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The firm under analysis is Starbucks Corporation. Its headquarters is in the United States but has branches in fifty-eight countries around the world. The company specializes in the sale of coffee. These may come in a variety of mixes and flavors such as cappuccinos and lattes. Starbucks also sells smoothies and other cold drinks.
Customers also visit Starbucks to enjoy baked items such as sandwiches and pastries. The organization also offers ice cream in some stores and has a book and film subsidiary. One can find Starbucks stores in the UAE, Kuwait, Lebanon, Malaysia, China, France, Britain, Australia, Puerto Rico, Mexico, and many other countries. Starbucks is categorized as a provider of services (in the form of coffee) and goods (as mentioned above).
The company has approximately one hundred and forty-nine thousand employees working around the world. Its net come in 2011 amounted to $945.6 million while its total assets were $6.38 billion. Its total revenue was 10.71 billion while its operating income was $ 1.42 billion. The firm registered an increase in net income, operative income, and total assets from the previous year. Consequently, this company appears to be doing well.
The company has positioned itself as the preferred coffee destination in most countries owing to its ambient locations and a wide variety of coffee-related products. Many consumers visit Starbucks to experience exclusivity as offered by the firm. People are willing to pay slightly more for a cup of coffee in Starbucks than for other the same product in other stores/ restaurants.
It focuses on middle-income to high-end consumers. The organization has also grown dramatically owing to its employee-commitment, rapid international expansion as well as strong leadership. Nonetheless, the rate of growth in 2012 is not as high as it was in the late nineties and early 2000s.
Quality culture and global competitiveness
The quality culture in this organization is deeply engrained in the DNA of some of its employees. These systems may be found at the general organizational level and also in exclusive quality management departments. At the general organizational level, the company has three stages that begin with barista checks. Before the company serves coffee to its clients, it makes sure that the product is up to standard. The barista who serves coffee directly to buyers will taste it for consistency.
Thereafter, the area manager will perform random checks of coffee to find out whether the product meets their quality standards. The third phase involves outsourcing coffee tasting to a third party that will check on the quality of the product twice a year. All quality expectations are communicated to the various stores in the form of reports. Such a three-pronged approach reveals that the company possesses a quality culture.
Sometimes, it may communicate this information across its international subsidiaries so as to transfer the same high-quality procedures in these branches. Therefore, the company can boost its global competitiveness. Nonetheless, since the area manager and third-party assessments occur infrequently, then there is still room for drops in quality. This is the reason why some food critics in the US claim that Starbucks coffee is bitter. One of the above quality experts is probably not doing enough.
On the organizational level, the firm has a cross-functional team that works on its product offerings. This team is made up of representatives from the marketing, engineering, supplies, and operations team. All members of the team make their contributions about what needs improvement in the corporation, after getting feedback from clients. Furthermore, members of this team may even give their suggestions on the flavor combinations that they would like to try.
Additionally, the Starbucks quality team checks on its coffee machines to ensure that the devices are in perfect order. Employees are sensitized about how they can maintain them or repair. Despite these quality endeavors, several clients have complained about coffee leakage from their cups. Others claim that the firm does not listen to their suggestions because it does not work on improving the product-coffee. Additionally, customer service is inconsistent across similar branches in one country. Airport stores have received the greatest form of criticism (Warner, 2004).
On the quality control level, the firm also has a series of quality processes. First, it performs food sanitation reviews. Here changes in fixtures, designs and products in stores are examined. Additionally, the company instates test protocols in which operational processes as well as equipment developments are evaluated. Starbucks’ quality department looks into trends and patterns in the coffee industry through audits and consumer feedback to seize new opportunities.
Although the company has articulated its quality management portfolio well, it may have executed the latter strategy wrongly. When the organization noted that some competitors like McDonald’s are offering coffee at much lower prices, it decided to copy this approach to woo back clients; it introduced instant coffee. However, this has led to brand dilution as exclusivity is what Starbucks is all about. The quality control team got it wrong in this regard (Adamy, 2008).
At the quality management department, the organization also abides by safety standards in the food industry. However, in this era of global competitiveness, it is not enough to comply with external regulations; one must create one’s standards. Lastly, the quality management department also designs training programs for barristers and other employees who can maintain the same level of quality.
The major challenge for the company is to ensure the same level of consistency in it’s US-Based or Seattle –based chains is spread all over the world. Partnering with other businesses such as Barnes and Noble has minimized the quality of service provisions at Starbucks because employees from these external firms do not go through the same training programs. Additionally, a substantial number of employees in these companies have minimal knowledge about coffee and display poor customer service.
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Recommendations on an improvement plan
The quality improvement plan will encompass four major areas: personnel, work processes, quality improvement, assessment, and reaction. The personnel section is the biggest dilemma for the company. It can work on this aspect by clarifying job roles. All barristers, quality control managers, engineers and marketers need to be certain about their role in the organization (Anderson & Narus, 1998). In line with this, the company should stop partnering with non-coffee entities like Barnes and Noble for the sale of coffee.
It is simply not possible to merge these two aspects together, so the firm should focus on its core business. Customer service has deteriorated substantially in airports. In order to restore quality in its service provisions, the company needs to instate a rigorous training program for all its barristers around the world. They should learn about the quality of the product (coffee) and how to make it well. Specific emphasis needs to be given to the issues of friendly service as this is what made the firm special.
The second aspect of quality improvement will be work processes. First, the company must streamline work policies and procedures by documenting all processes. It can then eliminate some unnecessary procedures while boosting some (Goetsch & Davis, 2005). For instance, the company may need to invest in more espresso machines to avoid placement of coffee in flasks for long hours (this may have contributed to the bitter taste).
Assessment and reactions are a vital part of the quality improvement process. Although the company claims to have quality assessments in place, these are still not done frequently. Furthermore, few mechanisms of taking corrective actions exist in the company. When any challenges are found in the quality assessment process, corrective actions should be documented and implemented. Later, a review of the effectiveness of those actions should be done.
For example, when the company introduced recyclable coffee cups, it should have assessed the quality of the cups and found that they were deficient. After that, the firm should have taken corrective action by replacing the manufacturer and documenting this. It should then assess the effectiveness of that decision.
Starbucks must work on quality improvement, as well. Here, the company ought to focus on those conditions that are critical to the quality of products and services. The corporation needs to create a culture of correcting these flaws as soon as they occur, or shortly after if impracticable.
Three features should govern the quality improvement of coffee in the firm. It needs to fulfill specifications such that customers get the taste they are looking for. Additionally, the coffee needs to be consistent across all Starbucks sores regardless of where they are in the world. The same coffee in Starbucks Dubai should be found in Seattle, USA. Lastly, service provisions should uphold the company name.
Adamy, J. (2008). Starbucks to Shut 500 More Stores, Cut Jobs. The Wall Street Journal.
Anderson, J. & Narus, J. (1998). Business marketing: understand what customers value. Harvard Business Review 76(6), 53-65
Goetsch, D. & Davis, S. (2005). Quality Management for Organizational Excellence: introduction to total quality. NY: Pearson.
Warner, M. (2004). Cup of Coffee, Grain of Salt. New York Times, p. A14.