Starbucks Casestudy-Harvard

Starbucks: Delivering Customer Service 1. Key Problems that needs to be addressed by the company are: * The complexity of the barista’s job to prepare customized beverages has been increasing considerably which is affecting the service time. This might have led to reduction in customer satisfaction which could affect the company’s brand image and revenues. * The company did not have an individual department for Marketing Strategies. This kind of structure overburdened the senior executives as they had to assume marketing related responsibilities also. * The company wanted to bring service time down to 3 minutes. * There was not much of a difference in the image or the products of the Starbucks compared to small coffee chains, according to the regular coffee drinkers. * The brand image of Starbucks was being affected with the increasing commercialization of the Starbucks coffee shops and the mindset of the people that Starbucks just wants to make money. 2. New Information: * The company has been growing and its present net income for the year 2010 stands at $1.32 Billion. 3. Recommendations: * The company should form a different department which would concentrate on Marketing Strategies; this would relieve the executives from making any marketing decisions and would help increase their productivity. * Increase the number of baristas by accepting the proposal of investing $40 million, this would help each stores to allocate 20 more labor hours a week, thereby reducing the service time, especially during the rush hours. * Optimize the number of outlets in an area based upon various factors such as population of the town, the per capita income of the people etc. so as to maintain the brand name and for better overall profit. * In order to reduce the service time under present condition it is better to have 2 counters at each store. One dedicated to regular coffees and the other one dedicated to customized coffees.