Starbucks Coffee Shop’s Operations and Service Excellence

Introduction

Starbucks Coffee Shop is a coffee house that is located along Conduit Street in London. The cafe is part of a chain of coffee shops run by a Seattle-based business giant chain, namely, Starbucks. It offers coffee, cookies, tea, and free Wi-Fi connection. The shop’s customers include both men and women who range between the ages of 25-45 years. This class accounts for about 50 percent of the cafe’s total business. Additionally, the coffee shop also serves young adults aged between 18 and 24 years. This group contributes to about 40 percent of the shop’s total sales. During my visit, each employee in the coffee shop served an average of 72 customers during their shift. This observation implies an average of about 12 customers per hour. This figure is an acceptable number that allows exclusive client service for each customer who visits the shop. However, I would recommend an increase in the number of employees to augment the speed of service for each customer.

The store is designed with large windows that provide customers with a spectacular view of the street. Moreover, the store’s spacious design provides the consumers with a lounge-like ambiance with its soft and appealing seats. The plan of the store is linked to the complexity and nature of the location/environs. Reclaimed regional elements and materials are also noticeable. These materials were saved during the renovation of the shop from the previous tenant.

Starbucks Coffee shop in Conduit Street.
Figure 1: Photo of Starbucks Coffee shop in Conduit Street, London.

The restaurant/coffee shop supplies its customers with a variety of products, including delicious coffee varieties, tea products, cakes, and cookies, just to mention a few. Also, the shop offers drink-ware and gifts that are available for purchase for its customers. The shop also sells its products to offices through delivery requests by customers.

Operation Management Strategies

Product Quality

The shop offers exceptional coffee products obtained from its outstanding variety of beans. The management goes to great lengths to ensure that its beans are of the highest quality standards. This situation requires full involvement of the coffee shop’s supply management throughout the growth and manufacturing process of the beans (Starbucks 2016). For instance, the management selects a team of experts who are involved in helping farmers to grow and nurture their beans to the best quality. Additionally, the management ensures that the farmers are paid a fair price for them to remain motivated in growing the best coffee.

The coffee shop’s management also ensures that the café’s coffee is tasted on delivery to verify that it is of the required quality standards. Perception of product quality by customers is one of the essential aspects of marketing. Moreover, this element should be congruent with the actual product quality (Zeithaml 2001). These two aspects are important in meeting customers’ expectations to create their loyalty. For instance, customers will purchase products regularly from the coffee shop due to the quality that they perceive the products should have such as the satisfaction they obtain from tasting the coffee products offered by the cafe (Tsiotsou 2005).

Lifestyle Experience

The cafe provides its customers with a memorable experience. The goal is to position itself as an alternative/third lifestyle destination for its customers regularly (Said 2012). For example, the shop’s furnishings comprise comfortable seating, provision of outlets for electronic gadgets, and a no-smoking policy. These niceties ensure that all customers who visit the premise are comfortable with their surroundings. According to McCunn (2014), such a social design framework is an essential component that encourages congruence between the coffee shop and the behavioral needs of the user.

For example, a mobile worker would require productivity and deep concentrations, which the shop has met through its numerous differently sized tables, comfortable seating, and an unspoken permission that a customer can seat at a given table for an unlimited period. Additionally, the shop has facilitated a sense of control over space by its users such as the ability to turn a big chair towards the window. Ensuring that customers are comfortable while they spend time at the shop makes them stay longer. By so doing, they are more likely to buy a second or third cup of coffee and/or snack to access the free Wi-Fi or other extra services offered by the shop (Paryani 2011).

Quality Customer Service

Knowing customers’ experiences can influence their willingness to buy or pay more if the services are of quality. Therefore, the management has come up with strategies that maintain high-quality customer service. For example, they understand that someone who is paying for a product may not be willing to queue or wait for long a period before the service is rendered (Stanoeva 2015). To eliminate this case, the management has integrated a modern computerized system that ensures that the cafe’s sales process is quick and efficient. Moreover, the coffee shop’s customer service agents are also reputable for returning calls promptly to their customers.

The agents have allowed the cafe to gain customer appreciation for their effective services. Furthermore, the shop encourages its staff to maintain a high degree of professionalism during the delivery of their service. Social media platforms such as Twitter and Facebook have come in handy in relation to helping businesses such as the Starbucks coffee shop to communicate with clients as a way of acquiring the necessary feedback concerning the quality of its products and services. Through such platforms, the coffee shop can make the necessary improvements in areas that customers complain about to help it in maintaining loyalty among its customers (Wainwright 2012).

Waste Management

In the hospitality industry, waste management is part of the corporate social responsibility. In fulfilling its commitment to waste management, the cafe reduces its waste disposal through increased recycling and promotion of reusable cups among its customers (Visser 2010). However, such efforts face several challenges. For example, for recycling to be successful, it requires the proprietor, the local municipality, the barrister, and the customers to be involved.

This plan permits the stakeholders to work in cooperation to reduce recyclable material out of landfills and non-recyclable garbage out of the recycle bins. Reusable cups are an important innovation that has assisted in implementing the shop’s waste management strategy. Nonetheless, the management continues to create awareness on the importance of waste management in the context of societal benefits through promoting the use of reusable cups (Stokes and Kšster 2013).

Analysis using the Five Performance Objectives and Possible Improvements that can be made

Quality

Quality management is an important aspect of operations management of Starbucks coffee at Conduit Street, the UK. This objective comprises excellence, value, conformance to customer specifications, and the meeting of customers’ expectations (Verweire & Berghe 2004). The cafe’s management has ensured that the shop provides its customers with excellent services. To achieve this goal, the management has incorporated a self-improvement strategy, which ensures that its products and services are upgraded regularly to maintain customer satisfaction while guaranteeing its survival in the harsh competitive environment. Value is a very important management concept.

The management acknowledges that its products and services constitute its most valuable assets. Therefore, the cafe’s management has made sure that its products and services conform to customers’ expectations and perceptions in regards to value. For example, the shop’s products are priced higher compared to other coffee shops to create a perception of higher value to the targeted customers (Setijono 2008).

The cafe’s products and services are tailored to meet the specifications of the customers to foster consumer satisfaction (Caroll & Buchholtz 2011). The cafe’s design team is responsible for implementing this objective. The quality design team is tasked with the responsibility of researching customers’ needs concerning products and services. For instance, the team investigates the favorite drinks of the locals and designs the shop’s product portfolio based on the findings. Meeting this objective has allowed customers to have the product of their liking, for instance, decaffeinated, espresso, non-fat, and foam (Wilson 2014).

To improve on quality, I would suggest a reinforcement of customer communication. Specifically, I will advise the shop’s management to invest in local advertising campaigns that emphasize the cafe’s product and service quality. Such efforts will instill quality appreciation by its target customers (Kiritharan 2013).

Flexibility

Litheness refers to the capacity of the coffee shop to transform and adapt to the market dynamics. The coffee shop has selected a testing and innovations team that is tasked with ensuring the shop’s conformity to customer experience (Nieuwenhuizen, Rossouw, & Badenhorst 2008). To achieve this objective, the shop employs a three-phase process. In the first phase, the team carries out a small-scale pilot test to determine the feasibility of the pursuit of the new program. If the program passes this first phase, it then undergoes a second phase where the team carries out another test, but on a larger scale, to confirm the findings collected in the first phase. Finally, the program is rolled out to its validation phase where the team tests the new product/program in a real market environment (Borrison 2014).

Technology is also an important facet of flexibility since it allows the coffee shop to adapt to a change in the market environment. Coffee making involves the use of machines. Moreover, new technology is always being invented daily. This situation requires the coffee shop to keep up to date with the latest technology in beverage making to have a competitive advantage in the market. Hence, the cafe has heavily invested in modern technology that allows its staff to produce quality beverage products that set it apart from its other competitors in the area.

Another element of its flexibility strategy is the management’s commitment to innovation through the continuous introduction of new beverages that have the potential of attracting more customers of various age groups at different times of the day (Awward 2007). Another aspect of flexibility created by the shop concerns the design of its layout, particularly in the seating arrangements. The seating arrangement is designed in a manner that customers can create their solitary environments. It also provides room for buzzy spaces that allow social interactions (Qian 2014).

Speed

The coffee shop’s management has ensured that its delivery lead times are minimal. Furthermore, speed is also closely related to cash flow. Therefore, the faster a product or service is delivered to customers, the faster the shop will generate more cash sales. To realize this objective, the shop has incorporated a quick and effective delivery service where customers do not have to queue for a long period waiting to be served. Its fast and efficient sales service process has boosted this objective.

As part of its fast service delivery strategy, the shop has also incorporated mobile order and pay. Through this service, customers can have their coffee of choice delivered to their desired location. Moreover, the shop constantly trains its employees to provide their expected level of service. To improve on speed, Starbucks coffee shop should increase its current staff capacity. Currently, each staff member serves about 72 customers per shift. This number needs to be scaled down to less than 30. This move will allow each staff member to focus more effort on the quality of service he or she delivers to each customer over the number of customers he or she is expected to serve per shift (Murphy 2013).

Dependability

The coffee shop has earned a reputation for being dependable in terms of doing things as promised. This situation has enabled it to earn customers’ trust and loyalty (Bellgran & Säfsten 2010). One aspect that facilitates the dependability of the shop is its investment in technological equipment that enables it to produce high-quality coffee with incredible speed. Moreover, the shop has installed the latest computing technology such as FlexSim to allow it to analyze the impact of its new programs on store-services, wait time for its consumers, and other components that enhance the consumer experience.

The shop is also dependable concerning its communication systems – both internal and external. The cafe has opened up its upward communication to encourage its employees to provide feedback to the management pertaining to personal welfare matters and other issues that concern the shop’s day-to-day activities. Additionally, upward communication is a source of motivation for employees to provide better services to customers.

Workers are also encouraged to acquire feedback directly from customers concerning their rating of service during their stay at the shop (Choi 2011). As a recommendation, I would urge the shop’s management to revamp its communication system through the increased use of social media platforms. Through such platforms, the management can sample sentiments by its customers concerning the quality of its products and services. Such crucial information would allow the firm to make improvements on the quality of its products and/or services, thus enabling it to maintain customer loyalty and trust (Martin & Bavel 2013).

Cost

The objective of cost mainly entails the reduction in the operations expenditure with the overall goal of profit maximization. To have a competitive advantage, cutting costs is an important factor. The cafe’s cost-cutting strategy includes the use of aggressive negotiations for its outsourcing agreements that are aimed at bringing down the costs below the market levels. However, the shop must invest in its transportation system to not only cut the costs incurred from outsourcing this service but also boost its profit margins (Batista 2009). The shop has also formulated a pricing strategy that allows it to compensate for an increase in operational costs. For example, in 2015, the shop’s prices were up by one percent. According to the shop’s management, implementing a minor price increase was part of its pricing strategy that allowed it to maintain product value while retaining customer loyalty (Barnes 2008).

Starbuck’s Supply Chain

The operation of the coffee shop’s supply chain is based on Starbucks’ codes of conduct that prescribe the company’s commitment to welfare, improvement, economic growth, and sustainability of places and people who are contracted to produce their products and services. The supply chain management also ensures that the cafe’s supply chain network adheres to the laws and national standards that concern human rights, worker compensation, workplace safety, and proper treatment. Additionally, the management is committed to monitoring, measuring, reporting, and verifying that suppliers are compliant with Starbucks’ code of conduct. Compliance with the code of ethics is important since it creates transparency between the suppliers and the management through the promotion of ethical behavior (Chalotra 2012).

Starbucks coffee shop strictly follows ethical sourcing guidelines. The guidelines require it to buy and give out first-class coffee that is justly produced and marketed. The management evaluates farms and coffee mills through outsourcing external consultancy experts who are tasked with verifying that the farms and mills’ scorecards are of required standards. Thus, ethical sourcing requires farmers to comply with a list of specified criteria such as the quality of coffee, pest control measures, enhanced storage of fertilizers and chemicals, and observance of stringent waste management practices, just to mention a few (Smith 2013).

The shop has also maintained its reputation as a dependable provider of coffee/beverage products. This aspect is highlighted by its quick service and efficient internal and external communication. Concerning its supply chain, Starbucks ensures that its coffee is ethically obtained through regular monitoring of farms and mills that are involved in growing and processing the shop’s coffee respectively.

The cafe’s supply chain comprises four main aspects, namely, planning, sourcing, making, and delivery. The overall goal is to reduce the cost while improving the efficiency of supply. Planning involves the coordination of supply operations in all stages of the chain.

For instance, Starbucks coffee shop management has to ensure effective coordination of all processes that are involved in the supply chain such as receiving the coffee beans, storage, sifting, roasting, and quality testing, packaging, palletizing, and secondary packaging (Kreipl & Pinedo 2004). Regarding its sourcing strategy, Starbucks ensures that its farmers consistently produce high-quality Arabica coffee through responsible growing processes. Notably, tea is among the most fashionable infusions after coffee. As a result, Starbucks cafe ensures that its tea sources are ethically compliant with the global standards.

To make their coffee, the cafe’s staff members follow a strictly laid out systematic process that guarantees consistency in the coffee they make for customers. Through its coffee, customers are assured of a great experience. Delivering consistency is a great challenge facing coffee shops. For example, to make high-quality espresso, Starbucks’ guidelines require two ounces of coffee to be first brewed and drawn in 18-23 seconds at a temperature of 90 degrees Celsius and 9 atmospheres of pressure. Any variation in the conditions will affect the quality of their cafe’s coffee products (Iacobucci 2001).

Comparison of Quality Processes between Starbucks Conduit Street and Costa Coffee Lincoln Street

Similarities

Both coffee shops apply ethical sourcing as part of their supply chain strategies. For instance, Starbucks coffee continuously monitors the growth process of its farmers’ coffee to ensure that the highest standards of quality are maintained. Costa coffee is also adamant about the quality of its coffee. As a result, it has contracted Fair Trade to validate the sources of its coffee beans. This plan guarantees consistency in the quality of the coffee provided to customers.

The services of both shops are also quick and reliable with minimal waiting times. Additionally, the shops have furnished their spaces using quality chairs and tables that not only provide comfort but also allow flexibility in seating arrangements to suit specific customer preferences. This aspect has provided both shops with a loyal clientele of regular customers. Both coffee shops have also provided free Wi-Fi for customers. Hence, clients can browse the internet while at the shops. Another similar aspect between the two shops is their ingenious use of space through their quality furnishings. Both shops have furnished their premises with comfortable chairs. They have incorporated a flexible arrangement that accommodates both solitary and social settings.

Differences

Regarding ethical sourcing, Starbucks is more directly involved in the process while Costa coffee is only partially involved. For instance, Starbucks coffee shop’s management is heavily involved in the evaluation of the farms and coffee mills through outsourcing external consultancy experts who authenticate the farms and mills’ scorecards. However, Costa coffee shop’s management is less involved in the process. Instead, it has contracted Fair Trade to manage all its ethical sourcing processes. In fact, Levitt (2015) reported weak score ratings by the coffee giant concerning ethical sourcing according to the Ethical Consumer Magazine.

Conclusion

The coffee industry is one of the most lucrative businesses in the UK. With an increase in customers’ demand for places to relax or have a cup of coffee, more and more players are entering the market. Starbucks coffee shop located in Conduit Street, London, is a successful coffee shop whose performance in terms of operations management is quite impressive. The shop serves a variety of products besides coffee, including tea, beverage drinks, lunch, breakfast, and cookies. Its target customers are mainly between the ages of 18 and 45 years. This class constitutes about 90 percent of sales per day.

Product quality, excellent customer service, waste management, and provision of a lifestyle experience for customers embody the main strategies that are employed in managing operations in the cafe. Analysis of its quality management process indicates a high level of observance of excellence, value, conformity to customer specifications, and meeting of customer expectations. Furthermore, the shop’s staff members are well trained to provide quick service delivery, thus avoiding situations of long waiting times by customers. The management has also formulated strategies for reducing the cost of operations such as minor increments in product prices.

However, it will be advisable for the shop to invest in its transport system to cut down costs that are involved in outsourcing the transportation of its supplies. A comparison of operations management at Starbucks coffee, Conduit Street and Costa Coffee, Lincoln Street, indicates that both shops have emphasized ethical sourcing. Nevertheless, Starbucks’ management is more directly involved in the process compared to Costa coffee. Starbucks coffee shop located on Conduit Street is a leading coffee shop in the UK with an effective operations management strategy backed by exemplary performance in terms of quality, speed, dependability, and cost reduction. Such performance provides it with a competitive advantage over its competitors, including Costa Coffee.

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