This case talks about how Christine Day, the vice-president of Starbucks faces some important decision on improving customer service. It all started when the CEO of Starbucks Mr. Schultz went to Italy and got inspired by the coffee culture there. With that idea, he planned to open a coffee shop next to his shop which became the prototype of Starbuck Coffee shops. One of the main strength of the companies was the employees. The company refers to its employees as partners and a lot of respect is given to them as compared to other coffee stores. They were also offered stock options which resulted in 80%-90% of employment satisfaction. Its revenues came from different sources which accounted to the total revenue of the company. The different sources were domestic retail store licensing, North American food industry which included airlines, hotels, restaurants and other like. One of the other factors I though resulted in great success of Starbuck was the distribution chain. Schultz knew exactly what kind of product he wanted to offer its customer and took extra care in the distribution facility of the coffee product. This also led the company to join hands with Pepsi Co. and Kraft food to futher expands the distribution of Starbucks coffee.
To increase the customer service, Day figured out that the company needed more labor hours in order to do that. Approximately, 20 more labor hours were required at every store and as a result, the cost amounted to up to 40 million dollars. Below we will discuss some of the advantages and disadvantages on the above mentioned situation.
• As the survey suggest, the customers are complaining about the service not being on time, so this move could prove effective in eliminating time required to offer the service
• This will help cover to serve more customers and as a result, the overall profits /revenues of the company would increase
• As every investment has a risk, they could end up losing jobs if the...