous for its quality fresh-roasted coffee beans and stylish atmosphere. They

have over 9,000 stores worldwide.

They have several product lines such as:

Beverages such as coffee, ‘Tazo’ tea, soda, and juice.

Pastries, salads and pastas

Whole coffee beans

Coffee-related hardware and equipment

Merchandise such as mugs, tumblers, CDs, and dolls.

Starbucks, as everybody knows, is the leading coffee retailer today. Because of the continuous

profit growth of the company, competitors start to emerge as they see potential revenues for this kind

of industry. But despite the several threats of the market, Starbucks has still the most effective quality

strategies among any other coffee shop companies. This is seen on the company’s earnings that rise

up consistently, its distinguished coffee taste, and quality systems that bring several recognitions to

Starbucks.

In terms of Quality Management , Starbucks is one of many companies in the world that puts

Quality over Quantity. Starbucks uses several quality systems. The first starts with the baristas on the

floor. The drinks are called from the barista on the point of sale to the barista making drinks. This is

then recalled to the first barista. When the drink is called back it is checked for accuracy as well as

making sure no drinks are missed. After the drink is made the barista checks the drink for accuracybefore handing it off to the customer. A second system that Starbucks use is random check-ins from

District Managers (DM). In these check in the DM talks to the customers, watches the baristas, and do

random checks of drinks to ensure quality. The final system the Starbucks uses is a third party.

Starbucks uses a company called ECOSURE to perform checks on all the stores to ensure all quality

standards are met every six months. The stores have a copy of the required qualifications that it must

meet to prepare for these checks as well as maintain these standards.

Quality of Design is a cross-functional design team, including members from marketing,

engineering, operations, and other departments are responsible for the quality of design.

Customer needs are taken into consideration during this process. Starbucks knows customers

are looking for a variety of caffeinated or decaffeinated drinks to start their day. The CEO of the

company added even more choices after spending time in Italy and loving their blends of coffee. They

have experimented with many different combinations and flavors, which is what makes them so

popular today.

Quality of conformance is meeting specifications regardless of what quality of design was

reached.

For example, Starbucks meets specifications by allowing customers to have their coffee to their

liking, non-fat, decaffeinated, foam, a shot of espresso, and other personalized options. Also,availability, reliability, and maintainability, are important for conformance. Availability is when the



product or the machines to make the product are up and running. Starbucks has more than one

machine in each store and each employee is trained to service the machine to ensure that it’s working,which makes them more reliable as well. To maintain each machine employees clean them every night

and have proper training to use them correctly. The rare occasions it does fail a new machine is

ordered or fixed depending on the severity of the problem and within three days everything is back to

normal.

Field service is customer service and refers to warranty and repair or replacement of the product

after it has been sold.

Starbucks can fix their problem very quickly because if it ’s not to the customers liking they

could just add whatever is missing or make another one to meet the expectations. Also, field service

refers to promptness and Starbucks, although there are many locations that have a lot of traffic, speed

things up by splitting up the work two people may be in charge of ringing up orders while two others

make the drinks or prepare the food the customer orders.

Some new ideas that Starbucks can use as a system is increase the ECOSURE checks to every

four months. This will help ensure that the standards are better maintained. A second system that

could be put into place could be a way to measure the drinks weight before handing off to the

customer to ensure proper weight.

Compared to other coffee shops, Starbucks has always been, and will always be about quality

when it comes to coffee. What makes their coffee outstanding among others is that they choose

exceptional coffee beans for they believe that quality, flavor, and complexity cannot come from simple

roasting. They place coffee beans in high altitude, which creates density and in turn would create to

flavor. But it is not just about the altitude. It is on all the things that they do for they have always

applied higher standards to the sorting and grating and not everybody does that. Surely, the company

knows that simply having an Arabica coffee is not enough. They do make exceptional coffees thatoutshine others.

Starbucks also uses several quality systems to provide adequate service to the customers. The

company uses random check-ins from district managers wherein they check the baristas, talk to the

customers to acquire feedback, and check drinks to ensure quality. It also uses EcoSure to perform

checks of the required qualifications every six months for all the stores to ensure that the quality

standards are maintained. Moreover, Starbucks considers empowering employees as a quality system

by mobilizing them to become brand evangelists and providing them with sufficient employee

benefits. Because of the contributions that these effective quality systems make, Starbucks has been

achieving several prestigious awards and recognition such as “No. 1 Best Coffee,” Fast Food and Quick

Refreshment categories on Zagat’s Survey of National Chain Restaurants and Best Global Brands by

Interbrand. The company was also included in one of the “The 100 Best Companies to Work For” and

“Most Admired Companies in America” by Fortune. As of May 2013, the company is as well on the18th spot on Forbes World’s Most Innovative Companies while fifth on World’s Most Admired

Companies, which beat all of its other competitors in the same industry.

With just a first time coffee experience at Starbucks, one could already see that the company is

really successful beyond the corners of its stores. Compared to its other competitors, the company is

not just simply providing ordinary service to customers but is strongly committed to achieve its

mission that is to inspire and nurture the human spirit. Innovation and quality would always be in the

company’s vocabulary. It has always been consistent in developing quality strategies to providegenuine service, comfortable and inviting atmosphere, and a superb cup of expertly roasted and richly



brewed coffee to the customers which is why it is always the leading coffee shop in the world and has

the most effective quality strategies over the others of the same industry.

In the case study, there are 5 questions that are the fundamental strategic questions under

Howard Schultz’s guidance, which are as follows:

1.

What could Starbucks do to make its stores an even more elegant "third place" thatwelcomed, rewarded, and surprised customers?

2. What new products and new experiences could the company provide that would

uniquely belong to or be associated with Starbucks?

3.

What could coffee be—besides being hot or liquid?

4. How could Starbucks reach people who were not coffee drinkers?

5. What strategic paths should Starbucks pursue to achieve its objective of becoming the

most recognized and respected brand of coffee in the world?

We have several ideas and suggestions to answer those strategic questions:

1. Starbucks can make their stores cozy and homier, with earthy tones in their stores with

the use of wooden chairs and tables and earthy colors on their couches and sofas such

as maroon, green and browns. The baristas can stay behind the counters and welcoming

the customers every time new customers come so that the store don’t get too crowded.The barista should be friendly to the customer. Putting on some jazzy and easy listening

music can also make a huge part in making the store’s atmosphere more calming andhomier. They could also give the stores earthy and coffee fragrance all over the store to

give the sensation of more natural environment. This is so that the atmosphere of the

store can make the customer relax, because it was one of many reason people go to

coffee shops.

2. New tumblers, mugs and provide live music once a week or every weekend to give new

experience to customers. They could also make events to make the atmosphere livelierand the same time promote Starbucks itself, such as watch the soccer game together

through the TV, giveaways.

3. Innovate the coffee to be Jelly form. They could make coffee as a room fragrance, candy,

coffee ice cream, chocolates, and make alcoholic version of coffee.

4. Make flavored ice tea, smoothies, chocolate drinks; crème Frappuccino that is coffee-

less blended crème so they could also reach the non-coffee drinkers.

5. The best strategy for them to have is to have main focus and vision. Starbucks is already

popular nowadays because coffee is a demand that people need to help them get

through their days from their work and school. It is a way for them to get energized.

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