Executive summary
This paper looks at the history of Starbucks as well as the current situation of the company. The focus of the paper is on the principles on which the company was created and this is tackled in the background section of this paper. Besides the background, this paper identifies that Starbucks has had many problems relating to service operations.
These problems are summarized in the statement of the problem section and they are dealt with in detail under the analysis section. As will be identified in this section, the service operations problems of the Starbucks relate to cultural, labor as well as machine issues which have not been solved by the company.
In the recommendations section, the issues discussed and problems identified find their solutions as the paper in this section provides the potential way-out for the company to curb the problems discussed. Under the section of conclusion, the paper is summarized by looking at all issues discussed.
Background
Starbucks was founded in 1971 in Seattle, Washington. The founding of the company was by friends Jerry Baldwine, Siegal Zev as well as Gordon Bowker. The principle founding of the company was an answer to the romantic stories of a person’s love for coffee.
Built on this round, people immediately loved and associated with the company as one which provides an experience with coffee. It did not take so long for the company to build six more locations. These locations were also in Seattle. Overall, the momentum for expansion by the company has been kept for a long time.
In 1982 Howard Schultz joined the company as retail operations director. In Italy, he observed the operations of a certain machine called Italian espresso bars and intended to bring the idea to Seattle. He was able to convince the Bowker, Baldwin and Siegal, but was unable to incorporate it into company’s operations.
Schultz purchased the company for $4 million and merged with Giornale II in 1987 and opened up 17 stores (Zimmerman, 2007).
In the preceding years, expansion was in its earnest. Other stores were opened up in 1989 in Oregon, Portland. From this time onward, the management of the company has been concerned with the ideas of efficiency of service operations against maintaining the experience for which the company was founded on.
Problem Statement
The company faces the problem of achieving a customer service experience as well as interpersonal experience.
Analysis
Starbucks has faced many problems relating to service operations. These problems are domestic as well as international. The emergence of these problems has been because of the operating environment of the company which has had considerably expanded. With the increasing expansion, management of the service operations became a challenge.
This is because entering the global market affected the resource base as well as questioned on the adaptability of the company to work on unfamiliar grounds. With such expansion, labor, capital and such become increasingly scarce and presented the challenge of being fulfilled (Burks-Busing, 2009).
These conditions being created meant that the both the domestic and international operations could not be effectively abridged to meet the objectives of the company as well as fulfill the primary objectives of the consumers which made the operation of the company difficult.
Employee service
The objective of Starbucks has been to offer service to the customer which is customer friendly. In North America, the company has to some level achieved this. The development of this friendly atmosphere in the Starbucks stores throughout the world has however been a challenge.
One problem that has been identified by the company is that the employees coming in have not mastered enough on the skills of addressing the customer in the friendly way. It has been identified that even the industry level interpersonal skills had not been acquired by some employees.
This was to be a great challenge to the service operations of the company. This is especially because this very ideal is the one on which the company’s brand is built (Zimmerman, 2007).
The company, having identified that a foundational service operation objective was being missed decided to heavily invest in programs aimed at bringing the employee skills and typology of behavior to the level desired by the company to achieve the objectives. These programs were mainly hiring and training programs. These training programs however did not bear as much as anticipated.
Majority of the employee coming in still lacked the necessary interpersonal skills to achieve the objectives of the company. Still in relation to employees and the service they offer, the company identified that majority of them lacked enough knowledge on the products of the company.
As identified, the employees were somehow ineffective in their service sometimes not because of their lack of interpersonal skills but because of lack of enough knowledge on what hey were providing to the consumers (Zimmerman, 2007).
Besides the above, the idea of language was also an important hindrance to the service operations. As the company entered new markets, communication became a hindrance to offering the service because the employees who had been transported from the country could not communicate in the languages of the locals. This inability in the end led to a loss of the customer experience
Machine service
The expansion strategy which meant that many customers were to be served also meant that the company had to look into the efficiency of the service being offered. In the services offered, the norm by the company was use of machines for service. Initially the company was using the Marzocca Machine. This was however identified to be less efficient. To bridge the gap, the company decided to take on a new machine for this purpose called La Marzocca Machine (Zimmerman, 2007).
For the company, the service operation problem of efficiency at this end was solved. But this was not to be the end for the company. In little time, the company discovered that though efficient, the new tool had also eroded the customer experience. As they identified, the new machine, though working at a rate which was needed, also blocked the customers from having a view on the product in the preparation stage.
This, though not bringing direct challenge to the company, was identified as highly against the fundamental principle on which the company was built which is to provide an atmosphere to the customer, which is rich in experience.
The repercussions on this spiraled as the new ‘efficient’ machines also blocked the customer from further benefits including that of getting the aroma of the products are they are prepared. The blocking also happened in a way that blocked visibility between the customer and the barista. This was indeed the height of the operations service changes towards efficiency but away from customer experience.
Within time, customers were already complaining on the lack of experience (Zimmerman, 2007). They pointed out that the stores had departed from the heritage of the country. According to these complaints, the tradition North America is one where there is a rich experience and a sensational contact when food is to be consumed. As they stated, the store was critically lacking of this at the present moment (Zimmerman, 2007).
Cultural issues
The company in its expansion had identified China as a good market. As it rolled out programs here, I found out that the service operations were meeting problems especially emanating from cultural dimension.
For the company, the culture upon which the company was built upon which was that of the North America was not effective. It meant that the services were being offered at a lower than normal socializing because of this disparity in the cultures between those of the norm of the company and those for the people of China.
Recommendations and Conclusions
One important recommendation which can be made here is that the company implements a strategy of employing locals. As identified, the service operations of the company had been hampered by the fact that it was entering markets where there was disparity between cultures as well as language. Using locals is a solution to this because of two important reasons.
First is because these locals understand the language of the potential customers. This ensures that the interpersonal experience is enriched as the employees are able to communicate effectively with customers and thus meet their needs and preferences. The employment of locals should be taken as a strategy both on the international stage as well as at the home country level.
At the home country level, the company also finds consumer repulsion because of the different cultures in regions even within the same country. This can be solved by having people who come from the regions where the stores are established to be the employees to work in them.
Besides the above, it is also important that the company considers creating induction course to the employees. This will basically help them develop the needed interpersonal skills and assure the management they posses the rightly needed skills.
Conclusion
Several issues come to the fore from this discussion. First among these is that the achievement of the founding objective has been a challenge for Starbucks especially. As discussed, over the years, Starbucks has increasingly focused on achieving efficiency in the services offered.
This has in the end been followed by actions such as introduction of efficient machines. According to the discussion, though the objective of efficiency has been achieved, many other objectives including that of customer experience have been abandoned.
According to the discussion, besides the customer experience, interpersonal skills are another service operation presenting a problem to Starbucks. As has been identified in the paper, the problem of interpersonal communication in inadequacies is also caused by cultural diversity in the operational environments.
The paper does propose solutions. According to the paper, first, the company needs to employ locals as a way of offsetting the cultural problems. Besides, the paper proposes that the company trains the employees on the interpersonal skills as another strategy to alleviate the problems experienced.
References
Burks-Busing, M. (2009). Starbucks. New York: ABC-CLIO, 2009.
Zimmerman, A. (2007). Starbucks corp.: Clouds in your coffee. Charlottesville: University of Virginia Darden.