Starbuck's case study

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STARBUCKS CASE STUDY 2002

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  • Employee turn over rate is 70 vs 300. , internal promotion
  • If the baristas lasted beyond 90 days, there is chance he will stay for three or more years which in turn can make regular customers more recognizable by the staff and friendly approach can be there.19% of customer feel if they can get free coffee (promotions)after particular visits they will feel “valued customer”.Service time can be reduced by using “automated machines” at high customer footfall outlets which will keep data of customer and in turn will give options based on the likings in turn reducing the order time.As compare to satisfied customer , highly satisfied customer will visit 67.44 % more per month.Can do joint ventures as only 4% market share in home utilized coffee.Advertisement in mass mediaCorporate tie ups as coffee is becoming more official these days. ( meeting & interviews).Can improve the ambience of the outlets turning them into more greenish and natural as the theme of STARBUCK logo goes.
  • Starbuck's case study

    1. 1. A CASE STUDY BY: NAKUL
    2. 2.  The central issue around which all the problems lying is that “company services are not meeting customers expectation”. How to differentiate STARBUCKS from competitors? Should the company roll out $40 million plan for reducing the serving time under 3 minutes? How to link customer satisfaction to increase in sales & profitability?
    3. 3.  Gap between scores on key attributes and customer expectation. Customers perception about brand:Starbucks cares primarily about making money Up from 54% to 61%Starbucks cares about building more stores Up from 48% to 55% Changes in the target customer. How can service time of 3 minutes can assure customer satisfactions already service time of 3.10 minutes has been achieved.
    4. 4.  Instead of rolling out $40 million for increasing labor hours company should focus on the following aspects: Right guidance for baristas during first 90 days. Promotion campaigns for regular customers. To convert satisfied customer into highly satisfied customer.
    5. 5.  Concluding, we would like to add that an investment in adding more labor to stores might help the company increase some of its satisfaction levels and maybe even get a good return out of it, but from the data available in the case it appears that Starbucks has a lot of other problems that needs to tackle. They need to re‐evaluate their value proposition, examine how their expansion strategy has led to the deterioration of their brand image and find new ways to satisfy the customerFew Recommendations Launch a program to improve staff’s friendliness and offer a free coffee after certain visits Pilot projects in selected locations Loyalty program like Loyalty card CRM based application
    6. 6.  Risks in rolling out $40 million plan: Company profit rises to $33.9 million during FY02 and if company is investing $40 mill there is chance that next year company will have net profit zero. Company is planning to open 525 company operated and 225 licensed outlet so they need capital.
    7. 7.  If the baristas lasted beyond 90 days, there is chance he will stay for three or more years which in turn can make regular customers more recognizable by the staff and friendly approach can be there. 19% of customer feel if they can get free coffee (promotions)after particular visits they will feel “valued customer”. Service time can be reduced by using “automated machines. The company should follow ROCE. (asset management).
    8. 8.  As compare to satisfied customer , highly satisfied customer will visit 67.44 % more per month. Can do joint ventures as only 4% market share in home utilized coffee. Advertisement in mass media Corporate tie ups as coffee is becoming more official these days. ( meeting & interviews). Can improve the ambience of the outlets turning them into more greenish and natural as the theme of STARBUCK logo goes.

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