- PURPOSE
The purpose of this assignment is to develop learners’ ability to evaluate a business scenario.
REQUIREMENT
Read the following business scenario of Starbucks and answer the questions that follows.
Starbucks: Big Bucks Mania
Inspired by Italian coffee bars, Starbucks’s founder Howard Schultz set out to provide a similar “coffee experience” that he went through in Italy. Starbucks coffee shop shares the same ambience that consists of music, comfortable chairs and sofas. The customers can also use the complimentary wireless hotspot. The barista seems to speak a foreign language as she rattles off the offerings: Caffé Misto, Caramel Macchiato, Cinnamon Dolce Latte, Espresso Con Panna, or a Mint Mocha Chip Frappuccino, among some 30 different coffee blends. Made from one of the highest-quality coffee available, the barista would also customize the coffee based on customers’ request. Just like in the favorite sitcom “friends”, the barista would greet them personally and know their drinks by heart. Between the customers’ laughter and cash register rings, the store is interlude with the grinding sounds of fresh coffee and its aroma every eight minutes.
The response to Starbucks coffee shop was sensational that it expanded its operations by opening over 16,000 stores in some 50 countries. It also branched out into desserts, sandwiches, books, music, and other retail merchandise. Trying to keep up with its explosive growth in both the number of stores and product offerings, Starbucks simplify the steps needed to prepare the coffee. In addition, certain processes were revamp which include grinding all of the day’s coffee beans in the morning and store them for the rest of the day increases the barista productivity and efficiency.
Starbuck’s fast service, innovative promotions has expanded its market to new customer base. The company continue to introduce new products such as the newly launched Via, its new instant coffee. Despite these efforts, surprisingly the market research shows that Starbucks did not meet its customer expectations.
Questions
What is Starbucks value proposition? What other value propositions can a coffee shop offers?
What are the customers’ expectations that would correlate with Starbuck’s value proposition?
Why do you think the customers’ satisfaction were low than expected?
Explain Starbucks focus strategy and how does the changes made influence the strategy?
