Starbucks Delivering Customer Service Case Study Solution

Recommendation:

On the basis of the alternatives evaluation, it was found that the price change was not an option to be chosenas it was required by the organization to keep its strategy of pricing intact. Proceeding with the plan of Day about the addition of labor force, however, is cost beneficial and feasible but not the best option to be chosen.

The plan to increase the service speed and its efficiency through all its stores. Although, it was ranked at seven during the analysis of cost benefit but bringing improvement in the service speed, Starbucks has the capability to grow its revenues $143 M in 2002 to $231 M in 2005. On the other hand, the cost of implementation plan of addition of labor is about $40 M.

Therefore, it to recommend that Starbucks should focus on speeding the services and launch of a training program carrying out friendly behavior of employees and an offer of free coffee to their customers after a certain limit.

Implementation:

In the implementation of each recommendation, Starbucks needed to follow it in a step-wise manner. At first, improvement in the service speed to no more than three minutes through increase in the hours of labors is considered as a better option. As the efficiency of Starbucks services had not been best and close by three minutes through bringing improvement in the equipment and processes. This strategy is first to be implemented in pilot mode.In order to test this strategy, Starbucks must choose few localities with the need of implementation of accurate and controlled tools for measurement of improvement in the service speed. It is important to monitor the levels of consumer satisfaction to evaluate the improvements in return. Once, the organization gets confident in achieving desired outcomes, then the organization surely roll it out in all its stores operating in different regions of the world.

Second recommendation of bringing improvement in the friendly nature of employees and their attention at work. As it can be achieved with no experience of added cost, but this can be a great challenge to the organization.This practice requires infusion with the culture of Starbucks and its core values to give a sustainable impact and be successful. As Starbucks is well-established and recognized organization with a quite large workforce, it needs to bring change in the training plan management for its workforce to provide them with training of soft skills. Furthermore, this needs to be an initiative at the time of recruitment process and the training of employees. Changing the perception of consumers towards the staff of Starbucks is to be for the higher satisfaction of customers.

In order to achieve both the goals and overcome the issues, recreation of Starbucks image on communicating about its consumer values.

Expected results:

However, the analysis was highly diligent and the planning was quite better. There is a possibility that implementation of these alternatives might not result in positive outcome. The reason behind this is based on the pilot program implementation. It will provide with the breathing space in the events when the results will not be according to expectation.

Exhibits:

Exhibit – SWOT Analysis

 Exhibit – Alternatives

Exhibit –Porter’s Five Forces:

Exhibit –Customer satisfaction gap

• About 13.87 percent customers are unsatisfied whereas 73 percent customers reported the importance of Friendly staff.
• The profitability that customers predicted is the product of 19 percent x 73 percent = 13.87 percent.

Exhibit – Cost Benefit Analysis:

According to the information from the case, about 42 percent customers of Starbucks visit two times in a month, 37 percent 3 to 7 times in a month, and 21 percent no less than 8 times a month generating revenue of about 11 percent, 27 percent and 62 percent respectively.

Considering these revenue percentages and data of Exhibit 4, the projected revenue for the year 2002 and 2005 are:

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