Starbucks Business Strategy to Success | Process design | Operations Strategy | MBA Case Study

Summary

Starbucks, founded in 1971, has grown into the world's largest coffee roaster, known for its high-quality coffee and commitment to social responsibility. The company emphasizes customer experience, offering comfortable spaces and innovative services like mobile payments. Starbucks has expanded globally through market research and local adaptation, like introducing tea-based drinks in China. Their operational strategies include a focus on drive-throughs, collaboration with other brands, and a holistic approach to sourcing. With a centralized system and strong supply chain management, Starbucks continues to innovate and maintain its competitive edge in the coffee industry.

Takeaways

• 😀 Starbucks was founded in 1971 and inspired by the story of Moby Dick, with the logo influenced by the sea and its connection to Seattle's maritime history.
• 😀 The company grew from a single store in Seattle to the largest roaster in Washington by the early 1980s, eventually becoming the leading global coffee producer.
• 😀 Starbucks' mission emphasizes human spirit nurturing, offering a comfortable space, job opportunities, community strength, and a commitment to environmental sustainability.
• 😀 Starbucks adapts to local markets, such as introducing tea-based drinks in China to cater to local tastes, rather than just expanding store size.
• 😀 The company prioritizes convenience with drive-through options for urban and suburban customers, meeting the demands of busy lifestyles.
• 😀 Starbucks was a pioneer in mobile apps, launching one in 2009 that initially helped customers locate stores and customize drinks, eventually evolving to include payment options and loyalty rewards.
• 😀 Starbucks' mobile app remains the most popular payment method among mobile payment systems, surpassing platforms like Apple Pay and Google Pay.
• 😀 In addition to high-quality coffee, Starbucks offers food items, branded merchandise, and collaborates with companies like Bandeau to create exclusive, limited-edition items.
• 😀 The customer experience at Starbucks is designed around four phases: request, negotiation, performance, and acceptance, ensuring personalized service and product satisfaction.
• 😀 Starbucks emphasizes ethical sourcing and sustainability, using programs like the Coffee and Farmer Equity Program and reducing environmental impact with recyclable cups and packaging.
• 😀 Starbucks maintains stringent quality control through regular checks, customer feedback, and store inspections, ensuring high standards in both products and service.

Q & A

What inspired the name and logo of Starbucks?

The name 'Starbucks' was inspired by the first mate of the ship in the novel Moby Dick. The mermaid logo was inspired by the company’s love of the sea, reflecting its origins in Seattle, Washington.

What was a key turning point in Starbucks' history in the 1980s?

In 1981, Howard Schultz, who became the current CEO, recognized the potential to collaborate with the company’s founder, Jerry Baldwin, which ultimately contributed to Starbucks’ expansion into a global coffee giant.

How has Starbucks adapted its product offerings to cater to different markets like China?

Starbucks conducted market research in China and found that people there prefer tea over coffee. To attract customers, Starbucks introduced beverages with local tea-based ingredients instead of focusing solely on coffee.

What operational strategy has Starbucks implemented to cater to urban customers?

Starbucks has focused on expanding its drive-through locations in urban and suburban areas, catering to busy commuters who prefer convenience and speed, reducing the need to queue for coffee.

How has Starbucks utilized mobile technology to enhance customer experience?

Starbucks introduced its mobile app in 2009, initially allowing customers to find stores and learn about coffee. The app has since evolved, enabling users to order, pay, and earn loyalty rewards, making it the most popular mobile payment app among its competitors.

What types of products does Starbucks offer beyond coffee?

In addition to high-quality brewed coffee and espresso drinks, Starbucks offers a range of products including cold blended drinks, roasted coffee beans, tea, fruit juices, cakes, sandwiches, salads, pastries, and branded merchandise like mugs and tumblers.

How does Starbucks collaborate with other companies to expand its merchandise offerings?

Starbucks collaborates with companies like Bandeau, a design company, to create limited edition merchandise such as mugs, cold cups, and canvas totes. This collaboration attracts more customers due to the unique designs and exclusivity.

What is the workflow process in Starbucks stores when a customer orders a coffee?

The workflow follows four phases: Request (customer places an order), Negotiation (barista suggests additions or promotions), Performance (barista prepares the coffee while interacting with the customer), and Acceptance (customer tastes the coffee and provides feedback).

How does Starbucks ensure the quality of its coffee and customer service?

Starbucks ensures quality by using random check-ins from district managers, conducting store inspections every six months, and encouraging customer feedback through social media. They also maintain cleanliness standards and ensure fresh pastries are delivered daily.

What is Starbucks' approach to ethically sourcing coffee beans?

Starbucks follows a holistic approach to ethically source coffee through responsible purchasing practices, farmer loans, and forest conservation programs. They work with certified farmers under the Starbucks Coffee and Farmer Equity program to ensure high-quality coffee while supporting sustainable farming practices.