Starbucks Delivering Customer Service
Starbucks: Delivering Customer Service
Case synopsis: Baldwin, Bowker and Siegl were masterful in opening the coffeehouse in Pike Place Market. Schultz was doubly masterful in taking Starbucks to an unprecedented level. As of 2002, this familiar household name had a total of 4500 stores which is impressive considering in the ‘80s it had about 100 stores in Chicago and the Northwest. Schultz had his eye on Wall Street although they were incredulous about selling gourmet coffee in a paper cup with fancy Italian names (Starbucks: Delivering Customer Service Pg. 2.) Schultz forged ahead raising $25m in the IPO despite incredulity from Wall Street. The annual growth rate of Starbucks was 40% and in ’02 the company was opening about three stores per day all over the globe. The company was not so much focused on advertising but in creating a unique experience for the consumer when home and work were simply not enough. Starbucks longed to create a “third space” that offered both solace and/or interaction with others in a friendly, pleasing environment. The three-pronged value proposition consisted of coffee, service and atmosphere. With coffee they would serve the best in the world controlling as much of the supply chain as possible ensuring quality from start to finish. In service they created “customer intimacy” calling out names of customers and knowing their specialty drink. The atmosphere was the last prong and the goal was providing a comfortable lounge and linger experience. In addition to coffee there were retail components generating additional revenues like ceramic cups, coffeemakers and food items. Employee training was a focus, too, and with 300% turnover who could afford to ignore it? The attractive benefits and stock options lured employees to stay longer which reduced the turnover rate to 70%. They focused on both hard and soft skills in the stores. Hard skills being endlessly making drinks, running the cash register, and the mastering
Case synopsis: Baldwin, Bowker and Siegl were masterful in opening the coffeehouse in Pike Place Market. Schultz was doubly masterful in taking Starbucks to an unprecedented level. As of 2002, this familiar household name had a total of 4500 stores which is impressive considering in the ‘80s it had about 100 stores in Chicago and the Northwest. Schultz had his eye on Wall Street although they were incredulous about selling gourmet coffee in a paper cup with fancy Italian names (Starbucks: Delivering Customer Service Pg. 2.) Schultz forged ahead raising $25m in the IPO despite incredulity from Wall Street. The annual growth rate of Starbucks was 40% and in ’02 the company was opening about three stores per day all over the globe. The company was not so much focused on advertising but in creating a unique experience for the consumer when home and work were simply not enough. Starbucks longed to create a “third space” that offered both solace and/or interaction with others in a friendly, pleasing environment. The three-pronged value proposition consisted of coffee, service and atmosphere. With coffee they would serve the best in the world controlling as much of the supply chain as possible ensuring quality from start to finish. In service they created “customer intimacy” calling out names of customers and knowing their specialty drink. The atmosphere was the last prong and the goal was providing a comfortable lounge and linger experience. In addition to coffee there were retail components generating additional revenues like ceramic cups, coffeemakers and food items. Employee training was a focus, too, and with 300% turnover who could afford to ignore it? The attractive benefits and stock options lured employees to stay longer which reduced the turnover rate to 70%. They focused on both hard and soft skills in the stores. Hard skills being endlessly making drinks, running the cash register, and the mastering