University Research Project: Starbucks Product Quality and Strategies

This research report examines Starbucks' business operations, focusing on product quality and its impact on customer loyalty. It explores the company's strategic planning, including cost leadership and product differentiation, and analyzes the factors influencing customer satisfaction. The report delves into the company's history, marketing techniques, and the competitive landscape, including rivals like Dunkin' Donuts. It highlights the importance of customer loyalty programs, such as loyalty cards, and the role of employee behavior in shaping customer experience. The report also discusses the use of technology, such as cyber computing enterprise resource planning, to enhance customer satisfaction and streamline business processes. Furthermore, it analyzes the data collected to determine whether Starbucks maintains customer loyalty through its offerings and provides recommendations for improvement. The report emphasizes the importance of adapting to changing customer needs and preferences through training and development programs and customizing products and services to meet individual customer needs. The research utilizes both primary and secondary data to analyze Starbucks' market position and its approach to customer loyalty.

RUNNING HEAD: Research project on Starbucks product quality
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Name of the student-
Topic- : Research project on Starbucks product quality
University name

Research project on Starbucks product quality
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Acknowledgment:
I would like to express my gratitude to my guide, senior and supervisor for their
assistance and support in the accomplishment of my research. It is their support and helping
nature that helped me in completing research study in an effective manner. Without their
support and help, it would be hard to complete this research report in-depth manner. Along
with my supervisors, I would also like to thanks my teachers and my parents who have
helped throughout the time for my better understanding. The significant amount of
participation was also very good to help for me in gaining relevant information on the
research topic.

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Executive summary
With the ramified economic changes and complex business structure, each and every
organization is using advanced technologies and offering quality services to gain over the
market. This research report has reflected the key understanding of the business functioning
of Star bucks and how a company has implemented its strategies to increase to establish
effective customer's loyalty in a market. The main purpose of this research report is to
identify all the internal and external factors which influence the products quality and
Starbucks loyalty towards its customers. This research report has divulged that customer
loyalty is very important for the sustainable future of an organization. Starbucks has used
loyalty member card and high quality of its coffee products to establish effective customer's
loyalty.

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Table of Contents
Executive summary...............................................................................................................................3
Introduction...........................................................................................................................................4
Literature review...................................................................................................................................6
Research methodology........................................................................................................................13
Research Limitation.........................................................................................................................16
Summary.........................................................................................................................................17
Data analysis/ Results..........................................................................................................................18
Discussion/ Results..........................................................................................................................37
Summary.........................................................................................................................................38
Recommendation................................................................................................................................41
Conclusion...........................................................................................................................................42
Appendix.............................................................................................................................................45
References...........................................................................................................................................49

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Introduction
With the ramified changes and complex internal and external business factors,
Starbucks Company has gained momentum in a market by following its effective strategic
planning. In this research report, the main focus has been made on the quality of the products
and services offered by the Starbucks. However, Star bucks have maintained a strong brand
image in the market. This research study has focused on the strategies and advances
technologies implemented by the management persons of Starbucks in its business
functioning. However, the main focus has been made on the loyalty of company towards its
clients and brand image set up by it in a market. The customer analysis of Starbucks
Company has shown that company has created the core competency in the market by
following two main strategies such as cost leadership and product differentiation strategy.
Present description of company
This Starbucks Coffee Company was founded in 1971. It has total 37 countries
around the globe, having headquartered in Seattle, USA. Starbucks Coffee Company has
evolved from being a $ .50 million business to business having worth $ 6.4 billion. This
company has increased business efficiency and expanded its stores around the globe. It is an
American coffee company, having operations around 23,768 locations worldwide. Starbucks
Coffee Company offers coffee beverages, tea, baked goods and sandwiches and other
beverage products to clients. Company has the strongest brand image in food and beverage
industry and established as second largest coffee serving venue around the globe. However,
there are several big rivals who give tough competition to Starbucks Coffee Company in a
market such as Dunkin' Donuts, McDonald's and “The retail coffee Game”. These companies
have increased their turnover by very drastic amount. Nonetheless, Dunkin’ Donuts has
increased its overall turnover by average 22.3% since last five years. Presently, Starbucks

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Company has total sales of 22.39 billion in 2017 which is 28% higher as compared to last
past five year data. The main problem in this research is related to determine whether
Starbucks Coffee Company has provided customers satisfaction through its offered products
and services in a market (Kim and Davis, 2016). Throughout this report, the main focus
would be made on the marketing technique and strategic planning uses by Starbucks Coffee
Company to create competitive advantage in market. Firstly, current marketing strategy will
be analyzed to identify how Starbucks Coffee Company offers brings value to its customers.
After that, ethical engagement, strategic alliance and advance technologies used by Starbucks
Coffee Company offers have also be evaluated to analyze the market position of a company
and its loyalty towards its clients. Another part of this, research report discusses the research
methodologies and recommendation which could be used to make this research report
effective for the reader (Lee and Vachon, 2016).

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Literature review
With the ramified changes of the client’s needs and demand in the market, Starbucks
Coffee Company has been re-engineering its value chain activities with a view to satisfy their
needs in determined approach. As per the perception of Ko, and Chiu, 2006, it t is reflected
that Starbucks Coffee Company has focused on developing core competency by following
two strategic program named cost leadership and product differentiation. Starbucks Coffee
Company has focused on developing and implementing its strategies and plans based on the
companies which are the closest rival under its group mapping. The main rivals are Dunkin’
Donuts, McDonald’s and “The retail coffee Game” that influence the strategic planning of
Starbucks Coffee Company most. However, with the GDP growth of the Australia and
increasing purchasing power of clients, the turnover of company has increased with the
drastic rate. After analysing the annual report of company, it is found that company has
increase of average 20% sales since last five years. As stated by Yu and Fang, 2009 it is
revealed that it has shown that coffee business has high growth potential which may also
attract more businessmen to diversify their business in this field. Customer loyalty is very
broad term which could not be justified by using some words. It could be defined in terms of
values, brand image and quality of the products offered by company to its customers. The
main vision of Starbucks Coffee Company is to satisfy clients need and demand in market by
offering best quality of services and products. Nonetheless, with the increasing changes in
client’s value, perceptions and assumptions, Starbucks Coffee Company has been re-
engineering its value chain activities. As per the views of Kim, et al. (2017) it is reflected that
these strategic plans allow it to adapt with the advanced technologies and install newly
designed system in its stores. Starbucks Coffee Company has adopted cyber computing
enterprises resources planning to provide optimum level of satisfaction to its clients. This

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assists clients to buy all of its products and services through offline and online mode in easy
and determined approach. Moreover, customer loyalty is not limited to selling best quality of
food and beverage products to its customers but also include employees’ behaviour towards
clients in market. Starbucks Coffee Company has established strong brand image in people’s
mind on international level which is surely a positive point for increasing growth of the
organization. In addition to this, there are other rivals such as Dunkin’ Donuts, McDonald’s
and “The retail coffee Game” who are using advanced technologies such as loyalty card,
membership numbers and best offers to attract clients to attract clients in market.
Nonetheless, customer’s loyalty of particular company is highly based on the quality of
services and products offered by company and the extent of client’s satisfaction. In this
research, primary and secondary data have been collected to determine whether Starbucks
Coffee Company has maintained client’s loyalty through its existing offering in market. The
primary data collected through meeting, seminars and observation has reflected that the main
core competency of Starbucks Coffee Company in market is related to providing best quality
of food and beverage products in market. This company never compromise with the quality
of products offered in market. Nonetheless, adoption of advanced technologies has helped
company to increase its client’s satisfaction in effective manner. As stated by Wu and Wu,
2017 it is reflected that the main competitive advantage of Starbucks Coffee Company is
related to implementing effective value chain activities. It is observed that company has used
cyber computing enterprises resources planning in its business. This has established
automation in its several business steps which establish nexus between all the activities. This
cyber computing enterprises resources planning in its business also helps management
department to connect with all of its domestic and international functioning. Starbucks Coffee
Company has been credited with revolutionizing the coffee industry. As per the views of
Leduc, (2017) it is revealed that the main focus of management department of company

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would be establishing customer loyalty in market. Company has been loyal to its clients with
the customers experience and revolutionary reward program. This functioning has help in
improving the quality of its products and services offered in market and make them more
customized to increase client’s satisfaction level.
As per the perception of Robinson, (2016), it is revealed that the Starbucks Coffee Company
with the help of its cyber computing enterprises resources planning in its business has
established loyalty card mechanism. This loyalty card mechanism has been used to offer
rewards and other benefits to clients with a view to increasing their loyalty towards the
company. In addition to this, this loyalty card also helps in collecting required information of
clients which eventually used by management department to formulate strategic planning in
long run. Moreover, people in Australia are more inclined towards availing best quality of
food and beverage product. The Starbucks Coffee Company has offered the best quality of
goods and services to its clients and astonishing $2.65 billion clients in a market
(MacDonald, 2007). However, The Starbucks Coffee Company has kept its products sales
price high as compared to other rivals. Each store of Starbucks has been focusing on client’s
satisfaction by providing the high quality of food and beverage to its clients. In addition to
this, customers comment card is one of the successful strategies of a company which focus on
customizing its products as per the clients changing diverse nature, based on attitudes,
personal needs, social value, assumption and perceptions. Customers' requirements are kept
at a high position when designing the quality, reliability, and experience at Starbucks.
Company’s initiative towards customizing its products and services
As per the perception of Thompson, (2017), it is evaluated that in order to re-engineering
business process and change in its offered products and services, a company needs to
implement monthly training and development program. The main business strategic planning

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of company is related to hiring expert’s employees who are good in communication and
clients handling at their front desk. These employees would work at the front desk of all the
stores of Starbucks to represent its products and services in market. This process will help in
setting strong brand image in the market and create effective client bonding in a domestic and
international market. Nonetheless, use of cyber computing enterprises resources planning will
also strengthen the online products selling of company and establish automation in the
business process of a company. There are high economic growth and market opportunity
which could be grasped by the Starbucks to make effective changes in its business
functioning. The consistently training program implemented by the company helps
employees to increase the effectiveness of their working for the better satisfaction of the
clients. The newly developed program implemented by company converted value chain
activities to customize all the goods and services as per the attitudes, personal needs, social
value, assumption, and perceptions of clients (Rajasekaran, 2015).
Analysing the customer loyalty of Starbucks Coffee Company
As stated by Chatterjee, Kar, and Gupta, (2017) it is explained that Customer loyalty is the
result of consistently positive emotional experience, perceived value based on the physical
attributes of the organizations which cover all the products and services offered by the
company. The customer loyalty of Starbucks is based on the quality of products and services,
reward options and clients experience they had for the company. It is observed that
management of the company is more inclined towards selling best quality of coffee in the
market. The customer loyalty of company is highly based on the coffee products offered by
the company in the market. Customer loyalty of Starbucks Company is said to occur if clients
chose to use a particular company rather than using other shops. After collecting data from
the various sources, it is considered that more than 25 million clients of Starbucks are

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frequent clients who visit its stores for the coffee and other products. As per the views of
Agogo and Hess, (2018) it is reflected that The main customer’s loyalty program of
Starbucks Coffee Company is implementing loyalty membership cards or creating their user
account on its developed dashboard. As stated by Li, (2017) it is reflected that these programs
have been introduced by a company to promote or motivate its clients to frequently visit its
stores around the globe. It includes reward system, dip points or redeemable bonus points
which could be used by them to reduce the amount of bill at Starbucks Coffee stores. It also
helps in retaining the customers in less expensive than acquiring the new one. This customer
loyalty program of Starbucks of a company is based on the cost-effective way to drive client's
satisfaction, customer's loyalty and retentions. In terms of customer loyalty, customer
experience management of Starbuck Company has proved itself as the sustainable
competitive advantage.
Cost effectiveness of customers loyalty program
After evaluating all the data and benefits of customer loyalty program, it could be inferred
that Starbuck Company has proved itself as the sustainable competitive advantage in the
market by focusing on the high products quality. As stated by Mathias and Smith, (2016) it is
revealed that customer loyalty program will help a company to retain its existing clients and
influence others to take reap of these new offers in the market. In addition to this, Starbucks
can also use this information to customize its products and services in the market which could
strengthen its brand position in market. As per the views of Grimes, et al. (2017)The brand
position of Starbucks of a company is based on the quality of coffee products offered by the
company on the domestic and international market. This has helped a company to establish
effective functioning in a market and customizing its all of its products and services as per the
clients need in the market. Nonetheless, setting customized business process in this ramified

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business environment requires re-engineering of value chain activities of business each and
every time. Therefore, customizing products and services each and every time may be the
costly process which could reduce the effectiveness of the business.
The Starbucks experience (Performance improvement strategy to keep the quality of the
products high)
As stated by Agogo and Hess, (2018) it is revealed that the Starbucks have created a core
competency in selling customized coffee around the globe and kept its business process
ahead of all the rivals such as Dunkin' Donuts, McDonald's and "The retail coffee Game".
Moreover, Starbucks has also installed an advanced cyber system in its business which
increases the overall quality of its products. This helps the company to make sophisticated
changes in its business and make clients experience better. There are several improvements
which Starbucks Company has made such as entering into strategic alliance with other
organization for the standards raw material, installing cyber computing enterprises resources
planning in its value chain activities and customizing its business process. The marketing
strategy of a company is also unique which is based on promoting and advertising its
business at the same time. The environmental footprint analysis has shown that in order to
promote its brand, a company has donated high funding to charity funds and implemented
knowledge awareness seminars for the student. These CSR activities are the unique working
program used by management of the company to discharge its corporate social
responsibilities and branding its business on the domestic and international level.
Establishment of effective customer services
As per the views of Chang, (2014) it is revealed that each and every Starbucks store has
customer cards available at the condiment stations. This comment card helps management to
keep in touch with what customers want from its offered coffee products in market. Starbucks