Starbucks Coffee Company - Quality Management - Case Study Example

Name of Author Professor Subject Date Introduction Starbucks Coffee Company is an American coffee company that has operations globally. It is also a coffee chain company with stores in major cities around the world. Starbucks is headquartered in Seattle, Washington and is the largest coffee house in the world with approximately 21,536 coffee stores in 64 countries (Simon 12). Its only coffee company rivaling Starbucks is the UK based Costa Coffee. Starbucks therefore has 12,218 stores in the United States of America, 1,716 in China, 1,330 in Canada, 1,079 in the Japanese market, and 808 in the UK. Starbucks stores thus serve beverages, both hot and cold, pastries, whole bean coffee, and micro-ground coffee. However, most of Starbucks stores sell food items that are pre-packaged including sandwiches. Additionally, the company has Starbucks Evening locations where, after 4pm, customers are served with beer, wine and a variety of appetizers. Starbucks products are also seasonal and unique to each store’s locality. Concept The company was founded in 1971 by three partners and the concept for the company was inspired by the desire to offer consumers high quality coffee beans as well as coffee equipment. The partners believed that there was market for premium coffee and they set off to start roasting coffee. This concept has been tweaked over the years in order to attract more customers and remain competitive (Pahl 26). The main idea is to appeal to the lovers of premium coffee and in the process the company has been able to incorporate other products and services that its customers have found useful. Starbucks stores today have an entertainment division and a Hear Music brand concept which is meant to entertain customers as they enjoy Starbucks products. This concept of appealing to every customer is what has ensured the company remains competitive in the market. In order for the company to make sure that it is meeting customer needs, it has continued to use freshly ground coffee beans that have been purchased from farmers ethically. Due to Starbucks size and the market portion it controls, the company has the buyer power of coffee from suppliers who give the company a good deal and ensure that its coffee beans arrive in time and fresh (Pham-Gia 69). Once customers order for coffee beverages, they are able to see barristers pressing fresh coffee beans to make their coffee with. The company’s vision statement is ‘To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time’, has helped it design concepts that are meant to change the experiences of everyone. Location and Planning One of the most important strategies for Starbucks that has seen the company do so well since it was founded is its location strategy. One year after Starbucks was founded, it opened four stores in the US. However, the owners realized that the only way to expand was to go to new markets and its first store outside the US was opened in Tokyo, Japan. The company’s location strategy is meant to increase the company’s customer base and consequently its market share (De 95). Starbucks therefore ensures that its stores are located in high traffic high visibility location in cities. Since Japan is one of the most populated countries in Asia, the company strategically located its new international store in this city to ensure continuity in growth. Today, Starbucks has continued to locate its stores in locations that are highly populated with working class customers who are able to afford Starbucks’ luxury products. As a result, strategic locations ensure that the company enjoys a continuous flow of new customers every day. In 2008, the company launched a campaign in its website titled My Starbucks Idea where customers give their ideas on what they think Starbuck should do. Through these customer suggestions and comments, the company has been able to improve its services massively. Its expansion plans lie squarely on the continued improvement of performance and customer satisfaction. Customer feedback thus allows the company to make decisions on where to expand depending on customer population and demand for its products. The planning of its stores on the other hand is meant to make customers feel as comfortable as possible as they enjoy their coffee (De 113). The company, through Hear Music entertains its customers at all times. The coffee stores also have Wi-Fi services so that customers can surf the internet and even do their office work in the stores. The general idea behind the planning of Starbucks coffee stores is to make the stores convenient for customers. Process Starbucks stores receive hundreds of customers a day and this means that staff has to be at its best to deliver the best service to customers. The company’s staff however cannot manage this by itself and therefore it relies on processes to make service delivery impeccable. At Starbucks, the service process uses more or less a repeatable sequence. The customer has to make a decision on what he/she wants and therefore they have a decision making power. This is because customers are allowed to make individualized orders for coffee that they want to be tailor made for them (De 75). However, the choices on customers have about customization of coffee are standardized. Once a customer arrives at Starbucks, he is greeted by the staff and then the order taken. The customer watches as his coffee is prepared and once the coffee has been prepared, the customer proceeds to pay. For customers taking their coffee in the stores, the waiters take their orders and the shortest possible time is taken to deliver the orders to the waiting customers. Both processes are designed to take the least possible time while being enjoyable at the same time. These two processes form the service matrix. On the operations service, Starbucks incorporates a small number of process pathways. Line flows are especially used by Starbucks when delivering coffee beans to its stores all over the world. The advantage of using line flows is that it ensures low work complexity with coffee being made in a sequential order. Inventory Management Since the nature of business that Starbucks operates in means that the finished products are highly perishable. As a result, Starbucks uses a P-system and an EOQ system for its inventory management at the store level. These systems allow the company to reduce unnecessary waste as well as shrinkage. The company’s inventory is then tracked by computer programming attached to the point of sale registers via closed network online delivery with Bartlett Deliveries. When it comes to ordering for coffee beans, Starbucks does this in two ways. The first is meant for the company’s retail section where it uses the P-system. Ordering is made every seven days but with three day lead time. Numerous pars are then set for the various SKUs throughout the store (Thompson and Frank 102). For Starbucks, over stock is placed at 15% to make sure that there is enough stock to be retailed to customers at any given time. The second order is made every day using the EOQ system and has a lead time of two days. This particular order is placed for all materials Starbucks needs to make drinks and pastries. At the corporate level, the company’s roasting plants use the Q-system as well as the P-system. The Q-system is used for roasting its coffee where a point of re-roasting coffee beans for the entire inventory is set. Since it takes approximately 3 hours to roast one batch of coffee, the company is able to keep up with the demand of its different varieties of coffee that it sells and consequently meet the demands of every store. The P-system is however used for other products such as bottled beverages which are bottled by Pepsi Bottling Corporation and shipped to Starbucks warehouses on a monthly basis. Layout The layout of Starbucks stores focus on the entrance zone, the interior space, interior design, the lighting and the furniture. All these are meant to attract new customers and retain existing customers (Simon 86). At Starbucks stores, the layout and atmosphere are designed in such a way that they are cozy and intimate while also providing customers their much needed personal space. The company uses a combination of couches, armchairs, coffee tables, bars, stools as well as meeting room tables. This means that the company has something for every customer visiting its stores. Customers who want a quiet place to read their favourite novel can sit in the armchairs while those who want to meet friends have the option of huddling on sofas as they converse over a mug of coffee. The lighting at Starbucks is warm coupled with background music to make customer experience one to remember. Quality Management Quality management is very important for any company that wants to remain competitive, especially in the coffee specialty industry. At Starbucks, several quality systems are in place to ensure that the products coming out of the company are of the highest possible quality. The first system involves the baristas and drinks are called ordered at the point of sale, the first barista checks it for accuracy as well as to make sure no orders are missed. The second system for quality management involves random check ins by District Managers (DM). In these visits, the DM talk to customers, watch store staff, and also do random checks on drinks to ensure consistency with company quality (Pham-Gia 46). The third and final system is the use of third party to promote quality management. Starbucks has thus employed ECOSURE, a quality management company to conduct checks on all Starbucks stores every six months to ensure that all stores comply by company quality standards. Every department in the company is responsible for quality design and customer’s needs are form the basis of all quality management design. Works Cited Simon, Bryant. Everything but the Coffee: Learning About America from Starbucks. Berkeley: University of California Press, 2009. Internet resource. Pahl, Nadine. The Idea Behind the Starbucks Experience: The Main Elements of Starbucks' Strategic Diamond. Munchen: GRIN Verlag, 2008. Print. De, Kluyver C. A. Fundamentals of Global Strategy: A Business Model Approach. New York, N.Y.: Business Expert Press, 2010. Internet resource. Thompson, John L, and Frank Martin. Strategic Management. Andover: Cengage Learning, 2010. Print. Pham-Gia, Khanh. Marketing Strategy of 'starbucks Coffe'. München: GRIN Verlag GmbH, 2009. Internet resource. Read More