Starbucks Case Study

Casie Angela Thanos 110613129

Mentari Glorya Bonde 110613041

Michelle Celine Mandagi 110613163

Stevany Carolin Tanjaya 110613062
Summary and Relevance to Lectures

Starbucks is the largest coffee shop chain in the world. It was established in 1971 at Seattle,
Washington. It was famous for its quality fresh-roasted coffee beans and stylish atmosphere. They
have over 9,000 stores worldwide.
They have several product lines such as:
Beverages such as coffee, Tazo tea, soda, and juice.
Pastries, salads and pastas
Whole coffee beans
Coffee-related hardware and equipment
Merchandise such as mugs, tumblers, CDs, and dolls.

Starbucks, as everybody knows, is the leading coffee retailer today. Because of the continuous
profit growth of the company, competitors start to emerge as they see potential revenues for this kind
of industry. But despite the several threats of the market, Starbucks has still the most effective quality
strategies among any other coffee shop companies. This is seen on the companys earnings that rise
up consistently, its distinguished coffee taste, and quality systems that bring several recognitions to
Starbucks.

In terms of Quality Management, Starbucks is one of many companies in the world that puts
Quality over Quantity. Starbucks uses several quality systems. The first starts with the baristas on the
floor. The drinks are called from the barista on the point of sale to the barista making drinks. This is
then recalled to the first barista. When the drink is called back it is checked for accuracy as well as
making sure no drinks are missed. After the drink is made the barista checks the drink for accuracy
before handing it off to the customer. A second system that Starbucks use is random check-ins from
District Managers (DM). In these check in the DM talks to the customers, watches the baristas, and do
random checks of drinks to ensure quality. The final system the Starbucks uses is a third party.
Starbucks uses a company called ECOSURE to perform checks on all the stores to ensure all quality
standards are met every six months. The stores have a copy of the required qualifications that it must
meet to prepare for these checks as well as maintain these standards.

Quality of Design is a cross-functional design team, including members from marketing,
engineering, operations, and other departments are responsible for the quality of design.

Customer needs are taken into consideration during this process. Starbucks knows customers
are looking for a variety of caffeinated or decaffeinated drinks to start their day. The CEO of the
company added even more choices after spending time in Italy and loving their blends of coffee. They
have experimented with many different combinations and flavors, which is what makes them so
popular today.

Quality of conformance is meeting specifications regardless of what quality of design was
reached.

For example, Starbucks meets specifications by allowing customers to have their coffee to their
liking, non-fat, decaffeinated, foam, a shot of espresso, and other personalized options. Also,
availability, reliability, and maintainability, are important for conformance. Availability is when the
product or the machines to make the product are up and running. Starbucks has more than one
machine in each store and each employee is trained to service the machine to ensure that its working,
which makes them more reliable as well. To maintain each machine employees clean them every night
and have proper training to use them correctly. The rare occasions it does fail a new machine is
ordered or fixed depending on the severity of the problem and within three days everything is back to
normal.

Field service is customer service and refers to warranty and repair or replacement of the product
after it has been sold.

Starbucks can fix their problem very quickly because if its not to the customers liking they
could just add whatever is missing or make another one to meet the expectations. Also, field service
refers to promptness and Starbucks, although there are many locations that have a lot of traffic, speed
things up by splitting up the work two people may be in charge of ringing up orders while two others
make the drinks or prepare the food the customer orders.
Some new ideas that Starbucks can use as a system is increase the ECOSURE checks to every
four months. This will help ensure that the standards are better maintained. A second system that
could be put into place could be a way to measure the drinks weight before handing off to the
customer to ensure proper weight.

Compared to other coffee shops, Starbucks has always been, and will always be about quality
when it comes to coffee. What makes their coffee outstanding among others is that they choose
exceptional coffee beans for they believe that quality, flavor, and complexity cannot come from simple
roasting. They place coffee beans in high altitude, which creates density and in turn would create to
flavor. But it is not just about the altitude. It is on all the things that they do for they have always
applied higher standards to the sorting and grating and not everybody does that. Surely, the company
knows that simply having an Arabica coffee is not enough. They do make exceptional coffees that
outshine others.

Starbucks also uses several quality systems to provide adequate service to the customers. The
company uses random check-ins from district managers wherein they check the baristas, talk to the
customers to acquire feedback, and check drinks to ensure quality. It also uses EcoSure to perform
checks of the required qualifications every six months for all the stores to ensure that the quality
standards are maintained. Moreover, Starbucks considers empowering employees as a quality system
by mobilizing them to become brand evangelists and providing them with sufficient employee
benefits. Because of the contributions that these effective quality systems make, Starbucks has been
achieving several prestigious awards and recognition such as No. 1 Best Coffee, Fast Food and Quick
Refreshment categories on Zagats Survey of National Chain Restaurants and Best Global Brands by
Interbrand. The company was also included in one of the The 100 Best Companies to Work For and
Most Admired Companies in America by Fortune. As of May 2013, the company is as well on the
18th spot on Forbes Worlds Most Innovative Companies while fifth on Worlds Most Admired
Companies, which beat all of its other competitors in the same industry.

With just a first time coffee experience at Starbucks, one could already see that the company is
really successful beyond the corners of its stores. Compared to its other competitors, the company is
not just simply providing ordinary service to customers but is strongly committed to achieve its
mission that is to inspire and nurture the human spirit. Innovation and quality would always be in the
companys vocabulary. It has always been consistent in developing quality strategies to provide
genuine service, comfortable and inviting atmosphere, and a superb cup of expertly roasted and richly
brewed coffee to the customers which is why it is always the leading coffee shop in the world and has
the most effective quality strategies over the others of the same industry.

In the case study, there are 5 questions that are the fundamental strategic questions under
Howard Schultzs guidance, which are as follows:
1. What could Starbucks do to make its stores an even more elegant "third place" that
welcomed, rewarded, and surprised customers?
2. What new products and new experiences could the company provide that would
uniquely belong to or be associated with Starbucks?
3. What could coffee bebesides being hot or liquid?
4. How could Starbucks reach people who were not coffee drinkers?
5. What strategic paths should Starbucks pursue to achieve its objective of becoming the
most recognized and respected brand of coffee in the world?

We have several ideas and suggestions to answer those strategic questions:
1. Starbucks can make their stores cozy and homier, with earthy tones in their stores with
the use of wooden chairs and tables and earthy colors on their couches and sofas such
as maroon, green and browns. The baristas can stay behind the counters and welcoming
the customers every time new customers come so that the store dont get too crowded.
The barista should be friendly to the customer. Putting on some jazzy and easy listening
music can also make a huge part in making the stores atmosphere more calming and
homier. They could also give the stores earthy and coffee fragrance all over the store to
give the sensation of more natural environment. This is so that the atmosphere of the
store can make the customer relax, because it was one of many reason people go to
coffee shops.
2. New tumblers, mugs and provide live music once a week or every weekend to give new
experience to customers. They could also make events to make the atmosphere livelier
and the same time promote Starbucks itself, such as watch the soccer game together
through the TV, giveaways.
3. Innovate the coffee to be Jelly form. They could make coffee as a room fragrance, candy,
coffee ice cream, chocolates, and make alcoholic version of coffee.
4. Make flavored ice tea, smoothies, chocolate drinks; crme Frappuccino that is coffee-
less blended crme so they could also reach the non-coffee drinkers.
5. The best strategy for them to have is to have main focus and vision. Starbucks is already
popular nowadays because coffee is a demand that people need to help them get
through their days from their work and school. It is a way for them to get energized.