Starbucks
Starbucks
Justin Kefal
Alison Altomari
Nicole O’Keefe
Diane Ketler
Karen Lau
Nicholas Herman
• Started 1971
Introduction
• Gerlad Baldwin, Gordon Bowker, Ziev Siegel
• Original located in Seattle, Pike Place Market
• Original concept was to bring Espresso bar to
America
• “A third place”
Reasons for Unsatisfied
Customers
• Focus on global expansion
– Starbucks went public in 1992 - raised $25 million
– Worldwide - Opening 3 stores daily on average
– Optimistic growth plan - Own 10,000 stores USA
• Focus on product Innovation
– One half day VS. 16 days working 8 hr shifts
– Clientele is changing with menu
– Increase of customization
– “Just Say Yes”
Since the beginning…
• One store: whole coffee beans
• Transitioned to selling coffee drinks
• NOW:
– Went public in 1992, opened 140 stores
– 5000+ stores, 20 million customers
– Extensive drink menu
– Starbucks outside the coffee shop
Competition
• Big Coffee Stores:
– Gloria Jeans
– Caribou Coffee
– Dunkin’ Donuts
• Small, Independent Shops
– More intimate/personalized
– More potential product mix
Demand
• 109 million daily coffee drinkers
• 52 million on-occasion coffee drinkers
• 1/3 coffee consumption outside the home
• $21.5 billion total coffee market
– Starbucks share – 42%
Consumers and the Ideal Customer
• Changing clientele – new demographics
– Younger, less well-educated, lower incomes
• Highly satisfied customers = most profitable customers
• Key factors for customer satisfaction
– Clean stores and friendly/attentive staff
Solutions
• Starbucks’ Proposal: Invest 40 million annually in the company’s 4,500 stores, which would allow 20 additional labor hours a week/per store.
• Our Proposal: Do invest the 40 million annually, but do not use every store.
Research those stores with higher volumes and invest in those.
Solutions
• Add “bar-back” type employee
• Offer discounts and incentive offers
• Better rotation schedule to help prevent sluggish employees
Evaluating the Solutions
• We will continue evaluating the effectiveness of our plan by having monthly check-ups to determine customer satisfaction
• Keep checking sales with respect to customer satisfaction to make sure both stay positive
• Continue the Mystery Shopper Program
Post-situation
• July 1 st ,2008 – decision to close 600 stores nationwide, expected to close within the next year
• Starbucks Value Card
• Iced Brewed Coffee Card
