MSc Operations Management: Starbucks and Greggs Comparative Analysis

This report provides a comprehensive analysis of Starbucks and Greggs operations, focusing on various aspects of their business models. Part A utilizes the Four Vs framework (Volume, Variety, Variation, and Visibility) to compare the two companies, evaluating their strengths and weaknesses in each area. It then delves into a comparative analysis of their performance objectives, including quality, speed, dependability, flexibility, and cost. Furthermore, the report analyzes the design of customer service processes and store layouts for both companies, highlighting the influence of the Four Vs and performance objectives. Part B shifts the focus to Starbucks' supply chain management, exploring its global operations strategy and micro-environment, including key requirements, capabilities, and challenges. The report then analyzes and evaluates Starbucks' operational areas, specifically supply chain management, and offers recommendations based on the findings. The report concludes with a summary of the key insights and findings from the analysis.

Running head: OPERATIONS OF STARBUCKS
OPERATIONS OF STARBUCKS
Name of the Student
Name of the University
Author Note

1OPERATIONS OF STARBUCKS
Table of Contents
Part- A..............................................................................................................................................2
Comparative Four Vs Analysis....................................................................................................2
Starbucks..................................................................................................................................2
Greggs......................................................................................................................................2
Analysis of the Four Vs...........................................................................................................2
Analysis of Comparative Performance Objectives......................................................................3
Design Analysis...........................................................................................................................4
Part- B..............................................................................................................................................5
Overview......................................................................................................................................5
Starbucks global operations strategy and micro-environment.....................................................5
Key requirements, capabilities and Challenges...........................................................................6
Analysis and evaluation of operational area................................................................................6
Recommendations............................................................................................................................7
Conclusions..................................................................................................................................8
References........................................................................................................................................9

2OPERATIONS OF STARBUCKS
Part- A
Comparative Four Vs Analysis
Starbucks
Volume The volume offered to the customers is high in Starbucks. The
volume of the operations are large. Large amounts of beverages are
served to the customers every day (Starbucks Coffee
Company 2020).
Variety Variety is an important aspect of Starbucks. The company is known
to introduce newer varieties of coffee infused beverages on a
seasonal basis. Moreover, there are various forms of desserts that
are available.
Variation Variation is not a great factor that affects Starbucks. Most of the
customers prefer the Grade or Venti brewed coffees. At sometimes
there can be greater variation than the other times. Variations do
not affect the larger part of the customer base of Starbucks.
Visibility Visibility of Starbucks is high in the market. This mostly because
of the brand marketing strategies that are implemented. Starbucks
stores can be easily located by their world famous logo. The
specially designed coffee cups with the name of the customer
increase visibility.
Greggs
Volume Large volumes of products are sold by the Gregg’s bakery. The
products include breakfasts, sandwiches, beverages, snacks, lunch
or desserts. Large volumes of products are sold by Gregg’s at
relatively cheaper prices.
Variety The variety of products available at Gregg’s are vast. All forms of
bakery products are available with sweet dishes, beverages, pasta,
salads and soups (Greggs 2020). The company also introduces
various types of products for their customers throughout the year.
Variation Variation affects the business of Greggs. At some times of the year,
especially during the festivities the demand increases. This is an
important factor that prompts the company to keep changing some
of their product offerings.
Visibility Gregg’s operational visibility is low as the operations cannot be
seen much by the consumers. It is more visible as a brand in the
UK. However, for non-UK based customers, the brand visibility is
low. The customers do not get to see the product in making.
Analysis of the Four Vs.
It can be said that Starbucks is more experienced in global operations. The company
offers large volume and variety and has a very good visibility. On the other hand Gregg’s has

3OPERATIONS OF STARBUCKS
high volume, high variety, large variation and local visibility. It is important to note that the
variation is a factor that affects Greggs more than Starbucks. The volume of production is more
in both Greggs and Starbucks. However, Starbucks has a variety of products that are mostly
beverage based. Gregg has a higher variety than Starbucks. This is because Starbucks normally
provides beverages with a smaller number of desserts. However, Greggs sells a number of food
and beverage based products to the customers. Variation is more in case of Greggs as the
seasonal demand affects Greggs more than Starbucks. The bakery items are in demand more
during festivities than the normal beverage items that are provided by Starbucks. Visibility is
more in Starbucks. The customers can see the coffee being brewed and also check the kind of
coffee that is being used. This is not the case with Greggs. The customers are unable to view the
baking processes. Moreover, Starbucks as a brand is more visible than Greggs. However, Greggs
provide nutrition and ingredient information to the customers. They have the option to check
these information any time.
Analysis of Comparative Performance Objectives
The basic five objectives that are present for both the companies are quality, speed,
dependability, flexibility and cost. However, the objectives that are present for the two
organizations concerning the same are different.
Quality- The current operational performance of Starbucks in terms of quality has been effective.
Quality focus is an important part of the Starbucks operations management. It is an important
part of the operations objective of the organization. However, presently the quality of the
organization has decreased. Greggs has been able to improve their quality of their product. This
is due to the importance that they have paid towards quality improvement (Greggs 2020). The
bakery has implemented standards that have helped in the maintenance of better quality.
Speed- Speed has been an important factor in Starbucks. The operations of the coffee vendor has
made the presentation of beverages faster to the customers. Starbucks have considered speed to
be one of the most important aspects concerning their operational objectives. Greggs has a
slightly lower speed of operations than Starbucks. It has to depend much more on the availability
of the products. Both the organizations consider speed to be an important value. Hence, the
development of operational speed is considered to be much important.
Dependability- Dependability means the power of the operations to be dependable for the
organizations that are working. Greggs are more dependable as they employ better techniques to
understand the requirements of the customers. They can effectively enhance the productive
performances in terms of delivering the right goods. Starbucks slightly lags behind in
dependability as the products sometimes fail to attract the attention of the customers. At times
the products that are delivered are unable to satisfy the demands of the customers. Hence.
Dependability cannot be said to be a good operational objective of Starbucks.
Flexibility- Starbucks is more flexible than Greggs as it has a more limited scope of operations.
The company is able to change its operational procedures in accordance with the requirement of
the situations. Greggs on the other hand have a more rigid operational procedure. The
performance objectives in this case falls for Gregg as it provides more food products to the
customers. Starbucks on the other hand can change their operational processes in accordance of
the change in demand as beverages are easier to handle than vast number of food items.

4OPERATIONS OF STARBUCKS
Cost- Starbucks tend to be more cost effective for the customer. The cost of production is lower
for Starbucks as it offers lower varieties of desserts and higher varieties of coffee infused
products. Hence, the costs for the customers tend to be slightly lower than that of Greggs. Greggs
on the other hand have higher cost of production as they need to produce various types of food
and beverage items. The cost for many of the products tend to be higher due to this. This results
in the customers having to pay more for the services.
(Source- As provided by the author)
It is important to note that the markets that Starbucks and Greggs serve are somewhat
different. Starbucks operates mainly in the beverage and desert market. However, Greggs operate
in a large food and bakery market. Hence, Greggs have a much wider scope of market
operations. It is important to note that this improves the operational feasibility of Starbucks. It
helps the organization to align its operational areas with the type of services that it provides the
customers. It is also important to note that the performance objectives are important in view of
the wider scope for growth of both the organizations. The importance of the operational
objectives are greatly affected by the market demands that these organizations need to address.
The objectives are made more flexible in order to address inequities in demand and supply at
various times.
Design Analysis
The above analysis can be used to understand the influence that the factors discussed
have on the design implemented by the two organizations. The two most important aspects that
need to be considered are the design of the customer service process and the store layout.
In Starbucks, the four Vs and the performance objectives greatly affect the service
process and the design layout of the stores. The company offers large volume and variety and has
a very good visibility. Flexibility, speed and cost have been important for Starbucks in terms of
quality
cost
dependabilityflexibility
speed
0
20
40
Chart Title
Starbucks Greggs
Figure 1: Polar diagram

5OPERATIONS OF STARBUCKS
the operational performance objectives. In line with the same the design of the customer service
process is designed to take quick customer orders and provide them their beverages at the right
time. The shop also operates as a take-out shop as many of the clients are workers. The
customers need to come to the counter of the shop to order their coffee. There are wide varieties
of coffe and beverages that can be made to order at the shops of Starbucks. The design of the
shops are small with limited spacing for the customers are there. A small number of comfortable
sitting arrangements are present with tables that can help to use laptops and other devices. The
Starbucks logo is used as a principal imagery for the shops (Bozarth and Handfield 2019).
The four Vs analysis of Greggs pointed out that the company is high in volume, variety
and variation. The quality factors and the dependability aspects are important strengths of the
organization concerning the operational performance objectives. The design of the customer
service process in done in the shape of a bakery. The customers can come in and look at some of
the products in offer at the stores. They can either take out the bakery items or they can sit down
to have their food. The store layouts consist of a bakery or confectionary styed display counter.
The customers provide their orders at this display counter and have their food in the store. The
stores are large enough to accommodate a large number of customers. The shops are styled as
classic old-fashioned bakeries in the UK. The display counter is important as it displays some of
the important product offerings of the shop. Normally, the bakery and dessert items are
displayed. Two sitter seating arrangements are predominant at the Greggs shops.
Part- B
Overview
The selected area for analysing the operations management of Starbucks is supply chain
management. Supply chain management has been one of the most important operational areas for
Starbucks. One of the main reasons for the global success of Starbucks has been the effectiveness
of its supply chain management process. The market operations of the company are greatly
dependent on the various types of coffee oriented products that it mainly provides the customers.
Procurement and supply of coffee is one of the most important areas for the business
development of the company. However, the other forms of supply chain functions that are
undertaken by the country are also important in determining is productive effectiveness. The
operational effectiveness are shaped by the quality of coffee and other products that it provides
to the customers and the quantity it needs to meet the demand. The operational effectiveness
across the globe are hence dependent on the supply chain functions.
Starbucks global operations strategy and micro-environment
The global operations of Starbucks affect the supply chain functions that are implemented
by the organization. The macro-environment where the organization operates around the world is
the coffee and beverage industry. The raw coffee industry of the world is worth 20 billion US
Dollars. Starbucks is based in the US where the coffee industry was worth 225.2 billion dollars.
Most of the coffee that is produced in the world come from South America and Africa. Hence,
Starbucks has to secure their supply chain by importing much of their coffee from various parts
of the world. The company is one of the largest coffee shop chains in the world. This provides it
with relative expertise in the industry. The business requirements of the macro-environment
necessitates that Starbucks procures and utilizes the best grade coffee for providing the

6OPERATIONS OF STARBUCKS
customers with the coffee drinks that they prefer most. The biggest rival company of Starbucks is
Dunkin Donuts. The rival outsources its production and supply chain functions.
The supply chain functionality of the organization is maintained by managing a global
coffee procurement and supply mechanism. It is directly involved with farmers across the most
important coffee producing areas in the world. The operational aspects of the supply chain
mechanism is improved by growing just the right quality of coffee that can help the company to
maintain the quality of its coffee infused beverages. The supply chain is made stronger as the
organization follows a vertically integrated supply chain. This is a supply chain mechanism in
which the organization can control each levels of the procurement and supply functions.
Starbucks involves itself in each of the steps that are present in the supply chain process. It
directly procures coffee from the various farming cooperatives. The company works with the
coffee growers directly to ethically source the coffee beans. The globally sourced coffee beans
then reach the locations of the company that are the closest to the farmlands. Hence, coffee
procured from South America is more likely to the supplied to the shops in the US. African
coffee is more likely to reach Europe. The various storage facilities in the US and Europe are
used to roast the coffee beans that are procured. They are then sent to the distribution centres that
are the closest to the vicinity. The process helps to maintain the standard taste of the coffee
across all the shops.
Key requirements, capabilities and Challenges
The key requirement for Starbucks are to maintain a standard global quality for the coffee
beans that they procure. With a supply chain that runs across the globe this can become a very
difficult function. Throughout the world, Starbucks serves close to 11 million cups of coffee
daily. Each location of the company globally has to provide around 400 cups of espresso and
other coffee drinks to their customers. Around 60 million customers are served by Starbucks
each week. This necessitates that the organization takes part in a smooth supply chain function.
The global supply chain functions of the organization are optimized in accordance of the global
operations strategy of Starbucks. The organization needs to supply coffee beans to more than
28,200 locations worldwide (Starbucks Coffee Company 2020). However, coffee is not the only
ingredient that is required to make the beverages provided by the coffeehouse chain. Other
important supplies include milk, sugar, tea and various flavour enhancing ingredients. To a lesser
extent the ingredients for making the desserts that are offered by the organization also become
important. A significant amount of attention needs to be provided to the optimization of all the
supplies that are sent to the various shops.
The capabilities of Starbucks in this area are in relation to the infrastructural facilities that
are present, the logistics functions and the technological systems that are utilized by the
organization. The company has large numbers of storage facilities across the US and Europe
where it maintains uniform coffee bean roasting systems. The logistics companies that are used
by the company helps to supply the procured resources to the various locations on time. The
company utilizes an advanced enterprise resource management system to gain data about the
various stages of the supply chain (Genovese et al. 2017). The IT systems also helps to maintain
its stock and inventory management functions. It has effective people management systems that
is utilizes to ensure that a uniform system is followed across the globe for improving
productivity of the workers.

7OPERATIONS OF STARBUCKS
Two specific challenges are faced by the organization in realizing the most important
requirements. Firstly, the challenge is getting the procured coffee beans to the processing plants
on time. The global operations of the company make this process very difficult. Secondly, the
optimization and alignment of all the resources is a major problem (Lambert and Enz 2017). The
coffee bean procurement mechanism does not match with the mechanism for the procurement of
the other resources such as tea, dairy or sugar. This makes it difficult to plan and manage all the
supplies at the same time.
Analysis and evaluation of operational area
The management of resources within the functional scope of the supply chain is very
difficult as a process for Starbucks. The challenges that were identified above were related to the
timely delivery of the procured supplies to the processing plants of the company and the
optimization and alignment of all the resources together. These are important problems that can
act as barriers to meeting the productivity requirements of the organization. The supply chain
functionality of the organization is maintained by managing a global coffee procurement and
supply mechanism. It is directly involved with farmers across the most important coffee
producing areas in the world. The operational aspects of the supply chain mechanism is
improved by growing just the right quality of coffee that can help the company to maintain the
quality of its coffee infused beverages.
Managing the resources in themselves becomes difficult tasks for the organization. In this
case the vertical integrated supply chain mechanism helps to improve the process of resource
management. The company becomes aware of the functional requirements in each individual but
gradually progressing stage of the supply chain process (Boone 2017). The development of better
resource management practices are made possible through the efficient and effective integration
of the IT systems. It is important to note that the hi-tech resource management software that are
utilized by the company helps to align the required resources with the resource procurement and
supply functions. It is important to note that the supplies need to be efficiently managed in order
to create a more effective supply chain strategy. The idea is to effectively integrate the resource
management strategy with the supply chain functions.
The maintenance of the coffee beans procurement and supply system needs to be
mentioned first. The coffee beans are procured from the farmlands across the globe. The
suppliers are provided with special training by Starbucks to be able to manage the supply chain
functions properly. Frequent communication is maintained between the company and the
suppliers. This helps Starbucks to effectively track the location of the supplies. The coffee beans
are driven to the ocean liners through the easiest transport routes to save time. The ocean liners
supply the coffee to the processing factories across the US and Europe. Communication is one of
the most important factor that enhances the functional effectiveness when supplying the products
to the right places at the right time (Pettit, Croxton and Fiksel 2019). A timing system is
maintained by the supply chain department of the company to make sure that the beans reach the
processing centres on time. This helps to optimize the supply chain functions.
The supply chain for the other important resources are as important for the company as
the supply of coffee beans. The company procures and supplies tea from the different areas
across Asia and the other parts of the globe. The locally produced sugar and milk resources are
easily shipped from the farmlands across the US or Europe and sent to the inventories of the
company. This saves a lot of time. Moreover, the roasted coffee beans can be sent to the

8OPERATIONS OF STARBUCKS
inventories of the coffee shops of Starbucks across the globe at the same time. The ERP systems
that are utilized by the company help to effectively align the resources with the requirement for
production. The resource management functions are aligned with the supply chain functions to
develop the organizational processes. This helps to create better operational scope for the
organization in consideration of its supply chain management functions.
Recommendations
The operational factors that govern the performance effectiveness of Starbucks are
efficiently managed by the company. However, there are certain areas that can be improved to
ensure further operational effectiveness.
There needs to be more emphasis provided to the transport mechanisms that are utilized
by the organization. The organization can use more high performance transport vehicles to
improve the supply chain functions. The company can focus on creating effective partnerships
with the best logistics enterprises across the world. Moreover, it can provide some of its own
vehicles when supplying the roasted coffee beans to the various stores.
The company can strategically locate its storage facilities at various port cities in order to
reduce the journey strain after the coffees are supplied by the cruise liners. Moreover, there is a
need to build more storage facilities in order to be able to reduce the strain on the existing
facilities. Starbucks also need to develop more storage facilities in Asia and Africa to ensure that
the local cities can be served through these.
The company needs to develop an agricultural research department that can help it to find
newer ways of growing coffee at newer places. This would automatically reduce the inclination
of the company on the South America and Africa based coffee plantations. It can grow coffee in
various locations across the US and Europe and reduce the pressure on its international supply
chain mechanisms.
It is important that the company reduces its carbon footprint by utilizing greener
alternatives for transport. It can use electric powered transport systems to transport the procured
coffee. This would help the company to develop better sustainability standards.
Conclusions
The work has been important in developing better understanding about the operational
aspects of Starbucks and Greggs. Subsequently, better knowledge of the supply chain functions
that are utilized by Starbucks was gathered through the analysis process. It was found that the
various technological systems and effective procurement and supplier management strategies
help Starbucks to optimize their supply chain functions. The company needs to create better
supply mechanisms across the world. Additionally, there is a significant need to improve the
sustainability functions.

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