Case Study – StarbucksIntroductionStarbucks is the worlds largest multinational chain of coffee shops, with corporateheadquarters in Seattle, Washington, United States. Its coffee shops in the U.S. andCanada are especially popular among students and young urban professionals. Storesare now found in China and England & other countries.According to the company fact sheet, as of May 2006, Starbucks had 6,495 company-operated outlets worldwide: 5,028 of them in the United States and 1,188 in othercountries and U.S. territories. In addition, the company has 4,585 joint-venture andlicensed outlets, 2,633 of them in the United States and 1,952 in other countries andU.S. territories.Inside StarbucksStarbucks stores serve a variety of freshly brewed coffees, which change on a weeklybasis in order to provide customers with an easy way to sample a variety of coffees andblends. However, most of its revenue does not come from coffee, but from blendedproducts that combine coffee or other flavors with large amounts of milk, sugar, and/orgranulated ice.Starbucks whole-bean coffee is roasted in one of four roasting plants, located in Kent,Washington; York, Pennsylvania; Carson Valley, Nevada; and Amsterdam, Netherlands.These whole beans are available for purchase at all Starbucks store locations and inmany grocery stores.Starbucks is known for the novel slang of its menu, substituting "tall," "grande," and"venti" (Italian for "twenty") for the more traditional "small," "medium," and "large."(There is also a "short," the smallest Starbucks coffee size at 8 oz., but its not listed onthe menu in North America—it is, however, listed in other countries such as Japan andHong Kong, and furthermore can be ordered, even though it is unlisted.) Additionally,most coffee drinks can be customized in some way, for example using skim milk insteadof whole milk for a "nonfat" option, or mixing regular and decaffeinated coffee to makea "half-caf." Flavored syrups and whipped cream can be added; cappuccinos can bemade with more foam ("dry") or less foam ("wet"). Some of this argot is used at manyespresso shops, though Starbucks is largely responsible for popularizing it. Other optionsinclude "extra hot" and "soy."Hear MusicHear Music is the brand name of Starbucks retail music concept. Hear Music began as acatalog company in 1990 and was purchased by Starbucks in 1999.
The Hear Music brand currently has three components: the music that each locationplays and the accompanying XM radio channel (XM 75); in-store CD sales, includingStarbucks exclusives; and specially branded retail stores.The first Starbucks Hear Music Coffeehouse is in Santa Monica, California on the ThirdStreet Promenade, and two more locations recently opened, one opened December2005 on the River Walk in San Antonio and another opened in February 2006 in Miami,Floridas South Beach. There is also a Hear Music Store in Berkeley, California. TenStarbucks locations in Seattle and Austin, Texas also have Hear Music "media bars,"kiosks that lets customers create their own mix CDs using tablet-based PCs.Company ManagementIt was policy in the past for a partner to be a shift supervisor or store manager tobecome a Coffee Master. Starbucks recently has changed this stance and now allows allpartners the opportunity to become a Coffee Master.Most stores are internally divided into the backline, where the baristas (or "partners," asStarbucks employees are called) work and serve customers, and the back, whichconsists of the storeroom, bathrooms, and so on. Unless it is very small, the store alsohas a café section where the customers can sit down to consume their drinks.Behind the counter, the floor is divided into three distinct sections. These are: 1. The POS (Point of Sale or cash register): This is where orders are placed, called, and paid for. Pastries are served from here as well as brewed coffees and teas. 2. The Beverage Station: This area is usually broken down into two sections, the Espresso Bar and the Cold Beverage Station. The Espresso Bar is where most hot beverages are made, even if they dont require espresso shots, except for the Coffee of the Week and brewed tea. The Cold Beverage Station is where Frappuccino drinks and iced teas and coffees are made and served. If there is a high demand for cold drinks there may be a barista specifically for the Cold Beverage Station, otherwise a single barista handles the whole Beverage Station, with help from the Floater barista if necessary. 3. The Digital Brewer and Pastry Case: These are usually placed close to each other on the opposite side of the register from the Espresso Bar. The Digital Brewer is where all the Coffees of the Week are brewed and served. This is never a primary position, unlike the others, since it is a low-demand, low- difficulty station, and is usually handled by the barista operating the register or by the Floater.The three primary roles that baristas take on (and swap off on during a shift) are thusPOS (register), beverages (making and serving drinks), and floater (miscellaneous dutiesincluding making Frappuccino beverages and "café", the duty of cleaning tables andotherwise taking care of the customer area).
Some stores might also have a barista at the Frappuccino bar or an inventory barista atthe back of the store. Busy stores might even have two baristas at one station,especially at the espresso bar on busy days or at the Frappuccino station during thesummer. If the Starbucks has a drive-through, it may have one to three baristasassigned solely to serve customers in cars.A regular shifts workers include the baristas and the shift supervisor, often a moreexperienced barista promoted to the position. The shift supervisor (just "shift" for short)is in charge of running the store when the manager is not working. The "shift" also willtake on the role of floater as necessary to resolve bottlenecks.Starbucks marketing strategy involves positioning the local Starbucks outlet as peoples"third place" (besides home and work) to spend time and the stores are designed tomake this easy and comfortable. The café section of the store is often outfitted withcomfortable stuffed chairs and tables with hard-backed chairs. There are ampleelectrical outlets providing free electricity for patrons using or charging their portablemusic devices or laptop computers. Most stores in the U.S. and also in some othermarkets also have wireless Internet access (although this access is not free, as it is insome independent coffee shops). It is not uncommon to see people working in aStarbucks for hours at a time.The company is noted for its non-smoking policy at all its outlets, despite predictionsthat this would never succeed in markets such as Germany, where there otherwise arefew restrictions on smoking. A single outlet in Vienna, which has a smoking roomseparated by double doors from the coffee shop itself, is the closest the company hascome to making an exception. However, Starbucks generally does not prohibit smokingin outside seating areas. According to the company, the smoking ban is to ensure thatthe coffee aroma is not adulterated. The company also asks its employees to refrainfrom wearing strong perfumes for similar reasons.