Case Study of Starbucks
Running head: INCREASED CUSTOMER USAGE
Increasing Starbucks’ Customer Usage and
Improving Its Poor Customer Experience Problem Statement
The purpose of this paper is to examine how Starbucks can increase current customer usage as well as maintain customer expectations in terms of customer satisfaction and service. Our team will examine Starbucks’ senior vice president of administration, Christine Day’s plans to invest an additional $40 million annually into the company’s 4,500 stores by adding 20 hours of labor a week (Moon & Quelch, 2003). Introduction
In what seems like almost overnight, Starbucks has reached the same ironic status in the Unites States as Coca Cola and McDonalds as a corporate dynasty. Starbucks became an upscale cultural phenomenon and turned into the dominant specialty coffee brand in America by waking up the once-sleepy coffee industry. Starbucks made coffee unique and interesting and introduced many premium coffees domestically as well as internationally. In 1990, only 3% of all coffee sold in the United States was priced at a premium and in 2000, 40% of coffee was sold at premium prices (Vishwanath, 2000). These statistics keep increasing and are increasing because of Starbucks exposure and growth to the United States; however over the past three months, Starbucks stock prices have taken a fall due to poor customer experience and the slow speed of service. Surveys have shown a trend of poor customer satisfaction between the months of April through July 2007. These surveys show that customers perceive Starbucks to be more concerned with making money and opening stores rather than creating that unique and personal Starbucks experience for every customer. With customers feeling less satisfied with their service and treatment, Starbucks’ revenues are not yet starting to decrease but their views in their consumers’ eyes and their marks at the stock exchange are, indeed, going downhill.
Christine Day,
Increasing Starbucks’ Customer Usage and
Improving Its Poor Customer Experience Problem Statement
The purpose of this paper is to examine how Starbucks can increase current customer usage as well as maintain customer expectations in terms of customer satisfaction and service. Our team will examine Starbucks’ senior vice president of administration, Christine Day’s plans to invest an additional $40 million annually into the company’s 4,500 stores by adding 20 hours of labor a week (Moon & Quelch, 2003). Introduction
In what seems like almost overnight, Starbucks has reached the same ironic status in the Unites States as Coca Cola and McDonalds as a corporate dynasty. Starbucks became an upscale cultural phenomenon and turned into the dominant specialty coffee brand in America by waking up the once-sleepy coffee industry. Starbucks made coffee unique and interesting and introduced many premium coffees domestically as well as internationally. In 1990, only 3% of all coffee sold in the United States was priced at a premium and in 2000, 40% of coffee was sold at premium prices (Vishwanath, 2000). These statistics keep increasing and are increasing because of Starbucks exposure and growth to the United States; however over the past three months, Starbucks stock prices have taken a fall due to poor customer experience and the slow speed of service. Surveys have shown a trend of poor customer satisfaction between the months of April through July 2007. These surveys show that customers perceive Starbucks to be more concerned with making money and opening stores rather than creating that unique and personal Starbucks experience for every customer. With customers feeling less satisfied with their service and treatment, Starbucks’ revenues are not yet starting to decrease but their views in their consumers’ eyes and their marks at the stock exchange are, indeed, going downhill.
Christine Day,
References: Business Wire. (2007. May 3). Starbucks Reports Record Second Quarter Fiscal 2007 Results Miller, K. (2007, January 2). Your Waiter Today Will Be a Computer. Retrieved July 15, 2007, from http://www.businessweek.com/smallbiz/content/jan2007 Moon, Y., & Quelch, J. A. (2003). Starbucks: Delivering Customer Service., 1-20. Starbucks. (2006). Starbucks Reports Record First Quarter Fiscal 2007 Results. Retrieved July 20, 2007, from http://media.corporate-ir.net/media_files/IROL/99/ 99518/press/02_09_07_UPDATED_Earnings_Release_FINAL.pdf. Vishwanath, V. and Harding, D. (2000). The Starbucks Effect. Retrieved July 30, 2007, from http://www.scribd.com/doc/53759/The-Starbucks-Effect