Starbucks Case Study: Service Analysis, Innovation & Recommendations

This case study provides a comprehensive analysis of Starbucks' current service provision, market position, and innovation strategies. It examines both qualitative and quantitative data, including social media statistics, global coffee supply chain practices, technology adoption, and financial performance. The analysis reveals strengths such as a strong social media presence and ethical sourcing practices, as well as weaknesses like underutilization of YouTube and declining financial ratios. Based on these findings, the report recommends increasing investment in technology like blockchain and machine learning, fostering a culture of innovation by engaging employees in decision-making, and creating unique content for YouTube to enhance its online presence. The study concludes by emphasizing the importance of strategic planning and innovation for Starbucks to maintain its leading position in the global coffee market. Desklib offers a wealth of similar solved assignments for students.

CASE STUDY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Current service provision of Starbucks .......................................................................................3
Analysis of Quantitative data of Starbucks organization.............................................................4
Recommendation.........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Innovation is defined as introduction of something new and creating new products by the
company and present in the market with the motive of expanding its business and to increase its
market share. Successful innovate allow to add value to the business in order to increase the
profits of the company. It is also observed that in order to grow, it is necessary for the company
to bring new and advanced products in the market and also according to the needs and
requirements of the customers. The present report covers the qualitative and quantitative analysis
of the chosen company i.e. Starbucks in order to analyse the current service position and also its
current market position.
MAIN BODY
Current service provision of Starbucks
Starbucks is an American Multinational chain of coffeehouses headquartered in Seattle,
Washington and is considered as world largest and leading coffeehouse chain. It also provides
various services to its customer by considering the current market position and also the
requirements of the customer. The brand has always targeted the upmarket customers by
adopting the premium pricing strategy in those market they operate. The company is operating
its market by delivering the best and premium quality of the services and according their
requirements(Areiza-Padilla,and et.al., 2020). The company also implements various action
plans and instructing the team to fulfil the needs and requirements of the customers. They sell a
numerous variety of coffee and tea products and also have licensed their trademark through
various channels such as Grocery and national food service accounts.
The company also serves coffee and tea beverages and various other food products
which include pastries, sandwiches and other lunch items. The aim of the company is to become
the leading brand retailer of finest coffee in each of their target market. The company has entered
into online delivery for its products in order to give better experience to its customers. They also
accept the online orders for both delivery in store pickup. In order to expand its services and
business, the company also uses the medium of major food delivery services that includes
Postmates and Ubereats(Gupta, Nagpal, and Malik, 2018). Being one of the leading coffee
brands has greater customer base that can be an advantage for the company to diversify its
market. One of the most attractive services , the company offers to their customers a very

attractive services by mentioning the name of the customer on their coffee mugs which is
attractive for the customer and also one of the best marketing strategy to attract the customers.
On the other hand, the company also help in providing financial support and training to their
employees and through financial support help so that farmers stay loyal to their brand and they
can serve their food and drink that is unique in taste that makes it different from other brands in
the market(Lee, Jung, and Moon, 2021.). In addition to this, the company also suffers from
technological issues that can be a problem which can be barrier in its growth which also hampers
its growth in the market. Furthermore , the company can suffer a drawback of selling coffee that
is quite expensive than other brands selling the same product.
The menu designed by the brand is sometimes difficult to understand due to the
numerous variety of the coffee which becomes complex for the customer to decide . In order to
grow and diversify its market it is mandatory for the company to focus on building its brand
reputation by offering high quality services to its customers that will help the company to
understand the current market trends and make innovation in its products accordingly(Tintara,
and Respati, 2020). Every company has its own way to conduct its business but it depends upon
the management the type of services provided by them as it will helps to increase its customer
base and also helps in expanding its business.
Analysis of Quantitative data of Starbucks organization
Quantitative data analysis is an analysis method through which the number based data and
information of company such as Starbucks is analysed. This is one of the best way to easily
convert the data into information without losing the meaning of data.
Social Media Statistics of Starbucks:
Particulars Measure (likes, followers, fans, subscribers)
Facebook 37.2 million likes
Twitter 11.9 million followers
Instagram 16 million fans
YouTube 153k subscribers

Figure 1: Graphic presentation of Social Media statistics of Starbucks
On the basis of above information, it is analysed that Starbucks is basically 4th top ranked
beverages brand with the highest worldwide Facebook fans and like of 36 million and 37.2
million respectively. Further, it is also analysed from the qualitative research and 2019 online
survey among American consumer, 18% of the people all over America purchase the product of
Starbucks after visiting its Instagram advertisement (122 STARBUCKS STATISTICS: 2020/2021
GROWTH, INNOVATIONS, & SUSTAINABILITY. 2021). This indicate that Starbucks
organization has uses social media platform in order to gain, attract and retain large customer
base not only in local market but also at international market. However, on the other hand, its
YouTube presence is quite poor as compared to other social media presence which indicate that
company are not focused towards its YouTube platform (Kalra and et.al., 2018).
Starbucks Global Coffee Supply Chain:

Source: Starbucks Annual report 2021
The above quantitative information of Starbucks indicate that the company basically uses
various ways to protect planet. The above data indicate that 99% of the Coffee used by Starbucks
for their benevrages are ethically sourced. Further, it is also analysed from the research that in
the year 2019 over 340 million Starbucks stores were powered by 100% renewable ennegy
(Duncza, 2021). In the year 2020, the company hire its first chief sustanability officier in order to
enhance its sustainable supply chain and protect the environment or planet with the help of its
customer, partner and industry experts.
Technologies employed by Starbucks:
It is also identified from the research that Starbucks basically uses AI, Big data, cloud
computing etc. technology in order to enhance the customer experience, store design, supply
chain, beverages development etc. However, it is also identified from the research article that the
lack of investment in the technology has become challenge for the Starbucks to restore the
confidence of customer after so many blogger attacks (122 STARBUCKS STATISTICS:
2020/2021 GROWTH, INNOVATIONS, & SUSTAINABILITY. 2021). The poor security of
Starbucks has created a challenge for the company to protect its customer data on its app and
websites.

Financial Statistics of Starbucks:
Particulars 2020 2021
Revenue 29060.6 23518.0
Operating Profit 4872.1 1561.7
Net Profit 4200 924.7
Total assets 31392.6 29374.5
Current liabilities 8151.4 7346.8
Current assets 9756.4 7806.4
Return on capital employed 304% 340%
Net Profit Margin 14% 4%
Current ratio 1.20 1.06
Figure 2: Graphic presentation of financial statistics of Starbucks 2021 and 2020

On the basis of above table and its graphical presentation regarding financial ratios, it is
identified that the current ratio as well as net profit margin of Starbucks is increasing in year
2021 as compared to previous year of 2020. It means the ability of company to earn higher return
from sales and pay off current obligation with the use of only current assets are improving.
However, on the other hand, it is also analysed that the return on capital employed of company
are poor as compared to previous year which they have to enhance via proper strategy adoption
(Alkaabi, Alkuwaiti and Nobanee, 2021).
Recommendation
On the basis of above information, the following action is recommended to Starbucks
organization to became more innovative and achieve growth:
 Firstly, it is recommended to the company that they should increase their investment in
technology such as block chain and machine learning along with the cloud computing. It
is because this helps the company to understand its customer and provide the solution for
the same. This will ultimately enhance the customer experience and organization growth.
 Further, it is also recommended to Starbucks that they should create a culture of
innovation in order to became innovative. It means the company should engage its
employee in the decision-making process in order to grasp new and innovative ideas for
the same. Also, they can provide reward to their employees for their innovative ideas and
good performance.
 Lastly, it is recommended to Starbucks that they have to create unique content for their
YouTube platform in order to enhance their followers. Also, the company need to
enhance their profitability and reduce cost for improving their ROCE (Tsai and et.al.,
2020).

CONCLUSION
From the above report it can be concluded that in order to expand its business it is
necessary for the company to plan and make modifications in its strategies that will helps in
making innovation in their products. The report summarize the various current services offered
by Starbucks in order to attract its customer and to achieve the worlds leading retailers in selling
variety of food and drinks. The company is famous for selling numerous varieties of coffee. The
company has introduced various new services in its business by evaluating the current market
position and made strategies accordingly. Furthermore, the company also summarize the analysis
of Quantitative data of the organisation in order to find out the current position of the company
in the market.

REFERENCES
Books and journals
Alkaabi, A., Alkuwaiti, M. and Nobanee, H., 2021. Financial Statement Analysis of Starbucks.
Areiza-Padilla,and et.al., 2020. Ethnocentrism at the coffee shop industry: a study of starbucks
in developing countries. Journal of Open Innovation: Technology, Market, and
Complexity. 6(4). p.164.
Duncza, L., 2021. Starbucks Social Media Strategy Report.
Gupta, P., Nagpal, A. and Malik, D., 2018. Starbucks: global brand in emerging
markets. Emerald Emerging Markets Case Studies.
Kalra, G. and et.al., 2018, September. Ballparking the Urban Placeness: A Case Study of
Analyzing Starbucks Posts on Instagram. In International Conference on Social
Informatics (pp. 291-307). Springer, Cham.
Lee, W.S., Jung, J. and Moon, J., 2021. Exploring the antecedents and consequences of the
coffee quality of Starbucks: a case study. British Food Journal.
Tintara, I.D.G.W. and Respati, N.N., 2020. The Effect of Product Differentiation, Service
Differentiation, and Image Differentiation on Competitive Advantage. Am. J. Humanit.
Soc. Sci. Res. 4. pp.316-321.
Tsai, P. H. and et.al., 2020. Exploring the effect of Starbucks' green marketing on consumers'
purchase decisions from consumers’ perspective. Journal of Retailing and Consumer
Services. 56. p.102162.
Online
122 STARBUCKS STATISTICS: 2020/2021 GROWTH, INNOVATIONS, & SUSTAINABILITY.
2021. [Online]. Available through:< https://comparecamp.com/starbucks-statistics/#TOC10>
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