Saving Starbucks Soul - Case Study Example

The merchandise in the stores does not support the foundation of the coffee heritage Basically all the problems faced by Starbucks today are due to unromantic streamlined operations. Although the decision for automation and streamlining operations have helped Starbucks expand and improve the customers' experience in terms of speed of service and more extensive distribution(increased number of stores) these operations have also distanced Starbucks from its tradition and heritage. The use of bagged coffee has solved the problem of availability of fresh coffee beans across long distances in time but has lead to the eradication of people scooping fresh coffee from bins and grinding it fresh in front of the customers.

This, in turn, has to lead to the absence of coffee grinders and other related merchandise in the stores giving the store a sterile and cookie-cutter look lacking the warmth of a neighborhood store. As Starbucks is moving away from its heritage, it is losing its competitive advantage, a coffee experience that is unique and exclusive and traditional, and competition is taking over in terms of generating trial through awareness and loyalty of customers. According to my analysis, the first thing Starbucks should do is to improve store design which should reflect the traditional coffee experience like the wooden counters of the first store, neighborhood store look, etc.

Automation has made business more efficient, hence realistically thinking, Starbucks should not do away with it but integrate the traditional and automated process of making coffee. This means that although automated machines should be used but are the use of La Marzocca machines for coffee should also be offered to customers.Segmentation should be done on the basis of geography and culture, and flavors should also be customized keeping this in mind. More programs like "coffee master programs" should be introduced which improve both, customer satisfaction and employee motivations.

These programs also relate to rituals of the wine industry giving Starbucks an edge in developing premium brands.Sales promotion is essential for penetration among the masses. In addition to in-store merchandise, accessories like t-shirts and mugs can be used in promotions that reflect the essence of Starbucks tradition, stories and rituals on them for the costumers to take home and have a long-lasting experience.Lastly, new flavors should be introduced coupled with a story that relates to the tradition and roots of Starbucks' origin and the region it is being introduced.

Starbucks is losing its edge and as its chairman, Howard Schultz (2007) said "we desperately need to look in the mirror and realize it's time to get back the core.