By remaining true to core competency and a laser like focus effort towards quality; Starbucks has managed to analyze, adapt and create brand loyalty to their particular market and remained the top competitor throughout the coffee industry. Americans in general enjoy a good, hot cup of coffee to start their day. In any given business, seeing a torrid cup of coffee in a cup from Starbucks is not uncommon. Starbucks is one of the most popular coffee franchises in the world with locations in 62 countries. Starbucks has been around since the year 1971where they started off as a coffee bean roaster and retailer. This research paper will briefly explores, examine, and assess Starbucks quality marketing and management strategy. Additionally, this research …show more content…
Overview Quality for the most part is often confused with routine processes and procedures of business operation. To the detriment of many companies, the workforce becomes content with what they perceive as excellence in business. Unremitting efforts and development to quality is paramount and is a significant attribute for success. The lifeblood of one particular company in which quality is based is Starbucks. Starbucks is the number one recognized coffee outlets throughout the world. Through a series of quality control system and quality in customer service; Starbucks management proved that by committing to continuous improvement, they can remain successful even during unfavorable economic times. However, what exactly did Starbucks do to go from a small coffee bean roster company to the largest coffee-house company in the world with a market cap of 85 billion dollars. ii. …show more content…
Quality initiative According to the Seattle Business Wire (as sited in Starbucks Coffee Company, 2015), the president and CEO of Starbucks, revealed to shareholders a vision for transforming the operation of his company in 2008 which involve the customer experience and reaffirm the company’s growth potential. He revealed that a five initiative strategy that he is directing the company towards will bring the company to a new level of quality (Starbucks Coffee Company, 2015). Schultz conveyed that by keeping to their core custom, improvement, and connection to customers, they will rekindle the loyalty and fidelity of customers to the franchise (Starbucks Coffee Company, 2015). Schultz take charge attitude and a series of actions to improve the standing of his company is itself a quality initiative that sets the precedent for his employees to take responsibility for quality in every detail of their job. The Schultz initiative plan included new brewing equipment, coffee blending, precision shots of espresso, rewards card, ethical practices, brew time, online community, and
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
The structure of Starbucks business communication is exceptional. Rather you are in their store buying a Caramel Frappuccino®, visiting their website or watching one of their advertisements on television; as the consumer, the message is loud and clear. Pick up any newspaper and you are likely to find an article about the coffee giant. Starbucks pledges a commitment to their over 172,000 partners (employees) and the community. “We realize our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements in the Starbucks Experience” (Starbucks, 2008).
The key to its success lies not only in the quality of its products but also the ability to differentiate itself from the competition. With Starbucks, it has always been about quality. The company manages stringent quality control measures for sourcing the finest coffee beans, roasting processes as well as customer service and ancillary products. Furthermore, differentiation is key to market control and Starbucks is unquestioningly the most differentiated specialized coffee brands in the world. From the design of its coffee shops to the music played to the types of products offered, everything has a touch of uniqueness.
Coffee is a worldwide cash crop of which demand has exponentially increased over the years. “Coffee is (after oil) the world’s second most important traded commodity” (Cleaver 61). Competing coffee brewing companies wage war on offering the freshest, best tasting coffee the market has to offer. With such stiff competition there must be enough coffee beans deemed to be good enough in quality to supply the increasing demand. Starbucks can be considered one of today’s top competitors if not thee top coffee manufacturer presently in business. This successful company has had a huge impact on the coffee industry as well as the world. They have gone through great length to provide consumers with an excellent product as well as create a legacy that shows how to best go about running a massive corporation while keeping the environment clean and healthy.
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
Shah, A. J., Hawk, T. F., & A, T. A. (2011). Starbucks' Global Quest in 2006: Is the Best Yet to Come. In A. A. Marcus, Management Strategy: Achieving Sustained Competitive Advantage (pp. c468-c495). New York: McGraw-Hill.
Starbucks began its retention plan by analyzing their employees’ needs. The analysis drew variables of importance, such as positive culture, employee development, and benefits. As a result of the analysis, Starbucks CEO, Howard Schultz, came up with a plan to start a long-term retention program in his company. Mr. Schultz made sure that “he made it a point to put himself at the top of a respect pyramid in which he would be sure to be kind to everyone in the company with whom he interacted, with them passing on the respectful treatment, right down to the pyramid’s base”(“How Starbucks retains its employees”). The company also set up an online portal for employee development. Starbucks also launched a program to help its employees to achieve a college education. This educational program sends employees to Arizona State’s online program, providing juniors with free tuition and sophomores with financial aid. As a result of this initiative, Forbes (2015) has named Starbucks as one of “America’s Best
In 2003, Starbucks was listed as one of the Fortune 500. Despite the ongoing recession, the company had managed a 31% increase in net revenues for the year. This was reasonable, considering they only spent about 1% of total sales on marketing. All of this, coupled with the fact that they were popular with customers and employees, was a sure recipe for success.
Starbucks case study: background 1971-87; private company 1987-92. (1997). McGraw-Hill Companies. Retrieved March 20, 2007, from the McGraw-Hill Companies website: http://www.mhhe.com/business/management/thompson/11e/case/starbucks-1.html
Product quality for the Starbucks Enhanced Digital Experience Project will focus on the product’s deliverable and the standards and criteria used from the original Starbucks mobile app to ensure the product meets established quality standards and customer satisfaction.
Schultz has had a lot of success with Starbucks, not only in revenue but he has continued to expand the brands in their portfolio, increase store locations and reach all new highs. Starbucks is now an international company with more than 21,000 stores in over 65 countries (Starbucks Coffee International, n.d.). Starbucks believes their global success has a lot to do with their international partners. Schultz explained it nicely when he said, “We remain highly respectful of the culture and traditions of the countries in which we do business. We recognize that our success is not an entitlement, and we must continue to earn the trust and respect of customers every day” (Starbucks Coffee International, n.d.). Schultz continually sees opportunity and the ability for growth, with an increase in locations across the globe every year and the ability to keep up with the latest in technology (websites, online shopping, a Starbucks application with the ability to pay and reload loyalty cards on your smart phone), etc.
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
Like many other organizations, executives at Starbucks realized the importance of planning. Planning involves making sound business decisions and goals for the company, specific divisions, a store, and for individuals (Bateman-Snell, 2004, p. 108). Starbucks’ executives have defined their business with the mission statement to “establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” (Starbucks mission statement). Executives have found various ways of increasing their market by examining alternative paths to conduct their business. Most recently they are marketing to the younger generation by allowing them to download music and drink coffee at the same time. Tactical, or operational, planning involves breaking the mission statement into more specific goals and creating plans that are related to lower levels of the company (Bateman-Snell, 2004, p. 112). These plans are most often thought of by middle management and are developed into goals for sales, marketing, advertising, human resources, accounting, and financing. These goals will reinforce the company’s predetermined goal and help Starbucks achieve their desired success.