Starbucks Case Study Online Free
Review case is ultimately about improving profitability, the ultimate goal for any business. Profitability can be improved by growing revenues, decreasing expenses, or, In a best case scenario, doing both.
Christine Day, SSP of Administration, Is proposing that a significant investment In labor hours will Improve the customer experience at Cataracts’ retail stores which will ultimately Increase revenues, thereby driving profitability. I agree with Days recommendation to invest in the customer experience to grow profit.
I also think here are other opportunities for Cataracts to grow profits including further investments in technology to improve efficiency, reduction of SKU to provide more space for higher margin activities and increased distribution, both domestically and globally. Throughout the case, Day shares several programs or core values that Cataracts deems important – many of which center around the customer experience. It’s this laser sharp focus on the customer experience that supports my decision to Invest In labor hours that will ultimately drive an Improved experience.
Some examples Include: Cataracts’ Value Proposition.
There are three components in the value proposition, one of which is “customer intimacy”. Customer intimacy defines the interaction and feeling that Cataracts wants its customers to experience every time they visit. This intimacy can only be created and sustained by individuals, I. E. Labor force.
Partner Satisfaction. Howard Schulz, CEO, strongly believes that happy “partners” or employees make happy customers.
Investing in the labor force will prevent Cataracts partners from becoming over worked, stretched too thin or stressed out, all of which results in unhappy employees, leading to unhappy customers. Legendary Service. The ability to create a “memorable” experience Is what makes a vaults legendary.
Similar to the customer Intimacy value proposition, legendary service Is a direct result of the time, effort and energy of Individuals, I. E. Labor force. Further, recent survey results indicate a decline in customer satisfaction results – primarily based on speed of service.
Speed of service can be improved in a number of ways – several of which Cataracts has already initiated, including: Technology Investment.
Driving efficiency through technology is a must and Day hared how Cataracts has already improved speed by installing automated espresso machines which resulted not only in increased efficiency, but reduced waste and improved consistency. Another technological Innovation that Cataracts’ implemented to speed up the process was the prepaid card payment system.
And, more recently, Cataracts’ became an early adopter of mobile payments making It even easier (and quicker) for customers to pay for their purchases using their has taken to improve speed including removing unnecessary tasks, simplifying the process and removing bottlenecks. Given the steps Cataracts has already taken to improve speed, increasing labor hours is the next most obvious option and the quickest and easiest. Additionally, the analysis below shows a favorable return on investment.
The $40 million investment requires each store to serve 44 additional customers per week or, as few as, 6 additional customers per day to break even.