Starbucks Service Analysis - Report Example

Starbucks Service Analysis AFFILIATION: For service organisations like Starbucks, a service blueprint ensures that it offers an excellent level of service to the customers. With the help of this instrument, any possible barriers are identified well in advance and points of failure are strategically handled so that the customers have a cheerful and marvellous coffee experience at Starbucks outlet. Table of Contents Abstract 2 Table of Contents 3 Service Design of Starbucks 4 Points of failure in Starbucks 7 Determination of service quality using SERVQUAL and walk-through audit 8 Use of technology in service enhancement 9 Importance of supply chain at Starbucks 9 Conclusion 10 References 11 Appendix I – Supply Chain Management at Starbucks 13 Gerald Baldwin, Gordon Bowker and Ziey Siegl started a small coffee shop in 1971 with the aim of offering the customers with having an excellent coffee experience. Since then, Starbucks has been achieving success in the coffee retailer industry as it has been introducing innovative and distinctively appealing products and services to its target market with zeal and zest (Allison, 2010). Starbucks has achieved top ranking in the industry by focusing on the development of an effective and highly integrated customer service system. It realised that the coffee shops need to provide the customers a holistic experience from a superior quality and taste of coffee to an appealing ambiance that will keep the visitors captivated with the outlet (Paryani, 2011). It realises that along with the product the customers need a good experience as well at the coffee shop. The main aim of the company is to establish itself as a brand that enjoys world class reputation on an international level. It constantly works on promoting its brand and work upon providing exemplary services on a constant note. Presently, Starbucks is offering its exclusive services in more than thirty countries worldwide and there are about 10,000 Starbucks coffee shops; more than 60% are owned by it while others are either franchised or licensed (Starbucks, 2013). Service Design of Starbucks In order to achieve superiority in its service design, the management and team designs implements a service blueprint (Michelli, 2007). This blueprint is basically a layout of the entire service process that is employed by the coffee shop for ensuring that the customers are provided the best service which is free from any negative experiences. This representation of the service process ensures that any point of failures are properly identified and eradicated before they leave a negative impact on the customer’s perception about the brand. The key success factor of the company is uniformity in its ‘coffee experience’ that is provided to all the customers internationally. The service design allows the company to ensure that the consistent ambiance is provided to the customers on every outlet of Starbucks (Tu, Wang & Chang, 2012). According to Michelli (2007), Starbucks has allocated only 4% of its total cost on the advertising budget. This shows that the employees try to create a distinctive position in the customer’s minds by offering them an enchanting coffee experience. Starbucks tries to avoid the pitfalls by ensuring that the service design has shifted its focus from simple customer service to the customer excellence. A complete holistic experience is provided to the customers at every point of interaction between the individual and the service point of the shop (Paryani, 2011) i.e. right from the moment that the person enters the place until he/she leaves. This is a very important point for service oriented organisations to consider, as soon as the customer enters the shop, the service staff should be alert and start entertaining the customers as these experiences are what makes the visit to Starbucks memorable for the customer. In addition to an exceptional interior service, the customers need to be given proper treatment on the door meaning that the car parking facility should be sufficient and there should be valet parking for the business class people as well (Bitner, Ostrom & Morgan, 2007). A service blueprint is crucial for organisations such as Starbucks as it is a tool used by the service provider for creation of a visual template for ensuring an explicit expression of their targeted goals and desires; the links are developed between the perceptions, wants and needs of the customers and company’s progression in the service delivery process (Spraragen & Chan, 2008). According to Droege, Hildebrand and Forcada (2009), in every kind of service blueprint, there are six vital standards that have to be critically monitored by the organisations for ensuring adequate maintenance of providing a superior level of service quality. All of these standards are represented in the form of lines such as line of interaction, line of visibility, line of provider influence, line of customer to customer interaction, line of provider to customer interaction and line of customer influence (Spraragen & Chan, 2008). It is crucial for Starbucks to minimise any gaps that exist between these lines. If any gap is identified between the desired service image of the company and the customer’s perception about the required service level, then it needs to be immediately addressed so that the customers remains happy and satisfied with the service quality level of attainment (Paryani, 2011). Any point of dissatisfaction for the customer would lead towards a decline in making repeat visits to the coffee shop. An assumption based service blueprint of Starbucks is shown below along with the role of each line of the blueprint and it is explained as well: Green Lines indicate those areas where some problems might arise Red Lines indicate those areas which are the fail points for the service provider (Source: Tu, Wang & Chang, 2012 a. Line of provider influence – The point of impersonal communication (word of mouth) about the provider or the activities undertaken by the brand. b. Line of customer to customer interaction – The point at which the customer level of interaction takes place. It is also known as the moment of truth because it is the primary point of contact between the shop and the customer. This is a crucial point as the service staff is representing the brand name so they should be not make any blunders while dealing with customers. c. Line of provider to customer interaction – The moment at which the customer and personnel are on the bilateral level and the differentiation between the service provider and customer can be identified. d. Line of visibility – All the important areas are evident to the customer when the service delivery process is being implemented. e. Line of internal interaction – It is the line of separation between the direct value adding and supporting activities. f. Line of customer influence – At this point, the company differentiates the autonomously planned activities from all existing activities. Points of failure in Starbucks In the Starbucks service blueprint, there are the following main points of failure that have to be taken care of when providing the service to the customers: a. On the onstage contact person step, there are two areas that can impact the service experience i.e. lack of attention by the personnel and delay in the order delivery time. The personnel should ensure that the customers are provided prompt services so that they have a good time at the outlet. Delays in orders and answering queries of customers may not leave a good image of the brand in the mind of the customer. b. The order system of the kitchen should be well-designed. When there is improper information in the system regarding the supplies, it will create problem for the back-end staff as it will be unable to fulfil the orders on time. Hence, the order system should be updated at frequent intervals so that there is never any shortage in the shop. The back end staff is relying on the front end staff and hence there should be proper cooperation and coordination between these two ends to ensure that customers are given proper orders and on time as well. c. It is important to make sure that proper database of customers is maintained so that the loyal customers are offered attractive packages for availing the services of the company on repeated basis. It is important to ensure that the IT system is up-to-date and efficient for the company’s enhanced performance. Offering customer discounts may attract the customers to visit the outlet more and more. Determination of service quality using SERVQUAL and walk-through audit As the customer demands keep on changing and they are looking for enhancement in the offerings of a company, it is mandatory for Starbucks to upgrade the merit level of the services so that it can exceed their expectations significantly (Chuang, 2007). In the service industry, two techniques are frequently employed for assessing the true picture of the organisation’s level of service i.e. SERVQUAL and walk-through audit. SERVQUAL is a method utilised by the firms to identify, understand and eliminate the gap that exists in their service proficiency level. By applying this method, the service gap can be identified explicitly and one cane address the issue accordingly. Boyer and Verma (2010) have defined the term as “a technique that is used by the companies for conducting the gap analysis between the service perception held by the customers and the organisation’s perceived service level.” This method is an extended version of RATER (Reliability, Assurance, Tangibles, Empathy, Responsiveness) Model; it ensures that an in-depth customer analysis is done to ensure that Starbuck’s service delivery process is competent and aligned with the requirements of the customers (Spraragen & Chan, 2008). Since customers are the key stakeholders in the service delivery process, the Walk-through audit allows the service provider to assess the company’s performance from the initial point of contact of the customer to the last one. Walk-through audit is an entirely systematic and organised survey that is focused on the customer with the core purpose of identifying the areas of improvement that are crucial for effective delivery mechanism (Sophrer & Maglio, 2008). In this audit, there are three key stages; the foremost one is the mapping of the customer interaction points; the second stage is the questionnaire designing on the basis of the flowchart developed; and finally, the third phase is offering an incentive to the customer for completing the questionnaire (Droege, Hildebrand & Forcada, 2009). Customer feedback is important to be retrieved as the feedback depicts the satisfaction level of the customer and also lets the organisation know the areas where improvements can be made. Use of technology in service enhancement For organisations like Starbucks, an effective IT system is mandatory as it allows it to enhance the operations and take advantage of the automated operational procedures. With the help of the latest IT systems such as SAP, ERP and others, Starbucks can ensure that it keeps track of the internal and external factors that can impact its business performance. The main advantages that are availed by such systems are prompt service delivery for the customers, proper usage of the supplies, efficient allocation of resources and adequate level of inventory is maintained. Importance of supply chain at Starbucks In every organisation, a well-integrated supply chain is a mandatory requirement as it permits the organisations to ensure that they have the best mechanism for the service delivery. The supply chain charts of Starbucks are presented in Appendix II which shows that there should be appropriate co-ordination between the supplier, distributor and outlet so that satisfactory inventory level is maintained. Supplier and distributor relationships should be maintained by Starbucks constantly as demands for the product may fluctuate on and off and these two elements must be responsive when there is a need for them. Starbucks has Enterprise Resource Planning (ERP) system which ensures that everything that is crucial for the effective supply chain is well synchronized. For instance, the main elements such as production planning, material planning, supplier responsiveness, distributor centre’s location and warehousing is strategically done by the management team (Boyer & Verma, 2010). Conclusion Hence, Starbucks has developed an effective service delivery process by making proper use of the service blueprint tool. It ensures that the service level is further enhanced and it has been able to improvise its performance by an accelerating rate. All the services are offered in compliance with the expectations of the customers. Therefore, it is vital that the service designing process is effectively done to ensure that there are no loopholes or defects in the service delivery process. Service oriented organisations need to constantly work upon their level of services and make it competitive as other competitors are working at a rapid pace in the industry. Maintaining the present customer base is extremely important for organisations, and they do this by providing excellent customer services. References Allison, M., 2010. Starbucks has a new growth strategy — more revenue with lower costs. [Online] Available at: [Accessed 26 March 2013] Bitner, M.J., Ostrom, A.L. and Morgan, F.N., 2007. Service Blueprinting: A Practical Technique for Service Innovation. [Online] Available at: [Accessed 26 March 2013] Boyer, K.K. and Verma, R., 2010. Operations and Supply Chain Management for the 21st century. Mason, USA: South-Western Cengage Learning. Chuang, Pao-Tiao, 2007. Combining service blueprint and FMEA for service design. The Service Industries Journal, 27(2), pp. 91-104. Droege, H., Hildebrand, D. and Forcada, M.A.H., 2009. Innovation in services: present findings and future pathways. Journal of Service Management, 20(2), pp. 131-155. Michelli, J.A., 2007. The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary. New York, NY: McGraw Hill. Paryani, K., 2011. Product quality, service reliability and management of operations at Starbucks. International Journal of Engineering, Science and Technology, 3(7), pp. 1-14. Spohrer, J. and Maglio, P.P., 2008. The emergence of service science: Toward systematic service innovations to accelerate co-creation of value. Production & Operations Management, 17(3), pp. 238-246. Spraragen, S.L. and Chan, C., 2008. Service Blueprinting: When Customer Satisfaction Numbers are not enough. [Online] Available at: [Accessed 26 March 2013] Starbucks, 2013. Company Profile. [Online] Available at: < http://www.starbucks.com > [Accessed 26 March 2013] Tu, Yu-Te, Wang, Chen-Mei and Chang, Hsiao-Chien, 2012. Corporate Brand Image and Customer Satisfaction on Loyalty: An Empirical Study of Starbucks Coffee in Taiwan. Journal of Social and Development Sciences, 3(1), pp. 24-32. Appendix I – Supply Chain Management at Starbucks Read More