Case Study Starbucks Question 1

CaseStudy: Starbucks


Starbuckshas over the years, struggled to create value for its customers andnot just offer a cup of coffee to its customers. The company has beenable to create a good excellent experience for their customers. Theircustomers go to their Barista shops not just to enjoy a cup ofcoffee, but also to spend time with friends (Schultzand Joanne 67). Their staff also tries to remember all their regularcustomers by name. This creates a personal connection with theircustomers (Hill,Gareth and Melissa 113. This has made the customers to have anemotional connection with Starbucks as a brand. With emotionalconnection to the brand, their customers do not mind paying moresince they believe that they are getting value for their money. Thecompany has created customer value by getting to know the needs oftheir customers. This has been done through customer surveys(Hill,et al 113). The company then embarks on creating solutions to theproblems identified. The company also believes in building innovativeteams and empowers their employees to become innovative. This hasbeen done with the aim of aligning the company’s goals and corevalues to creating value for their customers.


Inorder to create a competitive advantage a company has to ensure it isefficient, encourages innovation, offer superior quality and focus oncustomer responsiveness (Campbell,Russell and David 378). In order to be efficient, the company ensuresthat it increases its employee productivity and uses fewer inputs toproduce their products. This helps lower the cost of operation andwill trickle down to affect their prices. The company also offerssuperior products unlike their competitors. By encouraging innovationand being creative, the company has been able to design new productsthat are superior to the ones that exist in the market. Throughsurveys, the company has been able to identify the needs of theircustomers and offer superior products and services to meet theirneeds. Starbucks has also improved on its customer response time.


Starbuckshas focused on creating superior products, excellent customerservice, encouraging innovation and taking good care of theiremployees.The customers marvel at the quality of coffee, they take atStarbucks and do not see themselves taking coffee from any othercompany. They also ensure they call their regular customers by theirnames and offer excellent customer response. Research has shown thatStarbucks has one of the lowest employee turnovers in the U.S. Thisdue to the various benefits they offer to both their full time andpart-time employees. Starbucks offers stock options to employees thatwork for more than 20 hours in a week for Starbucks.


Theperformance of Starbucks declined from the year 2005 after thecompany rolled out an expansion program to have 12,000 stores bothlocally and internationally (Hill, et al 113). The longtime servingcompany CEO (Howard Schultz) had also stepped down in the year 2000.However, when the company performance declined, Schultz sacked theCEO and took back his for role. Howard introduced many changes as hehoped to create value for their customers while also ensuring thecompany was efficient. These changes were aimed at regaining thecompany’s competitive advantage and ensure that the company wasonce again profitable (Schultzand Dori 63). The result of this was that Starbucks was able to growits revenue volume in the middle of the financial crisis and itsstock prices went up considerably (Hill, et al 113).


Campbell,Benjamin A., Russell Coff, and David Kryscynski. &quotRethinkingsustained competitive advantage from human capital.&quot Academyof Management Review 37.3 (2012): 376-395.

Hill,Charles, Gareth Jones, and Melissa Schilling. StrategicManagement: Theory &amp Cases: An Integrated Approach.11th ed. Cengage Learning, 2014. Print.

Schultz,Howard, and Joanne Gordon. Onward.West Sussex [England]: Wiley &amp Sons, 2011. Print.

Schultz,Howard, and Dori Jones Yang. PourYour Heart Into It.New York, NY: Hyperion, 1997. Print.