Caso Starbucks

9-504-016
REV: JULY 10, 2006

YOUNGME MOON JOHN QUELCH

Starbucks: Delivering Customer Service
In late 2002, Christine Day, Starbucks’ senior vice president of administration in North America, sat in the seventh-floor conference room of Starbucks’ Seattle headquarters and reached for her second cup of toffee-nut latte. The handcrafted beverage—a buttery, toffee-nut flavored espresso concoctiontopped with whipped cream and toffee sprinkles—had become a regular afternoon indulgence for Day ever since its introduction earlier that year. As she waited for her colleagues to join her, Day reflected on the company’s recent performance. While other retailers were still reeling from the post-9/11 recession, Starbucks was enjoying its 11th consecutive year of 5% or higher comparable store salesgrowth, prompting its founder and chairman, Howard Schultz, to declare: “I think we’ve demonstrated that we are close to a recessionproof product.”1 Day, however, was not feeling nearly as sanguine, in part because Starbucks’ most recent market research had revealed some unexpected findings. “We’ve always taken great pride in our retail service,” said Day, “but according to the data, we’re notalways meeting our customers’ expectations in the area of customer satisfaction.” As a result of these concerns, Day and her associates had come up with a plan to invest an additional $40 million annually in the company’s 4,500 stores, which would allow each store to add the equivalent of 20 hours of labor a week. “The idea is to improve speed-of-service and thereby increase customer satisfaction,”said Day. In two days, Day was due to make a final recommendation to both Schultz and Orin Smith, Starbucks’ CEO, about whether the company should move forward with the plan. “The investment is the EPS [earnings per share] equivalent of almost seven cents a share,” said Day. In preparation for her meeting with Schultz and Smith, Day had asked one of her associates to help her think through theimplications of the plan. Day noted, “The real question is, do we believe what our customers are telling us about what constitutes ‘excellent’ customer service? And if we deliver it, what will the impact be on our sales and profitability?”

1 Jake Batsell, “A Grande Decade for Starbucks,” The Seattle Times, June 26, 2002.________________________________________________________________________________________________________________
Professors Youngme Moon and John Quelch prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2003 President and Fellows of Harvard College. To order copies or request permission to reproducematerials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

504-016Starbucks: Delivering Customer Service

Company Background
The story of how Howard Schultz managed to transform a commodity into an upscale cultural phenomenon has become the stuff of legends. In 1971, three coffee fanatics—Gerald Baldwin, Gordon Bowker, and Ziev Siegl—opened a small coffee shop in Seattle’s Pike Place Market. The shop specialized in selling whole arabica beans to a niche market ofcoffee purists. In 1982, Schultz joined the Starbucks marketing team; shortly thereafter, he traveled to Italy, where he became fascinated with Milan’s coffee culture, in particular, the role the neighborhood espresso bars played in Italians’ everyday social lives. Upon his return, the inspired Schultz convinced the company to set up an espresso bar in the corner of its only downtown Seattle shop....