Value-Added Strategies and Their Impact on Starbucks' Performance

Starbucks exemplifies the successful implementation of Total Quality Management (TQM) by prioritizing quality over quantity in its products and services. Through a commitment to rigorous inspection and continuous improvement processes, Starbucks ensures product consistency and exceptional customer experiences. The company’s strategy includes setting high standards for raw materials and engaging employees at all levels to foster a culture of ownership and innovation. Value-added strategies are employed to enhance profitability while maintaining quality, as illustrated by Starbucks’ investment in employee training and development. This comprehensive approach not only enhances business performance but also builds strong customer loyalty. The case study illustrates how integrating quality management principles with corporate culture can lead to sustainable growth and market leadership.

QUALITY
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Quality in terms of business and services provision.............................................................1
1.2 Inspection and assurance used in the quality management provided with life time in
Starbucks.....................................................................................................................................2
1.3 Range of approaches to quality management........................................................................3
1.4 Similarities and differences in methods adopted and implemented by Starbucks................4
TASK 2............................................................................................................................................5
2.1 Definition of Customer satisfaction.....................................................................................5
2.2 Continuous improvement in Quality Management...............................................................5
2.3 Types of added values gained through operation in Starbucks.............................................6
2.4 Information available to customers and importance to effective marketing. .......................7
TASK 3............................................................................................................................................8
3.1 Measurement of quality in the Starbucks. ............................................................................8
3.2 Customer needs for the organisation. ...................................................................................9
3.3 Methods of consultation and need of encouragement to the employees...............................9
3.4 Value of complaints procedures and how it is used to improve the quality of Starbucks.. . .9
TASK 4..........................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

Illustration Index
Illustration 1: Quality inspection.....................................................................................................6
Illustration 2: Continuous improvement .........................................................................................9
Illustration 3: Value Added gain in Starbucks...............................................................................10

INTRODUCTION
To have successful business every firm needs to be effective and efficient in terms of
quality. Every organization and their organizational sector consist of the quality factors which
are governed by the quality department (Sallis, 2014). Many firms spend millions to provide the
best quality product to their customers. It is required to achieve and maintain excellence,
sustainability and provide competitive environment to the competitors. Through this organization
can ensure their goods and services in consistent form. Such aspects helps the business to run in
more systematic and transparent ways. Following report consist details about the quality
management in the Starbucks which was started in the year 1998. The company is famous for its
coffee, food, hygiene, services and other benefits which are provided to the customers. I am
hired as the Quality manager in the company to improve various aspects of quality management
for achieving success in market. For this purpose various approach of quality management are
evaluated. After this benefits of quality management in the organization is discussed and
described. It contains the details regarding the customer satisfaction, values gained in the
operations of the firm. Moreover, it report contains the details about importance of the quality
control and customer services for the mentioned organisation (Goetsch and Davis 2014 ). At last,
methods are suggested to improve the performance and service quality of the Starbucks product
and services.
TASK 1
1.1 Quality in terms of business and services provision.
Quality of goods and services can be based on various aspects such as consistency,
perfection, delivery time, customer feedback and their satisfaction, usability and limited waste.
In the business organization. According to Hazen. and et.al. (2014), quality in the business can
be based on certain aspects which are production, checking, quality control, management and
assurance. Another definition of given by Jiménez-Jiménez and et.al.(2015) that quality is the
goods and services provided to the customers and for which they must be willing to pay. Service
quality is based on various aspects which are provided during the services. It can be based on
performance, luxury, consistency, communication, ethics, knowledge, patience, interactions,
actions and customer feedbacks. This are measured in terms of competitiveness as perceived
expectations (E) from performance (P). For example, in business sector, manufacturing process

there are various quality measurement through which product needs to be passed for the quality
approval. However, in service industries like Health care, hospitals, medical practise, dentistry,
eye care and many more places where quality is given more priority. Another example of service
industry is Travel – Airlines, travel agencies, theme park. Their quality is assured if their
potential customers are willing to pay for that goods and services. In food and beverage sector
quality is considered as top most priority. In this industries there are three basic principles which
are followed to maintain the overall quality. These are raw material control, process control and
finished product inspection. Starbucks is the coffee retailer company where 99% of their coffee
are ethically sourced. Under Cafe and Farmer Equity (C.A.F.E.) practises, the company is being
credited by Conservation International. The measurement or guidelines which the company must
meet are product quality, economic accountability, social responsibility and environmental
leadership. There are millions of members associated with the firm (Molina-Azorín and et.al.,
2015). The services provided by the company are highly valued and at low cost which promotes
and provides the intangible benefits to the customers. According to their customers they are
better in their financial management, leadership, brand image, services provided to customer's by
staff, location, prices and quality. The organization has gained much from it services and
products such as reputation, fame and stakeholders relationship. As per Forbes report it comes at
35th position in World's most valuable brand and 99th position in terms of market value.
1.2 Inspection and assurance used in the quality management provided with life time in
Starbucks
Quality inspection is used to review the product quality as per the factors which are
involved during the production. There are various aspects which must be emphasised during the
production of the product such as on control-elements, soft-elements and competence. Further,
quality assurance is related to improvising and preventing the mistakes/defects the time of
production or delivering services. Starbucks have adopted the standardized service in their
quality (Chen and Luo, 2014). There are three ways adopted by the Starbucks for their quality
inspection services. In the starting they use per-production inspection where raw material are
inspected. Then comes the at the time of production and at last when final random inspection.
From the growth of the coffee beans to cup at every process the quality is inspected. The
company is known for the quality of the product which are supplied to the customers.

The quality is assured by the group of 7 people who evaluate more than 75% of the
coffee which company will be purchasing or roast each year. They are known as the “cuppers”
who ensure and examine the beans. Further, the coffee is coffee quality control is done by
Baristas which is responsible for the production, service and restocking of coffee supplies. This
process is completed through integrating checking and customer surveys. Further, the process is
maintained by and governed by manager. Such assurance ahas gain more customer satisfaction
and expansion of the business in more than 75 countries (O’Neill, Sohal and Teng, 2016). The
company is accredited by the C.A.F.E. who maintains their standards at international level. It has
also achieved many position at the international level and awards through Zagat's survey as
“Number one Best Coffee” by National Chain restaurants. It is also recognised as the global
brand by Interbrand and world's most admired company.
1.3 Range of approaches to quality management.
In order to maintain the total quality management the company has used European
Foundation for Quality Management (EFQM) model. It includes many factors which are used to
maintain service and product quality. These are
 Focus on customers, competitors, management and results
 Constancy in purpose, goals and vision
 Training and development of staff with their involvement.
 Continuous learning (Griffin, 2016).
 Developing partnership and performing social responsibilities towards stakeholders.
Another is Joesph Juran's Theory which consist of improvement through planning,
improvement and control. This are used for improvement and contain following stages:
Illustration 1: Quality inspection
Sources: O’Neill, Sohal and Teng, 2016

 Identifying the strategies, opportunities and improvement methods.
 Motive and organisational structure must be there to achieve the goals.
 Training and monitoring programs must be maintained.
 Performance evaluation and project initialization.
 Keeping record for improvement and maintaining the consistency.
Starbucks uses this range of approach in order to maintain the quality of their products.
They have adopted the effective quality strategies which its competitors are unable to gain. They
are mostly focused on the taste and quality systems. To expand the product portfolio, Howard
Schultz uses the innovative ideas. The flavour of the coffee beans have marked the standards for
the company form many years. To gain such standard flavour they chose high altitudes for the
growth of the coffee beans. As there density is high which increases the flavour of the beans. At
the very next stage all coffee beans are sorted and grated according to higher standards which are
applied by the company. Moreover, to maintain the quality they have chosen various methods
like random check-ups, customer's feedbacks and everyday they drink coffee to maintain the
quality. Further, to maintain the quality in all the store they perform EcoSure check which ensure
the standards are followed or not (Zornoza and et.al., 2015). They are strongly committed to their
service by providing the genuine work, comfortable environment and quality product. Along
with this they are they also concentrate on the social impact, environment, ethical sourcing and
health and wellness. The company supports their suppliers, staff, society and customer's in all the
aspects.
1.4 Similarities and differences in methods adopted and implemented by Starbucks.
There are certain similarities and difference which can be seen in both the methods.
Similarities:
Both the approaches are made to improve the quality, standards and maintaining it for the
longer period. Such aspects helps to understand the customers, competitors and market. Further,
they support in improving the internal quality of the staff by proving training and monitoring
programs. Along with they help to keep to focus on the goals and vision of the company.
Difference:
EFQM is also focused towards the society, environment and other aspects which hare
necessary for the company while Joesph Juran's Theory only focus on the internal factors of the
company. The former one concentrate on the strategies adopted by the competitors while later

focus only on developing the staff and their services (Benavides-Velasco, Quintana-García, and
Marchante-Lara, 2014). EFQM is about the achieving goals within workplace while other one is
deals with goals with social responsibilities.
The EFQM framework is more preferred by the firm as they are also focused towards the
development in sustainable ways along with corporate culture.
TASK 2
2.1 Definition of Customer satisfaction.
Customer's satisfaction can be easily understood through the Kano Model analysis which
concentrate on the emotions of customers. There are three attributes which are followed by it.
1. Threshold Attributes: Forecast customer's expectation about the product.
2. Performance Attributes: Includes the things which increases customer's pleasure.
3. Excitement Attributes: Such elements are used to boost the competitive edge.
In Starbucks all three attributes are followed in more effective ways. The goods which
are provided by them have high standards and includes coffee, food and hygiene utensils. The
performance attributes offered at the shops are AC, appealing environment, attractive place, free
access to WiFi and cleans and waste disposal system ( Kafetzopoulos and Gotzamani, 2014).
The other excitement things includes accessible locations, global recognised brand, providing the
product which cures the headache, calm and peaceful environment, people can spend their lonely
time while enjoying coffee, food and coffee are available at the same place. Starbucks provides
intangible services of high values at affordable cost. This helps to gain more customer
satisfaction and target potential customers. Further, the staff is trained to serve the people with
proper business-ethics and corporate values.
2.2 Continuous improvement in Quality Management.
Continuous improvement process (CIP) is constant efforts of enhancing the goods,
service and process. In Japan, Kaizen is known for good change. It is futuristic approach for
systematically achieving the small targets to improve the efficiency and quality. It is the never
ending part which every company needs to adopt. The improvement are made on the input parts
by making every employee responsible for the quality of work at Starbucks. The company focus
on the training and development program along with monitoring of the employees so that
possible guidance can be provided to them. Further, customer's feedback is considered and

adopted in the company so that further changes can be made. For this purpose, the company uses
the PSDA cycle to evaluate themselves (Psomas, Vouzas and Kafetzopoulos, 2014). Along with
this, DMAIC and six sigma methods can be used where improvement is done through quality
strategy based on the data collected. Such methods will help to increase the profit and sales of
Starbucks. At last, reviewing the progress and competitors strategies can help in achieving better
quality and improved performance.
2.3 Types of added values gained through operation in Starbucks.
The enhancement which company provides before offering the goods and services is
known as value added gained. Through the continuous improvement methods company has
added those values. This values are added at every part of the operational activities. In Starbucks
there are two forms of value added activities : Primary and Support.
 Primary activities consist of various things such as logistic, operational, managerial,
marketing, service and sales. They directly add value to the product (Butler and et.al.,
2013).
Illustration 2: Continuous improvement
Sources: Zeng, Tam and Tam, 2015

 In support activities role of HRM, infrastructure and acquisition are considered.
Starbucks have brought the digital form where all the process and person involved in it
can be shown. Such things will help to improve more customer's relationship. Other than this
increase in profit, sales, image and brand recognition will be there. Employees will also work in
more effective and efficient ways.
2.4 Information available to customers and importance to effective marketing.
Starbucks is almost expanded all over Europe. There are more than 11,913 international
Starbucks store which can be easily located. They generate more than 21.32 billion U.S. dollars
as their global revenue. The coffee price started from $1.85 and varies according to Beverage
size. They offer tall, grande, Venti and Trenta to influence the customers. There are variety of
product which can be ordered by the customers such as Espresso, Coffee, Tea, Frappuccino,
Illustration 3: Value Added gain in Starbucks
Sources: De Sousa Jabbour and et.al., 2014

Refreshers, Iced Coffee, Bakery products, breakfast, lunch and snacks. The price range at
Starbucks is from $1 to $7 per one product (Zeng, Tam and Tam, 2015). The services are
available at all the week from 6:30AM to 8:00 PM except on Sunday where timing is 10:00AM
to 5:00PM. Along with this, they offer some more services and ethically serve their products to
the customers. Such information helps the customer to gain more information about the services
offered. Further, this shows the quality which is offered to them. As marketing is completely
based on customers so they must be focused in all aspects. This will influence the potential
buyers of the company and improved sales. Along with it, reputation and other consideration
provided by the company can be included. Such things will promote the healthy competition.
TASK 3
3.1 Measurement of quality in the Starbucks.
Starbucks always maintain the quality of their products. For this purpose they keep
balanced scorecard. At regular interval they take feedback from the customer's about their
services and products. They also implement those suggestion if they found can be beneficial to
the customer's. Further, for this purpose they organize executive meeting, operational meeting
and informal meeting at the certain period of time. Through this way they can classify and assess
their progress report. Such aspects helps to integrate customer's and provide the employees
chance to act. Along with this it provide development and flexibility in the organisational
structure (De Sousa Jabbour and et.al., 2014). The measurement of the quality in Starbucks is
done through the 4 aspects which are financial, internal business, customers and innovation,
learning and growth perspective. Here major objectives can be identified and particular measures
can be taken to implement them. The benefits of measuring the quality is that the company can
get more profit, sales, revenue and growth.
Along with this, they will have more fame and can understand their customers as well as
competitors in more clear ways. It will also help to identify the treats to the company and
increase the quality.
3.2 Customer needs for the organisation.
For the business success, customer needs are basic things. User survey is done through
software or web site where users are specified while non user survey are from the journal, library
and other informal sources. The company carry out this survey to understand the customers

perceptions towards the company and to take their feedbacks. Generally, Starbucks uses primary
and secondary data collection methods where information are collected from the customers
through internet, surveys, social media, reviews, news, telephonic and online interviews and
other such sources (Gimenez-Espin, Jiménez-Jiménez and Martínez-Costa, 2013). The survey
helps to identify the internal and external factors which can affect the organizational structure.
They provide the early warning to the company and provides the time period to overcome their
issues. They provide the opportunities and aspects where the firm needs to focus.
3.3 Methods of consultation and need of encouragement to the employees.
Consultation is the action of way by which formal discussion can be carried out.
This can be done through following methods such as telephonic call, face to face interviews,
survey where details can be gathered from them and changes can be made. They wanted to find
the issues or problems faced by the employees. Employees involvement in the company is very
necessary for the company (Klee and Westgard, 2014). Starbucks is known for their ethics and
corporate relationship. Employee involvement scheme can help the Starbucks to develop more
effectively and efficaciously. They can also suggest methods which can help to improve the
performance and services aspects of the company. This build mutual understanding in the
company and supports team work in the company.
3.4 Value of complaints procedures and how it is used to improve the quality of Starbucks.
Complaints are the issues faced by the customer during the service or in the product. In
order to improve quality of Starbucks feedbacks and suggestion of clients are considered as as
important factor. Complaining process enables user to express their experience about services
provided by company (Doeleman, Ten Have and Ahaus, 2014). It helps to understand demands
and needs of clients. Therefore, changes can be implemented effectively and able to attract huge
number of customers. Along with this controlling and evaluation process of organisation also
helps to identify weakness of adopted procedure. It helps to identify problems related to qualities
at initial stage only and changes can be implemented without making huge loss of organisation.
Therefore, they are considered as essential step for development of products.
TASK 4
Covered in Presentation.