Report on Operations Management and Service Excellence at Starbucks

This report provides a comprehensive analysis of Starbucks' operations management and service excellence, comparing it with Greggs using the Four Vs framework (Volume, Variety, Variation, and Visibility) and performance objectives (Quality, Cost, Flexibility, and Speed). It delves into Starbucks' global operations strategy, considering macro-environmental factors such as legal aspects affecting coffee bean prices. The report identifies key requirements, capabilities, and challenges faced by Starbucks, particularly in maintaining customer experience and managing its supply chain. An evaluation of selected operational areas highlights the impact of these challenges, leading to recommendations for improvement. The analysis covers design aspects of customer service processes and store layouts, emphasizing the importance of customer feedback and unique store designs in attracting and retaining customers. The report concludes by summarizing Starbucks' operational strategies and their significance in achieving business goals.

Operations Management
and Service Excellence

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Comparative Four Vs Analysis...................................................................................................1
Comparative Performance Objectives analysis...........................................................................2
Design analysis............................................................................................................................4
PART B............................................................................................................................................5
Overview of the company...........................................................................................................5
Starbucks global operations strategy and surrounding macro-environment...............................5
Key requirements, capabilities and challenges...........................................................................6
Analysis and evaluation of selected operational area.................................................................7
Recommendations.......................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Operation management is the process of managing and controlling all the activities and
operations of a company which are performed by the company with the purpose of effective
running, fulfilling consumers needs and maximising productivity and profitability of the
company. It concentrates on carefully managing the activities to manufacture and distribute
goods and services. Service excellence is the level to which a service meets the customer's needs
and desires (Bendoly, van Wezel and Bachrach, 2015). It can be an ability of the provider to
consistently met and administrate clients expectations. It is essential because it highly focus and
offer various advantages and execution differentiator for both private as well as public firms.
This assignment is based on Starbucks which is an American coffee company and coffee-
house chain. This firm has been defined as the main representative of second wave coffee and
the organisation operate its business globally with the help of its variety of products. This written
document will discuss about different comparative analysis and global operation strategy of the
company. Further, will explain about key requirements, capabilities and challenges which are
faced by the company. The analysis and evaluation of the selected operation area will defined to
monitor the impact of the challenges on the company.
PART A
Comparative Four Vs Analysis
Operation management is the process and activity of managing and controlling its
business operations. Starbucks operate its business globally so it also require to administrate its
business. For this, the management of the company can use Four Vs analysis which is described
as below:
Volume- It indicates to the how much of a particular commodity is needed to fulfil its demand.
Low volume operations lean to be less insistent with staff executing more than one utility where
as high volume renders into quotable actions. Starbucks is a well kn own company which operate
its business globally and satisfying the neds of the customers by manufacturing products as per
their needs and demands (Bromiley and Rau, 2016). The respective company likely utilised
between 2.916 and 2.946 billion cups at their stores or an average of 8,070,428 per day. The
annual production of the company at international level is 4 billion cups. Greggs is the largest
bakery chain which specialise in savoury products like bakes sausage rolls and sandwiches etc.

the weekly production of the organisation is 1.5 million sausage rolls. This firm has approx 1650
Greggs shopfronts in Britain.
Variety- It affiliated to the variety of products and services which are manufactured by the
company. High variety in goods provide more organisation's the flexibility to manufacture
commodities and services to fulfil customers needs. The production function of Starbucks offer
variety of products like Tea, coffee quality, Starbucks Verismo and other products (Campbell,
Jardine and McGlynn, 2016). For example, few best products are vanilla Latte, Iced white
chocolate Mocha, Hot chocolate, Chai latte and Lemon bar Creme Frppucchino etc. Whereas
Greggs produce different products like Sausafe Roll, Vegan products, balance choice pasties,
seasonal ranges, sandwiches, breakfast menu, soup etc. Another variety of products are based on
discontinued products such as macaroni pie and bread.
Variation- It is another factor of Four Vs analysis which indicates to the how much extent of
variation of demand change over a time period cause of external factors. For example, variation
are occurred in Starbucks due to consumers needs and demands. Now these day people are health
conscious so they have the requirement of organic, healthy and sugar free coffee and drinks.
Whereas in Greggs, the variation are generated due to cultural fector and for this, the company
manufacture veg and non-veg products to fulfil the needs and demands of its potential clients.
Visibility- This component refers to how much of the organisation's process does the target
audiences actually experience. The service sectors has a higher extent of visibility whereas the
production industry has diminutive to no perceptibility to its consumers. In Starbucks, the quality
of the products and services which are offered by the company in term of offering goods to
customers are good. It provide mobile application service to its customers and make concentrates
on personalisation. Whereas Greggs also offer effective services to their potential customers like
Contact Greggs customer services. It help the customers to resolving their queries, providing
information about products and complain about their experiences.
Comparative Performance Objectives analysis
It can be viewed that there are number of objectives and aims which have to followed in
an organisation and also adopted by top management of both the firms (Campbell, Reyes-
Picknell and Kim, 2015). Main concentration of the organisation is always on their employees as
they are the key resources and most crucial components of manufacturing in each firm. Some of
the essential performance objectives are defined as beneath:

Quality- In context of Starbucks, the management of the company have to maintain high
quality so that they are capable to get attention of number of consumers and retain them till long
term period. The respective organisation has an another function of quality management which
assists them in maintenance of and betterment of the quality (Copacino, 2019). In greggs, the
firm majorly deal in bakery products that assists them in keep quality of their production so that
they are having a better position in marketplace.
Cost- majority of the cost of Starbucks is with regards to there raw material which is the
coffee beans that is the major component of this coffee giant. They devise attempts to reduce this
cost so that overall profit margins extent can be kept in the firm. In Greggs, the cost is contexted
with raw material which required to the company for manufacturing of different bakery products.
To minimise their overall cost of manufacturing, the administrator of the firm require to
concentrates on bulk production an manufacture in large quantities so that overall cost and by
preserved.
Flexibility- This component is affiliated with the speed and flexibility these two elements
are regelated with each other. Administrator in Starbucks have to be very flexible so that they are
able to modified themselves or change their policies accordant to modifying situations of the
external atmosphere. It has a Major influence on the respective company as whenever they are
entering into a new nation those brand has to accepted themselves with culture of that specific

country. In Greggs, it will be beneficial for this brand in accepting themselves with the different
need of marketplace so that they are able to sustain and survive for a long term period.
Speed- It is one component which is affiliated to consumer experience as for how much a
time a specific customer has to hold in an outlet ascertains the extent of fulfilment accomplished
by a potential client. Starbucks has successfully able to install a system which is assisting them
to minimise the waiting period of time starting from their order to the final products being
detected by the consumer (Gómez, Martínez Costa and Martínez Lorente, 2017). In Greggs,
administrators posses powerful transmission of abstraction which assist them in maximising and
keep the extent of profit margins.
Preceding defined are some of the components which is assisting the firm in accepting
elements so that they are capable to maintain their preserving level and reputation in the rival
marketplace. This is also helping administrators in accomplishment of a rival benefit so that aims
and objectives can be achieved in effective way.
Design analysis
Impact on design of customer service process
Customer service is indicates to number of consumer services that are utilised in helping
their potential clients so that they can be ready how to utilise a specific product. It is crucial in
overall procedures which is starting from planning, utilizing, training, keeping and direction of
several products and services. Customer services in a part which deals with different goal;s of the
company to maintain fulfilment extent of their consumers (Ivanov, Tsipoulanidis and
Schönberger, 2017). On Starbucks this is a need that administration group is offering services
before and after buy which can assist in keeping the fulfilment extent of consumers. Such as, this
firm is taking feedback and repose regularly fro their target audiences so that they are executing
functions in according to their need and desires only. In Greggs, the firm is utilising this system
so that they can have a favourable influence on their mindset which guides to repad visits and
favourable word of mouth publicity by their loyal consumers.
With the assistance of such consumer need and feedback of them, administrators can
innovate their products which will assist them in retaining of their potential clients for a long
term period.
Impact on design of store layout and flow

It is a need that each and every firm must have a design or effective framework so that
they can netting attention of numerous consumers with the assistance of their store structure.
Physical and online stores can assist target audiences and then in keep the reputation in the
marketplace. In Starbucks, the company have number of physical stores which they are using
attract various potential clients. They are having a store layout which is very unique from their
other rivals and this is of great assistance for them in offering a diverse and foremost condition to
their consumers.
In Greggs, administrators are dealing in bakery products which they are having online
and offline presence (Jaca and Psomas, 2015). This is beneficial for the firm in gaining rivalry
benefits and accomplishment of overall success and development.
PART B
Overview of the company
Starbucks is an American coffee company which was established in 1971 by Jerry
Baldwin, Zev Siegl and Gorden Bowker and headquartered in Seattle, Washington or operate
over 30,000 locations across the world. It uses operation management through different
approaches and policies to achieve the goals and objective. It operates at international level for
providing good quality of coffee to the target audience. The supply chain management of
Starbucks include every thing from planing of the raw material to the production of coffee and
distribution to its retail outlets (Kerzner, 2018). They have a proper rule to follow such as plan,
source, make and deliver in their management system. The world largest coffee company is
successful in delivering the goods and service in the market. They include various
counterparties such as coffee producer, the processor, exporter,broker and importer to have a
efficient flow of activities in the company. They are successful in business because they
employee its own people in the distribution centres to keep a watch on overall operation in the
organisation. The total quality maintenance and supply chain management are the big tools used
by the Starbucks in maintaining their profits.
Starbucks global operations strategy and surrounding macro-environment
Global operation and macro environment
Starbucks main focus is on its employees and customer in the operation strategies. They
believe in providing good customer experience by improving the performance in delivering the

good and services. They focus on improving operation management in the organisation by
concentrating on the managing process such as input process, Transformation and output
process. Operation strategies is concern about the cost of raw material, labour requirement and
customer satisfaction. Operators main focus is on providing the good quality of coffee to its
target customer to achieve goals and objective (Lee and Tang, 2017). There are various macro
environment factors which can effect the operation activities of the Starbucks in global levels.
Legal factors: The government impose high tax on farmers in counties producing coffee
bean, than Starbucks needs to pay higher price for their purchase and ultimately customer has to
bear the high price for the coffee. Starbucks operates at global market, so it is important for the
company to have international stability to perform its activities in effective ways. Other factor is
economic issues of the country
Economic factors: the economic growth is low of the country then sales of Starbucks
will fall down because the income of customer is low in negative growth of economic. Their are
various social issues which needs to be taken care such a creating new premises, Starbucks needs
to look for high standard and skill locally to attract its customer and run its business for longer
period of time (Mahadevan, 2015). They find out the area where local population have high
attitude to work because it make easy for the company to hire people and train them in effective
ways. Starbucks attract customer having good quality of standard in the society and looking
forward to high standard product and services in the market. The changing social and economic
structure of the country provide higher level of income customer and greater interest in Starbucks
products and services.
Key requirements, capabilities and challenges
Key requirements
In context of quality management, as a tool and technique the most crucial needs are
defined as under:
Product based view- The firm must utilise product supported view so that they are
capable to keep the quality standards. This view is essential so that the quality can be positioned
as a dimension which can be specified. This will be of great assistance as quantified concept can
be sounded and attained more effectively as compared to qualitative prospects.
Value based view- This is also a view which is affiliated to buy determination of
consumers. If Starbucks will be able to offer products at appropriate quality standards then it will

help them in offering needed value to their consumers. It will enable to adopt the product as per
the prices at which they are provided by Starbucks. When consumers will be experiencing more
and maximise value then it will direct to maximise in overall brand representation of Starbucks.
Manufacturing based view- In this endeavour have to be devised by Starbucks in term of
maintenance if quality since their inner phase which is producing if product (Naser and Al
Shobaki, 2017). It is a tool and technique which will assist in adoption of appropriate quality in
the producing a phase itself. It will direct to best quality in the finished good which is being
served to the consumers.
Challenges for Starbucks
Maintaining quality is a characteristic which must be accepted by Starbucks as their plan
of action to maximise their gross sales and profitability (Naser, Al Shobaki and Amuna, 2016). It
is not easy because their are numerous issues and challenges which they have to deal with in
order to accomplish their goals. Some of the challenges and hurdles which are suffered by
Starbucks are mentioned as beneath:
International measurement system- There is a need that there has to be system in which
the overall quality across all their retail stores which are present all over the world are measured
which can assist this company in keeping a fixed quality of their goods in all their outlets. It is a
big challenge as it becomes very complex to administrate large individual of stores and quality of
their products to be similar as many time there has to be innovation one base done cultural
divergences and predilection of consumers predominant in diverse nations.
Continuous evaluation system- There has to be a method which can be utilised for
ongoing administration of the quality division of the firm. Quality maintenance is not a single
time action or one time activity in a continuous way. This action as a big objection as there is a
lot of origins in status of fiscal and human which organisation has to continuously invest so that
their overall process of quality fixture is taking place.
Same providers internationally- To have same quality standards to be followed it is also
important that the raw material being utilised is also similar. For it, there is a need that similar
suppliers are offering raw materials to each of their outlet again this is a very difficult work
because it is very complex for having same providers all though their stories which directs to a
situation of complexities in maintain same quality standards by Starbucks in their products.

Analysis and evaluation of selected operational area
From preceding defined information, it can be analysed that fro Starbucks quality is
everything and the most essential aspect which I utilised by this company so that they are
capable to get attention of numerous consumers and have large market share with them. Several
efforts are made by this brand which is assisting them in accomplishment of their objectives
(Psomas and Jaca, 2016). They are outlying a time frame if just about 18 weeks each year by
visiting coffee suppliers and growers to assure that the coffee beans which are offering to needed
quality of standards of Starbucks. Assessment of instant activity of quality development in case
of Starbucks is knew according to defined information:
Consideration of quality and cost- The respective company is successfully maintain or
manage quality by also having cost control which states that they are investing their resources in
an effective manner that they are capable yo use them in appropriate way (Reid and Sanders,
2019). It directs to organisation of effectiveness in all division of firm and accomplish of their
profitability targets.
Commitment- In compare to rival firms, it is analysed that the commitment extent which
Starbucks has is rarely seen in organisations. All their shareholders consisting their employees,
customers, investors, creditors, debtors and top management etc. are having a very strong extent
of commitment regarding accomplishment of their aims. This a favourable aspect of this
company which devises it feasible for them to accomplish their goals in an adequate manner.
Development of strategies- Starbucks has always been very consistent in developing plan
of actions for maintenance of quality so that they are offering genuine services, inviting
environment and a better commodities which is able to satisfying the needs of target audiences.
System of random checks- Starbucks is a brand which is using a method checks which is
done by several dominion administrators here their main obligation to check the baristas,
collecting data from several target audiences, taking response from them and checking drinks. So
that they are capable to assure that needed quality so being management in specific store.
Achievements- Maintenance of quality standards is a factor that is utilised by the
respective company to acquire a large share in marketplace. Starbucks has been able to
accomplish a good brand representation in the market because if its quality products. They have
attained many prestigious awards & also recognised as best coffee because they maintained the
quality standard when they manufacture products.

Exceptional quality of raw materials- Starbucks is utilising a surpassing quality of coffee
beans so that their potential clients can experience an unique and best quality and taste of coffee
flavour which is different fro m other substitute products and same brand (Schwarz, Hall and
Shibli, 2015). It is a diversification plan of action which is accepted by the respective firm so that
they are having a diverse benefit to sustain in this competitive marketplace.
Segmentation of market- It is also one of the approach which is utilised by Starbucks in
which they are trying to devise segmentation in their target market and supported on that they
concentrates on their number of products. The founder of the respective company always devise
endeavours that there are conveyancing innovative thoughts that can assist this company in
enlarging portfolio of their goods (Suarez, Calvo-Mora and Roldán, 2016). Strategic quality
thoughts, this coffee giant is viewing no decrement in their profit margins percentage and is also
anticipated that they will be able to successfully touch another successive sales development in
the year.
Preceding defined information are based on all over assessment of Starbucks which this
brand is doing in order to accomplish their quality extents and then sustain in the marketplace
while managing their profitability extent for a long term time frame.
Recommendations
There are several recommendations and suggestions which are being made by analysis of
above defined components which are as below:
 There is a requirement to accept some of the services when there are large number of
consumers which is influencing their sales. Such development in quality measures will
assist this firm in developing their standards and activity of supply chain.
 The all over appeal to consumer has to be devised better so that they are capable to
maximise their gross sales an market share (Thompson, Strickland and Gamble, 2015). It
is a tool and technique which will assist in having a category of consumers who are
knowledgable, civilized and technologically fascinated in having a immense target
audiences base. It will assist in maximising the sale and improving the brand image.
 In Starbucks, the quality is maintained but this is not only enough segmented from that
there is a desires that a system of continuous development is also native by this firm
which can assist in having a consistent quality in all outlets across world.

CONCLUSION
Form the preceding discussed information, it can be summarised that different aspects of
organisations which is affiliated with their activities of administration of their operations, are
essential for the running the business. There are several aspects which is having their influence
on overall functioning of the organisation like action of supply chain management, development
& maintenance of quality modular this outcomes into favourable or unfavourable brand
representation of a specific company. Quality management is an activity which is useful for
organisations in developing their brand image and also for conveyancing of their functions in a
more efficacious way. So that all set aims and objectives can be accomplished in effective
manner of set time frame.