Starbuck Case

Today, Starbucks has been well-known all around the world. Starbucks Coffee Company has been famous with its quality fresh-roasted coffee beans. They are constantly modifying their business and operations strategies in order to ensure continued growth and success.

One of its company strategies that are use today is competing on product quality. Although their coffee is a little bit expensive than the others competitors, they offer the highest quality of coffee in the world. Besides that, they also added the value in the pre-purchase level by using Starbucks Gold Card. This is a card that will save regulars cash and reward the customers once they make the initial purchase of the card. Rewards are including discounts on purchases, free drinks with every fifteen purchases, free beverage customization and so on.

Lastly, they also focus on customer satisfaction. By extensively training for employees, Starbucks hopes to maximize employee responsibility and attentiveness which resulting in a decrease in wait time at the purchase level. Furthermore, by closely tracking consumer needs and wants, Starbucks is able to introduce more variety products with a decrease in time between new product introductions. By decreasing wait time and increasing choices for customers, Starbucks hopes to increase loyalty among current customers and hopefully attract new customers at the post-purchase level.

Imagine the radical illogic: you can sit for five hours with a single cup of coffee. An MBA culture would never allow this -- it would be busy calculating the pathetic ROI on this customer loitering, analyzing the time value of the real estate, dividing it by the marginal cost of the coffee, and soon recommending that Starbucks charge by the hour, like a parking garage.

The truth is, though, that the comfortable chairs and couches have turned out to be a counterintuitive economic asset. They create loyalty. They drive business that might otherwise go elsewhere. They contribute to multiple customers gathering -- and spending.

Are you too wrapped up in "monetizing" your customers, instead of creating a business environment where they don't feel like a spending gun is always being held to their heads? Remarkable things will happen when you demonstrate some patience and confidence; confidence that if treated well, your customers will come back even if you're not the cheapest cup of coffee in town.