OPERATION MANAGEMENT REPORT: A CASE-STUDY ON THE KEY STRATEGIC AND OPERATIONAL ISSUES FACED BY ONE STARBUCKS COFFEE SHOP ON 91 CLARENCE STREET IN KINGSTON TOWN

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Kingston University

MSc in International Business Management

OPERATION MANAGEMENT REPORT:

A CASE-STUDY ON THE KEY STRATEGIC AND

OPERATIONAL ISSUES FACED BY ONE STARBUCKS COFFEE SHOP

ON 91 CLARENCE STREET IN KINGSTON TOWN

Submitted by: k1270095

Submission date: 16th December 2013

Lecturer: Alex Hill

Words count: 2288 words

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EXCUTIVE SUMMARY

This report focuses on analyzing the key strategic and business operation issues of a Starbucks coffee shop on

91 Clarence high street in Kingston town (Kingston Upon Thames, London, UK). The report identifies the

business context and main operational aspects of this Starbucks shop which will be shown briefly in the

Introduction part.

Methods of analysis include the secondary-data, primary-data (qualitative and quantitative research), relevant

theories and relative information from books, online databases, as also student’s works and so on.

The report figures out the problems of this Starbucks shop, such as the atmosphere and layout inside the

store, as also some customer services. However, those issues depend on many different cases which cannot

meet a specific solution to improve themselves. In addition, the general feedback of customers indicates that

although the problems exist, these issues are not big impacts.

Recommendation for the business of this Starbucks shop is to keep managing their current operating system

and extend their competitive advantage, based on the ideal location (order-winner), to target the potential

segment customers as non-coffee drinkers.

This report might not avoid the shortcomings and limitations itself. For instance, a lack of experience in doing

the actual surveys which led to incomplete data and information; some results are based on past performance

or general context which can be subjective.

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LIST OF CONTENTS

EXCUTIVE SUMMARY .......................................................................................................................................................... 1

LIST OF CONTENTS .............................................................................................................................................................. 2

LIST OF TABLES/ FIGURES .................................................................................................................................................... 3

INTRODUCTION ................................................................................................................................................................... 4

A business overview of the Starbucks shop on high street in Kingston town ............................................................ 4

Market order-winners and market qualifiers of this Starbucks shop......................................................................... 6

Alternative customer segments for this Starbucks shop ............................................................................................ 6

METHODOLOGY .................................................................................................................................................................. 7

Supplements ....................................................................................................................................................................... 8

For the Primary-data: ................................................................................................................................................. 8

Test the recommendation: ......................................................................................................................................... 8

ANALYSIS ............................................................................................................................................................................. 9

Analysis this Starbucks shop in the coffee market ........................................................................................................... 10

The general context of the coffee market in the UK ................................................................................................ 10

The context of the coffee market in Kingston town ................................................................................................. 11

Consider the different target market of two Starbucks shops in Kingston town ..................................................... 13

FINDING AND CONCLUSION .............................................................................................................................................. 15

RECOMMENDATION ......................................................................................................................................................... 16

REFERENCE LIST ................................................................................................................................................................ 17

BIBLIOGRAPHY .................................................................................................................................................................. 18

APPENDICES ...................................................................................................................................................................... 20

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LIST OF TABLES/ FIGURES

Title Description Page number

Table 1 An overview of Starbucks shop on high street in Kingston town – Own visualization 4-5

Table 2 Market segment by age of Starbucks shop in Kingston town – Own visualization 5

Table 3 Market order-winners or qualifiers of Starbucks shop on high street in Kingston 6

Table 4 Methodology of this report – Own visualization 7

Table 5 Time-line of the actual survey – Own visualization 8

Table 6 Operation functions – Own visualization 9

Table 7 Selected leading operators of branded coffee shops by turn over (£m), 2008-2012 11

Table 8 Location and customer-service rating of the coffee shops of Starbucks and Costa in Kingston town

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Table 9 Commuters and captive-consumers – Own visualization 13

Table 10 Life-style and behavior – Own visualization 13

Figure 1 UK Coffee shops market size and forecast, 2008-18 4

Figure 2 Outlet numbers of selected leading specialist coffee chains, 2011 and 2013 10

Figure 3 Factors influencing where hot drinks are purchased out of home, July 2013 12

Figure 4 Apply Maslow’s 3rganizat of needs on the target market of Starbucks shops in Kingston town – Own visualization

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Figure 5 Improvement process 16

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INTRODUCTION

Starbucks is a famous brand with a worldwide chain of coffee shops. As can be seen in the figure 1 (Mintel,

2013c), the UK coffee shop market is achieving a modest growth in recent years, based on the improvements

in the confidence of consumers (estimated market size of £1.4 billion in 2013).

Figure 1. UK Coffee shops market size and forecast, 2008-18 (Mintel, 2013c)

A business overview of the Starbucks shop on high street in Kingston town

This section of the report first provides an overview and comment of the business context on one Starbucks

shop in Kingston town which can be seen briefly in Table 1 below. In addition, table 1 identifies the customers

and the services supplied to the customers. It also points out the market share and main competitors of this

Starbucks in general coffee market.

Starbucks coffee shop in Kingston town

Categories Detail General comment

Location 91 Clarence Street, Kingston Upon

Thames, London, UK

Ideal location

Brand Global famous brand name Competitive advantage: loyalty customers

Brand positioning The concept of “Third Place” Unique and very effective

Service system Fast-food delivery service Customer journey: Starbucks staff ask

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More self-service for customers customers’ name, good delivery reliability

Inside context:

space/ layout/

facilities

- Small, one floor

- Available seats: 55-60

- Facilities: average

Maximize their small space efficiently

Noisy, busy, uncomfortable, especially on

Saturday

Products Main products: coffee, coffee latte

Amount of consumption: 900 drinks/ day

High quality – Customers specially love coffee

latte

Price average at £3 (both drinks and

foods)

High price

Large range of options Satisfy the customer’s needs

Product life cycle Different and flexible Can be considered at maturity stage

Main competitors Costa, Nero, Republic Healthy competition

Market share Estimated at 20% in general market (this

data is conjectured and will be explained

in the Analysis part)

High market share and sustainable growth

because Starbucks also has another shop

nearby in the Bentall centre

Target market Commuters, different age segments, life-

style and behaviours of customers

The majority of customers is whom travel and

move around high street

Table 1. An overview of Starbucks shop on high street in Kingston town – Own visualization (Source: online resources and perspective from Primary-data and practical survey)

From the customer’s overall assessment, this Starbucks shop is not high in quality for space, layout, facilities

(e.g. complaint about the seats, toilet..); however, the main strategic operation of this shop is not to keep

customers staying longer but to increase sales and profits, as maximize all the possible advantages, based on

its ideal location.

Table 2 illustrates one way to identify the target market of this Starbucks shop, based on age segment, which

can also describe the coffee and drink products supplied to their customers.

Age Proportion of

Starbucks’ sales

Percent of the

growth rate

Typical products

Adults (main target) 25 to 40 49% 3% Coffee Latte

Young adults 18 to 24 40% 4.6% Coffee Latte, Sugary Coffee

Kids and Teens 13 to 17 2% n.a. Babyccinos, Smoothie, Caffeinated,

Whipped cream

Others n.a. 9% n.a. n.a.

Table 2. Market segment by ages of Starbucks shop in Kingston town – Own visualization (Source: Primary-data and Small Business, 2013)

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Market order-winners and market qualifiers of this Starbucks shop

Table 2 indicates the market order-winners and qualifiers of the operation of this Starbucks shop (as

considering with a Starbucks and Costa shop in the Bentall centre)

Operational Components Order-Winner or Qualifier

Price Q

Quality conformance Q

Delivery reliability Q

Delivery speed Q

Service or product range Q

Service or product design Q

Demand fluctuations Q

Speed or new service of product development Q

Some additional operational components:

Location OW

Brand/ Reputation Q

Space/ layout/ facilities of shop Q

Shop atmosphere Q

Loyalty program Q

Corporate social responsibility (CSR) Q

Table 3. Market order-winners or qualifiers of Starbucks shop on high street in Kingston town [Source: Primary-data and Operation Management book (Hill and Hill, 2012)]

Alternative customer segments for this Starbucks shop

Non-coffee drinkers

As assessed above, the market order-winner of Starbucks shop on 91 Clarence street is the location. It means,

this Starbucks shop has a chance to access the variety and diverse types of consumers which can be everyone

that travels and moves around Kingston town. In other words, it can be an alternative operational strategy for

this shop. Therefore, follow this point, it can be suggested that an alternative customer segment for this

Starbucks shop is to target the non-coffee drinkers. Non-coffee drinkers are who have no experience about

drinking coffee; however, they have the needs for delicious drinks. Some products of Starbucks, as

Frappuccino with contain high percentage of milk, can be attractive for the taste and flavor of this new

segment market.

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METHODOLOGY

The methods of this report can be described in detail as table 4 below:

METHODS DESCRIPTION HOW/ WHERE

Secondary-

data

Using market reports of online sources as Mintel, Keynote. The secondary

data supports to have an overview of the coffee market in general context to

analyse the Starbucks shop on high street in particular. Mintel and Keynote

reports are made by the experts on the market survey which are important

and necessary for both purposes of studying and practices

The Secondary-

data is used for

the whole

report

Primary-

data

Some actual survey with Starbucks’ customers (qualitative and quantitative

research) and an interview with Starbucks’ manager (qualitative research).

The primary-data supports on understanding the core operating system of

this Starbucks shop and helping to access the specific information that need

to involve in this report

The Primary-

data can be

found in the

Appendices part

Relevant

and relative

information

Any types of online resources (e.g. blogs of customers’ reviews, articles about

the issues surrounding this Starbucks shop and so on). This methodology can

be similar to the secondary-data but it includes more non-academic

information

This method is

applied through

the report

Knowledge

application

Operation Management book and academic database (i.e. using the theory of

Maslow’s hierarchy of needs for the target market of this Starbucks shop)

This method is

used for the

whole report

Group work After doing the practical survey and collecting data, the Kingston University

students, who chose to write similar report on this Starbucks shop, discussed

and analysed all information together. Because the purpose of this report is

to understand about the operation issues of an 7organization or business;

therefore, the students have assumed themselves as different parts of a

business and support each other to understand how the operating system

works, as also be able to see the problems under the managers’ perspective.

Students divided main basic parts of the report, which can be the same, to

work on individual (e.g. background of market context, the market share, the

target market..) and then share for other members to work on it again.

Each member can contribute and give their ideas based on their particular

skill to improve different aspects of the report (e.g. a figure of the floor plan)

This method is

used for the

whole report;

some work can

be found in the

Appendices part

Table 4. Methodology of this report – Own visualization

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Supplements

- For the Primary-data:

Respondents – There were four staff and one manager of this Starbucks shop for the surveys’ interviews. The

customers have been chosen randomly, 40 people, which also include four members of the student group. The

students directly used the products and services of the Starbucks shop on high street to get the assessments

from customers' views.

Limitations - Due to the inconvenient issues in communicating of a public place with limited time, the students

were not able to record the video or voice of the interviewees during the experimental market survey. Data

and information have done with their personal laptops, writing-notes and verbal exchanges.

Time-line - The survey was carried out in four days:

Date Significant feature Methods

Saturday (7th December 2013) considered as the busiest day of

this Starbuck shop

qualitative market research with

random customers and four staff

Sunday (8th December 2013) quantitative market research with

random customers

Monday (9th December 2013) the only day which manager will

come and work at here

qualitative market research, an

interview with manager

Wednesday (11th December 2013) review the layout and space of the

shop to redraw its floor plan

Table 5. Time-line of the actual survey - Own visualization

In addition, the students also used the Saturday above to do research of another Starbucks shop and their

main competitors, such as Costa and Nero, in the Bentall centre.

- Test the recommendation:

The process of the survey on customers' general feedback shows that they do not particularly love this

Starbucks shop. Nevertheless, they are completely satisfied with the inconvenience (e.g. layout, atmosphere)

and feel more comfortable with the convenience (e.g. ideal location, customer service and so on). Based on

that, as considered the operation of this Starbucks shop till far, the problems which this shop is meeting are

not large enough to cause an adverse effect on it. This Starbucks shop can keep maintaining its current

operating status, and aims to further expand its business into the different customer segments. The survey

indicates that the frequency of people who visit the store is high; however, it needs more time to ensure that

the non-coffee drinkers can be a potential market.

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ANALYSIS

According to Reid and Sanders (2010), operation functions of a business focuses on specific capabilities which

give it a competitive edge or competitive priorities such as cost, quality, time and flexibility. From the practical

survey and online resources, it can be argued that the Starbucks coffee shop on high street in Kingston town is

managing its operation in the most effective way [see Table 6].

Table 6: Operation functions - Own visualization [Source: perspective from practical survey, Reid and Sanders (2010)]

The service delivery system of this Starbuck shop is to push up the rotation speed of the sales and the

customers' purchasing power with the most possible advantages of the infrastructure that it owns. Although

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this Starbucks shop has a moderate space, it improves as much in the arrangement and construction of the

equipment, as also the place of its counters and employee which are suitable for a fastest customer journey.

Analysis this Starbucks shop in the coffee market (compare with another Starbucks shop and its main competitors, Costa coffee which both located in Kingston town)

- The general context of the coffee market in the UK

According to Mintel (2013a), Starbucks has encountered some issues with the payment of UK corporation tax

in 2012/13. This caused a bit of the negative impact on Starbucks’ brand image and reduced a small amount of

consumers to all Starbucks’s shop around the UK. Meanwhile, Costa Coffee was continuing to lead the coffee

shops market which is considered as the biggest rival of Starbucks. As can be seen in Figure 2 (Mintel, 2013a),

the number of Costa Coffee outlets as twice compared to Starbucks. This can partly reflects the market share

of the coffee shop brand.

Figure 2. Outlet numbers of selected leading specialist coffee chains, 2011 and 2013 (Mintel, 2013a)

By considering the leading operators of branded coffee shop's turnover from 2008 to 2012, it can be seen

from Table 7 (source: Keynote, 2013) that although Starbucks was always higher than Costa, its growth was

very slow for each next stage. In contrast, Costa had significant step forward and was closing the turnover gap

to Starbucks (from £157.2m in 2008 to £20.4m in 2011). Analysis of the data, such as market share based on

turnover and the turnover gap between Starbucks and Costa, is also shown in Table 7 below.

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Table 7: Selected leading operators of branded coffee shops by turn over (£m), 2008-2012 (Source: Keynote, 2013)

- The context of the coffee market in Kingston town

Table 8 shows the locations of the coffee shops of Starbucks and Costa in Kingston town and the overall rating

for the quality of customer service on these places.

Location Rating

Starbucks 91 Clarence Street, KT1 1QY 7/10

Ground floor, The Bentall Shopping Centre, Wood Street, KT1 1TR 7/10

Costa Kingston Station, Wood Street, KT1 1UJ 6/10

The Bentall Shopping Centre, KT1 1TR (3 shops) 8/10

34 Market Place, KT1 1JQ 6/10

Table 8: Location and customer-service rating of the coffee shops of Starbucks and Costa in Kingston town

- Own visualization (Source: Primary-data and relevant online database)

As also from the experimental investigation, the general context of the coffee market in the UK seems to be

compatible with the context in Kingston town. The number of Costa outlets is also overwhelming than

Starbucks stores in Kingston town. That may create a large market share for Costa. However, Starbucks'

market share here still seems to be more dominant due to their ideal location. Both of two Starbucks shops

here are located in convenient places, especially the Starbucks shop on 91 Clarence Street, which completely

attract a large number of potential customers. If consider that the percent of market share will be similar from

the general context to the particular context in Kingston town, the market share for both of these Starbucks

shops is also estimated at 40% and 20% for each of them (if they balance in the business operation).

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To strengthen the argument above about the sustainable market share of Starbucks outlets, from the factors

affecting the hot drinks purchase of customers (Mintel, 2013c), location is the most important factor, as

opposed to the coffee brand [see Figure 3]. As also from the reaction and feedback of coffee customers in

Kingston, it can be argued that:

- Location is placed in high positions of customers' priorities: Starbucks shop on 91 Clarence Street hold

the high market share position

- Brand is placed in low positions of customers' priorities: Starbucks shop on 91 Clarence Street do not

face the tax issue which affects their brand image negatively as mentioned above

Figure 3. Factors influencing where hot drinks are purchased out of home, July 2013 (Mintel, 2013c)

In addition, with the two Starbucks shops that near each other, it can be stated that they can conflict

themselves on business operations, market sales and so on. Nevertheless, both these Starbucks shops are

running the good system, being flexibility to support themselves on promoting the general business

operations of Starbucks.

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- Consider the different target market of two Starbucks shops in Kingston town

From the interview with the manager of the Starbucks on 91 Clarence street, because of the flexibility in

operation function of Starbucks, their shops in different location can meet the different customers’ needs. As

also based on some online research, it seems to have three ways to identify the target market of Starbucks in

Kingston:

Commuters and captive-consumers: both Starbucks shops meet the needs of commuters

Commuters someone traveling to or from work, out shopping, lunch breaks or delivering goods or services

and so on

Captive-

consumers

someone who is in a restricted entry environment (e.g. high school, college campuses, special

events) that does not allow convenient departure, free movement and return while searching

for refreshment, or where refreshment stands are an integral part of the environment

Table 9. Commuters and captive-consumers - Own visualization (Source: perspective from practical survey and UMSL, 2013)

Age segments: this target market can be also applied for both Starbucks’ shops, it also points out the

typical products for each market segment of customers [See table 2 in the Introduction part]

Life-style and behavior: this target market can nearly be divided into two different segments for two

Starbucks shops in Kingston; depends on the different needs, wants and demands of customers

91 Clarence Street Most of customers who want to get a quick relaxation and have an easy day – more self-

service and self-actualisation needs

The Bentall Centre Most of customers who want to feel welcome, relaxed and important, impress a date

and socially interactive – more social needs

Table 10. Life-style and behavior - Own visualization (Source: perspective from practical survey Novilla, 2011)

The Starbucks’ operation model, as McDonald's, is type of fast-food company and organisations nowadays;

therefore, customers seem to be self-initiative for a self-service in the delivery process of product. From the

perspective of the practical survey, one of the reasons (for the inconsistency of these two Starbucks stores)

comes from the layout based on their surface area. Starbucks on 91 Clarence Street does not have a large

space for social activities like Starbucks in the Bentall Centre. However, at Starbucks shop on 91 Clarence

Street, a busy atmosphere can create a faster trend for the transfer of product sales.

If using five stage models of Maslow's Hierarchy of Needs, the target market for two Starbucks in Kingston

town can be considered as in figure 4 below:

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Figure 4. Apply Maslow's hierachy of needs on the target market of Starbucks shops in Kingston town

- Own visualization (Source: Simply Psychology, 2013)

In brief, the customers come to Starbucks shop on 91 Clarence Street for more self-service; they make fast

delivery, mostly buy take-away drinks and spend less time to stay in the shop. On the other hand, with

Starbucks in the Bentall Centre, customers often sit longer for a group meeting, friendly communication and

social needs.

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FINDING AND CONCLUSION

From the above analysis of the business operating system of Starbucks shop in Kingston, as Joel (2008)

mentioned in his article, it can be suggested that the market orientation of their shop on high street focuses

more on the market driving approach than the market driven approach. This Starbucks shop is flexible in its

operation, proactively change and create new customers or markets easily. It focuses more on increasing the

speed of the delivery service and improves the possible opportunities that based on its ideal location. In

addition, it is extending the internal dynamics for the operation and intra-firm behavior with configurable

advantage on the market ownership.

From the practical investigation, it indicates that the atmosphere and layout, as some customer services of the

Starbuck shop on high street can be the obstacles for its business operation. However, from the general

reaction of customers, those issues perfectly do not influence as much to this Starbucks shop.

As can be seen in Figure 4, this Starbucks shop meets the highest philosophy needs of customers. Nonetheless,

other rivals of Starbucks, as Costa coffee outlets, also be able to meet these requirements. To create a

competitive advantage, Starbucks shops need to consider their operation strategy based on the order-winners

as their ideal location in the context of the Kingston coffee market. This argument leads to the

recommendation that the Starbucks shop on high street should target an alternative customer segment, non-

coffee drinkers.

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RECOMMENDATION

Taking everything into consideration, the recommendations for future actions of the Starbucks on high street

in Kingston town can be identified as:

Maintain the current operations of its business

Expand the market into new target customers as non-coffee drinkers

As stated in the Operation Management book (Hill and Hill, 2012), “Organisations must continually look for

ways to improve operations”. Therefore, it can be argued that the action as keep managing the current

operations of the Starbucks shop on high street is not the most effective solution for unpredictable issues in

future. On the other hand, if this Starbucks considers on the way of expanding the target market, it can apply

the Improvement process for improving the operations of an organisation [see figure 5]. Adding to this point,

with the new market segment, this Starbucks shop can focus on developing the mixed-ingredient for its

product chain. This recommendation requires the agility and flexibility of the business operations on product

strategy. For example, coffee beverage can contain the high percentage of milk or different flavours that are

suitable to the taste of the non-coffee drinkers. As an expected consequence, this Starbucks shop still can

keep its brand image as a famous worldwide chain of coffee shops but improve its business operation on a

new potential market.

Figure 5. Improvement process [Source: Operation Management (Hill and Hill, 2013)]

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REFERENCE LIST

Hill, A. and Hill, T. (2012) Operations Management, 3rd Edition, Macmillan [Digitally] Available at: http://www.

coursesmart.co.uk/IR/5238660/9780230362901?__hdv=6.8

Joel, D. (2008) ‘Market driven vs. market driving’, 2nd December 2008 [Online]. Available at: http://delwin joelmarketing.blog.com/2008/12/02/market-driven-vs-market-driving/ [Accessed: 13th December 2013]

Keynote (2013) ‘Coffee & Sandwich Shops 2013’ *Online+. Available at: http://www.keynote.co.uk. ezproxy.kingston.ac.uk/ajax/site/browser/download?productId=109549 [Accessed at: 9th December 2013]

Mintel (2013a) ‘Coffee Shops – UK – October 2013: Executive Summary’ *Online+. Available at: http://academic.mintel.com/sinatra/oxygen_academic/attachment/id=638274&seq=1 [Accessed at: 9th December 2013]

Mintel (2013c) ‘Coffee Shops – UK – October 2013: Infographic Overview’ *Online+. Available at: http://academic.mintel.com/download/pdf/report_infographic/638274/ [Accessed at: 9th December 2013]

Novilla, H. (2011) ‘The 10 Step Marketing Plan for Starbucks Coffee?’, Slideshare, October 2011[Online]. Available at: http://www.slideshare.net/Homieboi/starbucks-9784106 [Accessed: 15th December 2013]

Reid, R.D. and Sangers, N. R. (2010) Operations Management, 4th Edition, Wiley, ‘Chapter 2 – Operations Strategy and Competitiveness’ *Online+ Available at: http://www.wright.edu/~george.polak/ch02.ppt [Accessed: 13th December 2013]

Simply Psychology (2013) ‘Maslow’s Hierarchy of Needs’ [Online]. Available at: http://www.simply psychology.org/maslow.html [Accessed: 14th December 2013]

Small Business (2013) ‘Who Is Starbucks' Target Audience?’ *Online+. Available at: http://smallbusiness. chron.com/starbucks-target-audience-10553.html [Accessed: 14th December 2013]

Umsl (2013) ‘Starbucks coffee – Marketing Management’, University of Missouri-St. Louis [Online]. Available at: http://www.umsl.edu/~chewl/4700/STARBUCKS_CASE_01/Starbucks.ppt [Accessed: 13th December 2013]

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BIBLIOGRAPHY

Bains, L. (2010) ‘Starbucks Listens to Customer Feedback: A Case Study’, 8th July 2010 [Online]. Available at: http://survey.cvent.com/blog/market-research-and-survey-basics/starbucks-listens-to-customer-feedback-a-case-study [Accessed: 11th December 2013]

Consumer affairs (2013) ‘Top 242 Complaints and Reviews about Starbucks’ *Online+. Available at: http://www.consumeraffairs.com/food/starbucks.html [Accessed: 9th December 2013]

Costa (2013a) Official Website of Costa Coffee [Online]. Available at: http://www.costa.co.uk/ [Accessed: 13th December 2013]

Costa (2013b) Official Website of Costa Coffee – Store locator [Online]. Available at: http://www. costa.co.uk/locations/store-locator/ [Accessed: 13th December 2013]

Distilled (2013) ‘What is Starbucks missing from its marketing strategy’, Slideshare, 30th September 2013 [Available at: http://www.slideshare.net/DistilledSEO/starbucks-marketing-web-3 [Accessed: 13th December 2013]

Forbes (2012) ‘3 Reasons Why Starbucks Still Shines, Despite Market Shortcomings’, 6th August 2012 [Online]. Available at: http://www.forbes.com/sites/rachelhennessey/2012/08/06/3-reasons-why-starbucks-still-shines -despite-market-shortcomings/ [Accessed: 14th December 2013]

Forbes (2013) ‘Starbucks: Loyalty Program Misfire’, 23rd July 2013 [Online]. Available at: http://www.forbes.com/sites/rogerdooley/2013/07/23/starbucks-gold/ [Accessed: 9th December 2013]

Hill, A. and Hill, T. (2012) Operations Management, 3rd Edition, Macmillan [Digitally] Available at: http://www. coursesmart.co.uk/IR/5238660/9780230362901?__hdv=6.8

Huggins, C. (2013) ‘How will Starbucks maintain its competitive advantage?’, 6th May 2013 [Online]. Available at: http://blogs.desmoinesregister.com/dmr/index.php/2013/05/06/how-will-starbucks-maintain-its-competi tive-advantage/article?nclick_check=1 [Accessed: 14th December 2013]

Keynote (2013) ‘Coffee & Sandwich Shops 2013’ *Online+. Available at: http://www.keynote.co.uk. ezproxy.kingston.ac.uk/ajax/site/browser/download?productId=109549 [Accessed at: 9th December 2013]

Joel, D. (2008) ‘Market driven vs. market driving’, 2nd December 2008 [Online]. Available at: http://delwin joelmarketing.blog.com/2008/12/02/market-driven-vs-market-driving/ [Accessed: 13th December 2013]

Manifested Marketing (2012) ‘Starbucks – Relationship & Service Marketing’, 16th March 2012 [Online]. Available at: http://manifestedmarketing.com/2012/03/16/starbucks-relationship-services-marketing/#comm ents [Accessed: 14th December 2013]

Mintel (2013a) ‘Coffee Shops – UK – October 2013: Executive Summary’ *Online+. Available at: http://academic.mintel.com/sinatra/oxygen_academic/attachment/id=638274&seq=1 [Accessed at: 9th December 2013]

Mintel (2013b) ‘Coffee Shops – UK – October 2013: Issues in the Market’ *Online+. Available at: http://academic.mintel.com/sinatra/oxygen_academic/attachment/id=638274&seq=2 [Accessed at: 9th December 2013]

Mintel (2013c) ‘Coffee Shops – UK – October 2013: Infographic Overview’ *Online+. Available at: http://academic.mintel.com/download/pdf/report_infographic/638274/ [Accessed at: 9th December 2013]

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Mintel (2013d) ‘Coffee Shops – UK – October 2013: Report Brochure [Online]. Available at: http://academic.mintel.com/editorial/report_brochure_editor/pdf/638274?language_code=en [Accessed at: 9th December 2013]

Nero (2013) Official Website of Nero Coffee [Online]. Available at: http://www.caffenero.com/default.aspx [Accessed: 13th December 2013]

Northrup, L. (2013) ‘Why Should Starbucks Give You A Loyalty Discount? You’re Already Addicted’, 26th March 2013 [Online]. Available at: http://consumerist.com/2013/03/26/why-should-starbucks-give-you-a-loyalty-discount-youre-already-addicted/ [Accessed: 10th December 2013]

Novilla, H. (2011) ‘The 10 Step Marketing Plan for Starbucks Coffee?’, Slideshare, October 2011[Online]. Available at: http://www.slideshare.net/Homieboi/starbucks-9784106 [Accessed: 15th December 2013]

Quirk, M. B. (2012) ‘Starbucks To Gold Card Customers: Sorry, We're Not Paying For Your Lactose Intolerance Anymore’, 18th September 2012 [Online] Available at: http://consumerist.com/2012/09/18/starbucks-to-gold-card-customers-sorry-were-not-paying-for-your-lactose-intolerance-anymore/ [Accessed: 10th December 2013]

Ramaika, J. (2013) ‘Starbucks C.A.F.E. Practices vs. Fair Trade Certified Coffee’, 11th January 2013 [Online]. Available at: http://pennstatebrandywinefairtrade.wordpress.com/2013/01/11/starbucks-c-a-f-e-practices-vs-fair-trade-certified-coffee/ [Accessed: 12th December 2013]

Reid, R.D. and Sangers, N. R. (2010) Operations Management, 4th Edition, Wiley, ‘Chapter 2 – Operations Strategy and Competitiveness’ *Online+ Available at: http://www.wright.edu/~george.polak/ch02.ppt [Accessed: 13th December 2013]

Rice, D. (2012) ‘12 Most Caffeinated Customer Service Lessons from Starbucks’, 28th February 2012 [Online]. Available at: http://12most.com/2012/02/28/12-caffeinated-customer-service-lessons-starbucks/ [Accessed: 11th December 2013]

Schepp, D. (2012) ‘Starbucks: Best Part – Time Jobs in Retail – Or overrated?’, 21st September 2012 [Online]. Available at: http://jobs.aol.com/articles/2012/09/21/starbucks-is-hiring-health-plan-good-coffee-but-watch-out-for/ [Accessed: 13th December 2013]

Simply Psychology (2013) ‘Maslow’s Hierarchy of Needs’ [Online]. Available at: http://www.simply psychology.org/maslow.html [Accessed: 14th December 2013]

Small Business (2013) ‘Who Is Starbucks' Target Audience?’ *Online+. Available at: http://smallbusiness. chron.com/starbucks-target-audience-10553.html [Accessed: 14th December 2013]

Starbucks (2013a) Official website of Starbucks [Online]. Available at: http://www.starbucks.co.uk/ [Accessed: 13th December 2013]

Starbucks (2013b) ‘ Working at Starbucks’ *Online+. Available at: http://www.starbucks.com/careers/working-at-starbucks [Accessed: 13th December 2013]

Umsl (2013) ‘Starbucks coffee – Marketing Management’, University of Missouri-St. Louis [Online]. Available at: http://www.umsl.edu/~chewl/4700/STARBUCKS_CASE_01/Starbucks.ppt [Accessed: 13th December 2013]

20

APPENDICES

PRIMARY-DATA

The questionnaire model for quantitative market research on random customers

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The questionnaire model for qualitative market research on an interview with manager:

QUESTIONS ANSWERS

Which is the busiest day? And busiest time? Saturday from 11am-5pm

How many employees? How are they array

during the day?

5-6 staff per day and switch position in standing place

Which is the average age of customers? Adults from 38-40

Do people who come in the morning have

different needs (order different things) in

comparison who comes in the

afternoon/evening?

Yes! The same to everywhere else. Depends on time,

careers... In the morning, most people come for coffee, they

just come and students move to school, workers move to

office.. etc.. They have stayed longer at noon, buy meals to

eat and relax for the rest of the day with having a talk with

friend or using computer and so on here

What make people come to Starbucks?

(location, product, customer service, etc)

Loyalty and location.. Starbucks is a strong brand which be

popular and famous

What do you think about the competition

(Costa, Nero)?

All are doing well as different shops serve different needs

Are all Starbucks the same everywhere? Not at all. Starbucks shops keep the core value of the brand

image with same menu lists, same service system but

because of the location, the space of store ..etc.. different

shops will be flexible to serve the different needs of

customers

Do you sell always the similar products? Yes

How many new products have been

introduced in the last 6 months?

No but Starbucks always think of creating a new innovation

for products, customer services and so on

Which product consumers buy most? Which is

the best-selling product?

Coffee-Latte

Has Starbucks changed the flavour and taste

of coffee before?

Yes

Starbucks is a coffee shop. How about the

meal? Do you sell more sweetie or salty food?

Starbucks is a coffee shop, just sell enough and suitable

foods to serve the different wants of customers

How much is Starbucks’ income per day? Private issue. Cannot answer

How many coffee does Starbucks can sell per About 900 beverages

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day?

Would you change/ improve/ introduce a

practice/product or something else as

Christmas is coming??

Yes. Every year

Why do people like the atmosphere here? Do

you think is a good idea to make the

environment more comfortable?

Most of customers are comfortable. They come here to talk,

meet friends, working with their laptop and so on

Do you think Starbucks is meeting the needs

of young people more than other ages?

Not at all. It depends on do they love coffee or not.

Can you say to us any complaint that you have

received since the time you started working

here?

About 4 weeks of working time till now, there still are no

complaints

There are some negative feedback from

customers like:

- Coffee’s taste not the same

- Not comfortable to stay in

- Toilet is bad

- Negative image of how staff clean

table and collect the trash

- Busy and noisy

- Feeling like Starbuck doesn’t want to

keep customers stay longer

What you wanna say about these things? how

would you deal with that? Any suggestion?

Will Starbuck improve it or it is how Starbucks

work?

Do not realize that these issues exist.

Explain that some issues are not problems.

Of course, find the ways to improve those cases.

Have you ever worked for other Starbucks?

Are they different?

About 4 stores already and each shops are flexible to

improve and develop their own ways of working and so on

Are you happy to work in Starbucks? Why? Yes and let be a partner of Starbuck to know the reason

Can you, from your own opinion, say one

aspect that Starbucks want to improve?

Being consistency

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The floor plans of Starbucks shop on 91 Clarence Street in Kingston town which has been redrawn by

a student for the group work: