business assignment
z9k8v53
Starbucks.pptxAgenda
Overview
Problem Statements
Strategic Options
Strategy Recommendations
VRIN Framework
Specific Plans
Conclusion
*roastery @ new york
Recommendation - talk about chosen one last
Overview
About SBUX
“To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” (Mission)
“To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” (Vision)
The Four Pillars of SBUX (Strategy)
Offering ‘third-place’ experience
Selling coffee of the highest quality
International market expansion with the focus on emerging economies
Integrating technology into various business processes
About SBUX
Founded by three partners who attended USF
March 31st 1971 - First Sbux @ Seattle, Washington
1996 - First abroad location @ Tokyo, Japan
Jerry Baldwin, Zev Siegl, Gordon Bowker
As of Now
6 continents, 78 countries
29,000+ locations
14,606 stores in the United States
14, 718 international stores
Currently, Starbucks has 59% market in the coffee industry
Conflicts @ SBUX
Problem Statement #1
California Judge rule Starbucks have failed to prove significant health risk with their procedure of roasting coffee which can lead to major financial risks.
Cancer Warning Signs
Proposition 65 - requires coffee retailers to warn customers about chemical
Acrylamide - chemical produced after roasting coffee beans - high doses can cause cancer
Failure to warn = Fines up to millions $
WHY NOT?
Not specific (other companies involved)
Minor Issue
Common
Lots of places and items has warning signs but are ignored
Loyal customers aren’t phased
“A cancer warning would be annoying but wouldn’t stop me from treating myself to three lattes a week.” -Darlington Ibekwe, Lawyer in LA
WHY NOT? = why didn’t the group choose this problem statement to focus on
Problem Statement #2
Starbucks fail to recognize the small, local businesses that provides low-cost, but high quality products thus competing against the corporation.
Mom & Pop Competition
They can offer lower coffee price and provide similar coffee drinks
They have local support
Some coffee shops has more variety (Iron Horse - coffee cocktail)
WHY NOT?
Not ALL mom & pops has cheap prices
Convenience is huge factor for Sbux
Pricing
Time (24 hour stores)
Multiple locations
Iron Horse Coffee Bar @
Maiden Lane, SF downtown
*pricing few cents more than Sbux
Alex
Problem Statement #3
While fulfilling the 4th pillar (technology integration), Starbucks failed to pay close attention to the other three pillars resulting in a decline in customer loyalty.
Technological Aspects
Mobile & Online Pay
Bottleneck - customers orders multiple drinks
Slow down service
Long lines discourages incoming customers
Third-Party Delivery
UberEats & Postmates adds on to the traffic
Increased traffic means longer waits for non-online customers
Alex
Chosen: Technological Aspects
Why?
Hits ALL FOUR of Pillars
Customer, Quality, Expansion, Tech
Customer is priority (Mission)
Society is technology-driven
(ie, self-driving cars, Amazon Go)
Customer - service priority
Quality - rushing = bad quality
Expansion - in order for a company to expand they have to keep their loyal customers and have a good reputation
Tech -
Strategic Options
Strategic Option #1
Starbucks R&D focus on implementing a completely separate bar for online orders.
Mobile & Online Bar
Summer 2019 - Salesforce Park opens and they want to implement this concept
Separate bar decreases customer waiting time
WHY NOT?
Costly
Time consuming
Resources
New appliances
New furniture
Need for space
Mobile orders aren’t as consistent as visiting customers -> wasted labor for workers on mobile bar
Strategic Option #2
Mobile menu should be limited on certain drinks and pastries in order to lessen the online orders thus increasing in-store customer service.
Limited Menu
Can only order certain products
Only orders allowed are simple fast to make orders
WHY NOT?
Customer complaints
Low variety on online orders might decrease use
Millennials like the variety drinks more than the normal ones
Strategic Option #3
Starbucks should remodel their busy store locations by adding new physical concepts that can aid consumer satisfaction in order to maintain loyal customers.
Main Concepts
Express Lanes
have a separate line for single vs multiple item orders
During peak times (lunchtime + after work)
Role Clarity
Increase employee counts per shifts
Designate specific amount of employee to prioritize online orders (both mobile and 3rd party)
Technological Visuals
Have a monitor with names in order and number of drinks ordered
Kaiser and some restaurants with queue visuals
Hopeful Changes
Increase more men power = more people to provide service
80/20 Rule
20% serve mobile service (priority)
80% serve in-store customers
Aim for 100% customers satisfaction
Essentially increase customer satisfaction and prevent losing more loyal customers.
outcome that we want
VRIN Framework
1.Valuable 2.Rare 3.Imperfectly Imitable 4. Non-substitutable
VRIN Framework
Execution
Implementation Plan
Experiment strategy in busy and average stores
Express Lanes
Role Clarity
Technological Visuals
Customer satisfaction surveys
Implement in specific Starbucks
Busy and stores with slow traffic
Express Lanes
Separate lines
How?
Survey
Implement express lanes based on results
Peak hours
Morning
Lunch
After work-hours
Express Lanes - have a separate line for single vs multiple item orders
Survey to see if this is really helpful would this be a good experience for them
Role Clarity
Increase employee count per shift
Designate employees for mobile orders and 3rd party orders
Role Clarity - Increase employee counts per shifts; Designate specific amount of employee to prioritize online orders (both mobile and 3rd party)
Add more employees per shift (1 or 2 more)
Have mobile order employees prioritize solely on mobile orders
Technological Visuals
Install monitors
Avoid crowding at pick up
Include:
Name
# of drinks
Timer
Technological Visuals
Have a monitor with names in order and number of drinks ordered
Conclusion
