I.

Summary of the Case

In 1971, Starbucks was founded by three friends named Gerald Boldwin, Gordon Bowker and Ziev Siegl in Seattles Pike Place Market. They sold whole Arabica beans to a niche market of coffee purists. The team was joined by Schultz in 1982 as part of the marketing team. He travelled to Italy and became fascinate with Milans coffee culture. Upon his return, Schultz convinced the company to set up an espresso bar in the corner of its only downtown Seattle shop. A few years later, Schultz got his chance when the founders sold the company to him. He began opening new stores which sold coffee beans and premium priced coffee beverages. Starbucks operations are governed by its dedication to deliver value first, providing excellent quality coffee. Second, providing good service or what they call customer intimacy. And third, the atmosphere of the shop that makes customers want to stay. The companys overall objective was to establish Starbucks as the most recognized and respected brand in the world. This ambitious goal required an aggressive growth strategy; and in 2002, the two biggest drivers of company growth were retail expansion and product innovation.

II.

Statement of the Problem Starbucks have built itself as one of the bet coffee retailer for both coffee beans and coffee based beverages. However, as the company concentrates more on how to deliver high quality coffee and other products it lost its focus on its customer service in which customer satisfaction is not met. Starbucks is now left with a decision to whether imply the $40 million plan to enhance the customer service and attract more customers or think of another option or plan.

III.

Objectives To determine whether to implement the $40 million plan

To determine how to improve the customer service for an excellent customer satisfaction To be able to know how to cope up with the evolving market

IV.

Areas of Consideration STRENGTHS

1. Low margin of employee turnover 2. Strategic locations which offers high store visibility to customer 3. Strong supplier relationship 4. Market position in consumer brands in the world 5. Creating recession proof products 6. Excellent employee-employer relationship 7. High quality products WEAKNESSES

1. Lack of strategic marketing group 2. Not focused goals or objectives 3. Low customer satisfaction 4. Product differentiation among competitors products is weak 5. Job complexity for the Baristas 6. Slow production process of coffee OPPORTUNITIES

1. Rising demand for customized coffee 2. Emerging market from all ages demographic 3. Globalization 4. Potential business alliances 5. Technological advancement

THREATS

1. Evolving customer profile 2. Competition 3. High wages rates in some of the location of Starbuck stores 4. Tension between product quality and customer focus 5. Store Cannibalization 6. Economic instability 7. Brand image inconsistency with regards to the target market 8. Unfavourable market research results with regards to customer value

STRATEGIES SO

1. Encourage more customized order from new and existing customers to create loyalty. (S5,O1) 2. Market penetration for new and emerging market through strategically positioning stores in a whole new environment (S2,O2) 3. Creating new alliances and making the supplier relationship stronger for purposes of benchmarketing and global penetration. (S3,O4)

4. Realized expansions to untouched countries. (O4,S4)

STRATEGIES WO

1. Create strategic marketing group to cater every emerging market segment (W1,O2) 2. Resort to technology base production processes to avoid bottleneck and to meet customer satisfaction(W7,W4,O1,O5) 3. Create relationship with new and existing companies for partnership or joint ventures to widen and strengthen the product differentiation of Starbucks (W5, O3, O4)

STRATEGIES ST

1. Develop or innovate high quality products and well strategized locations to meet up with the competition (S2,S7, T2) 2. Realize faster product innovations to cope up with the changing market and economic crisis (S5,T6) 3. Equalize efforts on both product quality and customer service (S7,T4) 4. Maintain low margin employee turnover by conforming to labour regulations in different locations, by motivating employees, and by strengthening employee-employer relationship (S1,S6,T3_

STRATEGIES WT

1. Develop a strategic marketing group to focus more on the evolving customer profile to meet new and existing demands (W1,T1) 2. Resort to technology advancements for faster production process to create a stronger competitive advantage (W7, T2) 3. Enhance customer service to get favourable future market research results with regards to customer value and to meet customers expectations and satisfaction (W3,T8)

V.

Alternative Courses of Action

1. Resort to technology base production processes to avoid bottleneck and to meet customer satisfaction(W7,W4,O1,O5) 2. Equalize efforts on both product quality and customer service (S7,T4) 3. Create strategic marketing group to cater every emerging market segment (W1,O2)

Case Study on Starbucks

Submitted to: Ms. Liza Nismal February 4,2013