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Unformatted text preview: the company promised with its value proposition and which brought a lot of the loyal customers to the business did not exist any more. The beverage customization, the addition of new items on the menus and the rapid retail store expansion had an adverse effect on the other two important aspects of the value proposition. Even though, there is no specific evidence cited in the case regarding the quality of the coffee, I find it almost impossible for a company to experience a more than 3000% expansion in its stores within 10 years and not deteriorating at least some of its product quality. As I do not have enough data to support this, I will make the assumption that the addition of the new items had an effect in sacrificing at least some of the quality that the Starbucks brand gave to the consumer. As Starbucks was “caffeinating’ the world, it meant that product sales increased throughout the company. Statistically speaking, the probability of a product being sold lacking the necessary quality was highest. In the mind of a Starbucks consumer or any consumer a bad experience sticks out. The other component of the value proposition, the service was also hurt. The customer intimacy that helped build the loyal customer base of Starbucks did not exist any more. Starbucks proudly stated that they delivered on service and that they only hired partners that had the ability to balance hard and soft skills and deliver on that service. As the customer base was growing and the complexity of the drinks increased it seemed almost impossible for the partners to deliver on those soft skills. The customized drinks slowed down the process of delivering the beverage to a consumer and added tension to the partners, making them lose on their soft skills. A lot of the service value was also lost on the inconsistency. The saturation of markets with retail stores meant that customers might purchase their coffee from different Starbucks stores that were convenient at the time of purchase. If...
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This document was uploaded on 04/02/2014 for the course ECON 101 at Sant'Anna School of Advanced Studies.
- Spring '14