ENT301 Report: Comparative Analysis of Starbucks and Caffe Nero

This report presents a comparative analysis of two prominent coffee shops, Starbucks and Caffe Nero, based on observations made at their London locations. The report meticulously examines five critical aspects of their business models: staff management, customer demographics and experience, inventory management, product offerings, and pricing strategies. The analysis includes detailed observations regarding staff numbers, shift patterns, and customer service experiences at each location. It further delves into the inventory of food and beverages, including the best-selling items and potential waste management strategies. A comparative review of product offerings highlights the variety and quality of the menus, with a focus on promotional techniques. The report also provides a critical evaluation of the pricing strategies, contrasting the affordability and value perception of the products offered by each coffee shop. The conclusion draws insights from personal experiences and observed outcomes, ultimately suggesting that Starbucks demonstrates superior management practices. The report provides detailed insights into the operation and performance of the two coffee chains.

Running head : ENTREPRENUERSHIP
ENTREPRENUERSHIP
Name of the Student
Name of the University
Author Note

Executive Summary
The report throws light on the comparative analysis between two coffee shops named Starbucks
and Caffe Nero. The chosen outlets were the ones located at London. The report follows a
structured format whereby it has introduced and provided a brief overview of both the
companies. The section followed by that states the five important aspects of the business that
comprises of the price, customers, inventory, products and staff. The personal experience gained
from the visit has been stated along with a contrast observed. The conclusion states that
Starbucks is a better managed outlet.

Table of Contents
Introduction......................................................................................................................................3
Comparison......................................................................................................................................3
Staff..............................................................................................................................................3
Customers....................................................................................................................................4
Inventory......................................................................................................................................5
Product offering...........................................................................................................................7
Prices............................................................................................................................................9
Personal Experience and Outcome................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
Bibliography..................................................................................................................................15

Introduction
The given report is a comparative analysis between two coffee shops. The coffee shops
chosen for the purpose of analysis are the Starbucks and Caffe Nero respectively (Starbucks
Coffee Company 2018). These brands are multinational companies who serve thousands of
customers every day. For the purpose of this assignment the cafes located at the city of London
were visited (Caffe Nero 2018). The starbucks café visited was in Upper Street and the Caffe
Nero was present in the Firth Street branch. The report throws light on the five aspects of the
business which are Staff, Customers, Inventory, Product offerings and the Prices. Different
experiments were conducted at the cafes and have been given in the report. It conveys about
similar yet different experiences encountered at the café during our educational visit.
Comparison
Staff
Starbucks
The number of employees present in the Upper Street branch was around twenty. The
numbers consisted of 12 women and 8 male members. The staff works in rotational shifts with
the first shift starts from 8 in the morning to 4 in the evening, whereas the second shift starts
from 4 in the evening to 10 at night. At a certain point of time the café sees to it that there is a
presence of around 10 staff members’ at least. Half of the staff says behind the counter engaged
in the preparation concept with respect to the orders received from the customers and the other
half are engaged in serving the customers and taking the orders. There was a manger looking
after the well being of various customers. The cafe size was around 5000 square feet which was

quite spacious. However, due to the high footfall, I believe that the company should have
employed more staff so that they could have been accommodated easily.
Caffe Nero
The number of employees who were present in the Firth Street branch of the café had
around 15 members. The staff had 4 women and 11 male members. The staff has to work the
whole time in a single shift as there is no double shift present. The staff members get two offs in
one week and hence there are at least 10 members of staff present at all times. However, the staff
is not divided as such like that of Star Bucks and any staff member can do any aspect of the
work but the main aim of the caffe is to see to it that the customers are not kept waiting and their
orders are met with sufficiently. However, the staff was not courteous and due to the small space,
the number of staff was extra and was not required.
Customers
Star Bucks
At the time we visited the café, all the tables were already occupied and the staff
members were in a hustle to manage all of them. According to my observation, around 250
customers would have visited the given café (Starbucks Coffee Company 2018). According to
me an average coffee at Starbucks costs around 5£ and if we assume that the customer spends
around £8 in the cafe then, the daily sales is 2000£. The seats at Starbucks, according to me are
sufficient to accommodate the required number of consumers. However, the customers who visit
the café have a certain presumption in mind hence; they are not being able to get satisfied
because of inadequate staff attention which they are receiving.
Caffe Nero

At Caffe Nero, the number of customers at the time we visited was around 10. I
personally found the place extremely small and congested. The customers who were present at
café were complaining about the toilets. They complaint that the toilets were not right and that
they were broken and had to be cleaned properly. Each meal at Caffe Nero costs at 5£ and the
number of customers visiting the particular cafe would be around 150 hence the company was
earning around 750 daily.
The seats were not sufficient to accommodate the customers who were visiting the cafe.
The staff was not courteous enough and the café received bad reviews. According to me, the café
should try and keep adequate staff and seating system to keep up with the brand name of the
café. Caffe Nero is one of the most sought after cafes around the globe and according to me, if
the firm is unable to keep up with the brand name then; the footfall of the customers has high
chances of reduction.
Inventory
Starbucks
The inventory of food items available at Starbucks is quite varied. The café serves
Sandwiches, all versions of coffees, all variants of tea, breakfast menu, bagels, waffles, Yoghurt,
Ice-cream, Patties, Protein boxes among all others. All these food items need to be fresh and
made before the order is processed. Starbucks makes use of their authentic coffee machine to
make the different coffees available and all the stated items are perishable. The fastest going
items on the menu are as follows:
 Caffe Americano
 Flat White

 Iced Skinny Mocha
 Blonde Vanilla Latte
 Caffe Mocha
When we were present in the given café, then the customers where mostly ordering Caffe
Mocha and Sandwiches. Following the same style, we ordered the same. According to me, the
size of the inventory is quite large
And many items in the menu do go waste at the end of the day. However, Starbucks
follows a policy in which it believes that the company needs to cater to all the needs of a
customer and believes that it should never deny the person of anything they desire.
Caffe Nero
Ignoring the size of the cafe at Firth Street, Caffe Nero has a large inventory which
ranges in a similar menu option like that of Starbucks.
The menu consists of coffees, shakes, sandwiches, potatoes, cupcakes, yoghurt. The
items that move extremely fast are as follows:
 Coffee Caramel
 Iced Latte
 Mocha
 Peach Lemonade
 Strawberry and Vanilla
 Tarts
 Muffins
 Sandwiches
 Smoothies.

Certain customers were complaining that the customers were not being served adequate
products and that they were being offered stale products. Just like star bucks, the inventory of
Caffe Nero is perishable and hence it is necessary for the firm to have a limited menu. Although
the given café is located in an area which is extremely busy as the area is a tourist spot, the
shabby condition of the café causes various customers to not visit the given café and due to this
many of the items on the menu generally go waste.
Product offering
Starbucks
Starbucks has been successful in keeping up to its expectations and offers the different
customers a large menu which makes the customer choice and decision very tough. As
mentioned in the earlier point the menu offers varied choices which are always available and the
quality of the product is also quite adequate. Therefore I believe that the choice available to the
customer is quite enough. Starbucks has a trend of launching new products very often and it
advertises these products through word of mouth. At the billing counter, the staff tends to offer
the product advertisement to the customer by suggesting the choice of product that needs to be
adopted by them.
Figure 1: The menu at the café (Source: Starbucks Coffee Company 2018)

The given menu has been clicked at the cafe. As it can be seen, that the menu has been
sorted carefully. Near the entrance of the cafe the daily offers are displayed.
Caffe Nero
Caffe Nero also tends to order the customers a large menu with a variety of options. Te
Company has its business operations strategy quite similar to that of Starbucks.
Figure 2: The billing center at Caffe Nero (Source: Caffe Nero 2018)
However, the display of the products I believe was not up to the mark. All the cookies
and muffins were not placed adequately around the cafe. They were displayed in a haphazard
manner. Due to this, the different customers who were the visitor of the given cafe for the first
time would not be able to get an accurate idea of the offerings as made by the company. When
we asked the staff about what was new, it was then the lady behind the counter, gave a nod and
did not reply properly. Hence, from the staff`s side there was almost no effort to advertise the
products of the company.
However, Café Nero engages in social media marketing to promote the products.

Prices
Starbucks
The Prices of the products at Starbucks are quite high even according to the global
standards, the price of a mere coffee is around 4-5£ which is quite expensive. The food options at
Starbucks, are although quite good and of optimum quality and quantity, but they are priced
extremely high. Whenever a student or a tourist will plan to visit the café then they will find it a
pinch on their pocket.
Bargaining is not a policy of Starbucks. When we visited the cafe, a customer was not
carrying enough money and tried to bargain at the café, was completely refused by the staff at
the counter and then he stated that bargaining is not a business policy and that he could be
offered a muffin instead as a complementary service. The menu of star bucks has been attached
to reflect upon the prices. As stated earlier, a meal at Starbucks would cost around £8 per person

Figure 3: The price of products at Starbucks (Source: Starbucks Coffee Company 2018).
Caffé Nero
The prices of the meals available at Caffe Nero are quite reasonable as compared to that
of Starbucks. Although the brand is a global brand, but the prices offered by the company are
very pocket friendly (Caffe Nero 2018). According to me, the prices are quite reasonable but the
company needs to see to it that they are able to match this price aspect with the quality aspect.
The customers do get attracted to the different prices; however, they tend not to get attracted
towards low prices and low quality. If the quality and service by the different staff is matched up
with the quality, then the business will be able to prosper.

The price menu of the café visited by us is given as follows:
Figure 4: Caffe Nero`s menu (Source: Caffe Nero 2018)
As it can be witnessed, the prices are very reasonable. Talking about the bargaining
aspect, we tried to bargain with the staff and they provided us with a discount of 5%, which was
quite unexpected. I believe it was due to the fact that there were various customers present in the
given queue.
Personal Experience and Outcome
The following services were tried at Caffe Nero as well as Starbucks: