Business Analysis: Starbucks

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Business Analysis: Starbucks After evaluating (Exhibit A), Starbucks should invest $40 million per year to increase labor hours per store in order to solve the problem with the quality of service. Starbucks should also set up an internal strategic marketing team. This will allow Starbucks to have a proactive feedback of customer satisfaction and hence faster improvement. Labor cost is high for Starbucks' North American operations. To keep labor cost at reasonable level, Starbucks should reduce waste in making drinks, keep consistency in drinks, and improving productivity. The company needs to invest more money in automated espresso machines. Currently, sales of coffee beverages account for most of total sales, and therefore, Starbucks should increase its sales on food items and whole-bean coffees, and develop non-retail sale channels, which do not require as much special training as making coffee beverages.

Due to an increase in number of Starbucks' customers and highly customized drink demand, the workload per worker is very high. This fact results in a decrease in service time and conversation between Starbucks baristas and the customer, and more stress on baristas. Moreover, research found that a large number of customers emphasize that "treated as a valuable customer", "friendly staff" and "fast service" are the most important factors in creating customer satisfaction. Investing $40 million annually will help eliminate the problems of service time and customer satisfaction by reducing the blockage of labor time and help increase customer satisfaction at all levels.

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