Six Sigma Yellow Belt Training II
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Starbucks.pptxStarbucks
Definition & measurement
Define the problem
Need to hit the company revenue target
Increase in prices of the coffee
Measurement
Increase in prices of the coffee
One cup of coffee priced $1.95
After price increase of between 10 and 20 cents
New price of coffee up to $2.15
The major issue of the Starbucks was to meet its projected to be more than that earned in FY 2017 of $6 billion. This required that the company may increase the prices per cup. This was attributed to the management policies of the company to review its prices of coffee by a margin of 1%, 2% or 3%.
On the performance measurement, the company had been selling a cup of its coffee at $1.95 and upon the increase the price went to $2.15 an additional 10 cents that would not be felt by the customers.
2
Analysis & Improving
Analysis
The company believed in its products being addictive
There was need to change the management approach
Improving
The executive chairman, Howard Schultz stepped down
Company owned stores closed down
Introduction of new product brand
There was need to improve n revenues while reducing the costs. Thus the executive chairman aim the international market. However the company was confident that its products would not lose the value since customers would still buy. The best way was to also change the management
So as to improve the business approach, Kevin Johnson had to take over the CEO duties as the executive chairman steeped down. The company also closed its own stores as well as bringing more products for diversification.
3
Control phase
Control phase
move away from limited-time offer drinks
Focus on the international markets like China
Aim at meeting the $7 billion sale of global right
Get more ways of getting competitive advantage in the US
Here the company had to ensure that it gets a solid pricing system that would give it a permanent menu of items at prescribed prices. Also eh company had to ensure that its china market gains momentum as well as earn revenue from the sale of packaged tea and coffee to nestle. Also the company since the coffee market in the US was getting ore saturated, the company had to find ways to stay on top of its competitive advantage.
4
Problem statement and critical-to-quality characteristics
Problem statement
Hence, Starbucks faces stiff competition thus likely not to meet its revues
Critical-to-quality characteristics
Customers prefer a varying products as their needs are different and ever-changing
thus Starbucks has to ensure that more diversification of its products are met.
The US market is proving to become very competitive and the brand has to ensure that it remains viable both locally and also internationally. Thus the best thing is to look at what the customers prefer so that it may remain competitive at all times despite the increasing competition.
5
References
Cox, I., Ramsey, P. J., Stephens, M. L., Gaudard, M. A., & Wright, L. (2013). Visual six sigma: Making data analysis lean. Hoboken, N.J: Wiley.
George, M. L. (2002). Lean Six Sigma: Combining Six Sigma quality with lean speed. New York: McGraw-Hill.
Meyer, Z. (2018). Retrieved from https://www.usatoday.com/story/money/2018/06/07/starbucks-raises-coffee-prices-10-20-cents/680313002/
