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In: Operations Management

I need a project and well detailed report on the business performance of starbucks which will...

I need a project and well detailed report on the business performance of starbucks which will entails the criterial used for the evaluation, ability of starbucks to create value and performance metrics, how well do they make their coffee and other service they render, competative advantage over other companies and most importantly their strategy map in excecuting their plans..

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Expert Solution

Starbuck is an American coffee company. This company serves the worldwide market and is a well known company in the world. This company starts around 1972 and the age of the company is around 45 years.

Design for providing the company's services to end users: The service process is to ensure the end customers are supported for resolving the product issues at lowest cost and lowest lead time. Companies are designing service and sales process for support of their customers/consumers. The companies design their service network in the target market segment/region to ensure that their customers are supported and protected. The service network will ensure the right service support for products issues in the field/market. The starbuck has the service process to ensure their customers are well supported for their problems with starbuck products.

Our Company Service Model: Yes, the service design model works. We are working in a company of turbo manufacturing. Our company had designed a service networked for the worldwide market for supporting customers for the turbo problems. We had service outlets which can support the product issues in the field in low cost and at right time.

Yes, it is a conscious design, because it is designed in such a way that the end customers will not be affected due to the need of support from the organization. The service network is such that the repair support and spares are available as and when needed for the end customers.

Improvements : The current service support process is good , but still it can be improved by having following additional features.

  • Online complaint reporting and assigning for service support.
  • Periodic updating of service instructions on product management to customers.
  • Improve the availability of spares and kits in the market.

Toll free number for customer support and help in product management in the field

Service Flow chart / Blue prints : These are the standard service and repair documents being released at the organization for the customer supports in the field. These clearly explain the processes, tools, operator skills, method and all requirements for carrying out the service events.

How Good: Yes, these are good enough, for carrying out the service repair event for the product in the field without any major technical support from the experts.

Feedback Mechanisms : The feedback mechanisms are available to capture the customer feedback on product use after the product repair events. Customers can provide their feedbacks post service events via following methods

  • Written feedback from customer at the service outlet.
  • Survey method for customer feedbacks
  • Interview method for feedbacks.
  • Questionnaire reply from customer son service supports

Pain Points of Customers: Following are the key pain points of customers as below

  • Product is not reliable and faces many issues.
  • Service call-log process is not effective.
  • Service response is not effective
  • Spares are not available on time.

Improvement in service process :

  • Improve product reliability
  • Improve effectiveness of the call-log process
  • Improve the service response time
  • Ensure availability of spares and maintain the minimum inventory of spares.

Strategy of Star Bucks -

As per Ansoff’s matrix, the strategies for business growth are mainly in two directions, as below

  1. Product diversification
  2. Market development.

We need plan two alternative strategies for the Starbucks business which are feasible, suitable and acceptable to the business.

  1. Strategy I- Enter the Starbuck business into the prioritized developing countries.
  2. Strategy II - Develop additional product options for the existing business set ups.

Strategy 1- Enter the Starbuck business into the prioritized developing countries: Since the Starbuck is a global company and surviving in most of the developed countries. Now the further development growth available is the developing countries in the world. The Starbuck to define the criteria for developing countries and make a prioritized list of countries, where they can initiate the business with least input cost or where the existing resources can be explored for business growth. Thus this will be the new market development approach for the Starbuck coffee business.

This strategy will be feasible, suitable and acceptable, as below

Feasibility: This will be the feasible option as developing countries have high population and more attraction towards US /Europe products.

Acceptability: This strategy will be acceptable as it will expand the market for the business with appropriate earning opportunities.

Suitability: This strategy will be suitable as Starbuck is already has expanded its business in various parts of the world. It will be just addition of another set-up with existing processes in the developing countries.

2 Strategy II - Develop additional product options for the existing business set ups - This strategy will help to add additional coffee product in the existing business set ups, so that sales can be increased at the existing set ups. This strategy will help for increase in revenue or profit for the existing set ups.

This strategy will be feasible, suitable and acceptable, as below

Feasibility: Starbuck can easily develop additional suitable coffee products options which can be sale in the existing market.

Acceptability: It will be acceptable as selling additional product options from the same business set-up will not add much cost to the business and will be acceptable to the management.

Suitability: This strategy will be suitable as it is just addition of product options in the existing set ups.

Best Strategy: Selection of best strategy can be done based a below selection criteria as below

Selection Criteria

Strategy-I (Developing Countries)

Strategy-II (Product Options)

Business Growth (High (9), Low (1), Medium(6)

High (9)

Medium (6)

Expenses (High (1) , Low (9), medium (6)

High (1)

Medium (3)

Resources Engagement (High (1) , Low (9), medium (6)

Medium (6)

Low (9)

Profit

High (9)

Low (1)

Feasibility (High (9), Low (1), Medium(6)

High (9)

Low (1)

Total

34

20

So based on the above selection criteria matrix, the strategy-I is better option for the business growth. This looks to be better option, as the developing countries are a large/huge market for the business. If the Starbuck makes the good entry in this segment, then they can get the approach for capturing the world market for their business.


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