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Overview

Product lines
1. Handcrafted beverages
Freshly brewed coffee
Hot and iced espresso beverages
Coffee and non-coffee blended beverages
Vivanno Smoothies
Tazo Teas
2. Bakery items
Pastries
Sandwiches
Salad
Oatmeal
Fruit-cups
3. Merchandise
Mugs
Tumblers
CDs
Coffee and tea brewing equipment
Other gift items
4. Seasonal products
Chestnut Praline Latte
Smoked Butterscotch Latte
Holiday Spice Flat White

Mission Statement
6 Principles: They emphasize on six basic principles.
Target Market
Starbucks has a well-defined target audience that includes

Adults
Account for 49% of its total businesses
It grows at a rate of 3% annually
Young adults
Account for 40% of Starbucks sales
It grows at a rate of 4.6% annually
Kids and teens
Account for just 2% of Starbucks sales
Most items for kids are purchased by the parents.
Operations Management
Starbucks Coffees business fulfills 10 decisions of operations management
through varying strategic initiatives for productivity and management in different
areas of the organization.
1. Design of goods and services
Starbucks has a broad differentiation generic strategy, along with its
premium pricing strategy.
Broad differentiation generic strategy
Starbucks continues innovating to ensure differentiation in the long
term. This generic strategy could lose its strength when competitors
also find ways to stand out. To address this issue, Starbucks keeps
innovating its product mix and supply chain.
In applying the broad differentiation generic strategy, Starbucks
focuses on specialty ingredients and products, such as baked goods
that do not have high-fructose corn syrup.
Starbucks also innovates its supply chain to satisfy its generic strategy
through a continuing search for the most sustainable and finest
ingredients.

Premium pricing strategy


Starbucks uses a premium pricing strategy.
This pricing strategy takes advantage of the behavioral tendency of
people to purchase more expensive products on the basis of the
perceived correlation between high price and high value.
The companys coffee products are more expensive than most
competing products, such as McDonalds Premium Roast. Through
this pricing strategy, the company maintains its high-end specialty
image.
This part of Starbucks Coffees marketing mix directly relates with the
firms generic strategy, thereby helping the business maintain its
premium brand image.
Other firms, such as manufacturers, are also involved in the design of some
goods like Starbucks mugs. In this decision area of operations management,
Starbucks ensures that its goods and services reflect the firms high-end
brand image.

2. Quality management
Starbucks also uses several quality systems to provide adequate service to
the customers.
Random check-ins
It uses random check-ins from district managers wherein they check the
baristas, talk to the customers to acquire feedback, and check drinks to
ensure quality.

EcoSure
It also uses EcoSure to perform checks of the required qualifications every
six months for all the stores to ensure that the quality standards are
maintained including cleanliness, order of equipment, unpleasant odors etc.
The team then assigns points to address whether a store has passed or failed
the assessment.
Employee Empowerment
Moreover, Starbucks considers empowering employees as a quality system
by mobilizing them to become brand evangelists and providing them with
sufficient employee benefits. Discounted stock purchase options, health
coverage, adoption assistance, College achievement plan, time-off programs,
30% instore and online discounts.
Quality of Design
It has a cross-functional design team, including members from
marketing, engineering, operations, and other departments are
responsible for the quality of design.
Customer needs are taken into consideration during this process.
The CEO of the company added even more choices after spending
time in Italy
They experiment with many different combinations and flavors, which
is what makes them so popular today.
Quality of conformance and Availability
Starbucks meets specifications by allowing customers to have their
coffee to their liking, non-fat, decaffeinated, foam, a shot of espresso,
and other personalized options.

Starbucks has more than one machine in each store and each
employee is trained to service the machine to ensure that its working,
which makes them more reliable as well.
To maintain each machine, employees clean them every night and
have proper training to use them correctly.
On occasions when a machine needs to be fixed, everything gets back
to normal within a period of three days.
3. Process and capacity design
The companys processes are highly efficient, as observable in its
cafs.
Starbucks optimizes capacity and capacity utilization by designing
processes to meet fluctuations in demand.
For example, processes at the firms cafs are flexible to adjust
personnel to a sudden increase in demand during peak hours.
Starbucks aims to maximize cost-effectiveness though efficiency of

workflows and processes.

4. Location strategy
Starbucks location strategy focuses on urban centers, especially those
with large middle and upper class populations.
Most of its cafs are in densely populated areas.
Starbucks occasionally uses strategic clustering of cafs in the same
geographic area to gain market share and drive competitors away.
5. Layout design and strategy
The layout design of Starbucks cafs maximizes workflow efficiency.
It also supports a warm and friendly ambiance to match the

companys organizational culture. They have efficient and well


planned store entrances and place their main promotion menus at the
end caps.
Interior Space they have compressed furniture and passable areas to
fully utilize the scarce space. Starbucks prioritizes customer
experience over space utilization. This layout strategy does not
maximize space utilization for tables and seats because Starbucks
focus is on premium customer experience.
Interior Design Starbucks places artwork around the coffeehouse
wall to bring pleasant feeling to their patron to make people feel at
home
Lightening effect Access to natural and artificial lighting
Furniture Round wooden seats and cozy sofas

6. Job design and Human resources


The organizational culture involves the employees-first attitude that
cares for Starbucks workers.
Company uses work teams of baristas.
In other parts of the organization, Starbucks uses functional positions,
such as HRM positions and inventory management positions, with
less emphasis on work teams.
Coffee Master course

o A barista cannot wear a black apron unless he or she has earned


it. There is a whole process involved in becoming certified to
wear one.
o Coffee passport includes information for every core and
regularly-appearing seasonal coffee or Reserve coffee offerings.
o The partner should be able to do a coffee tasting for his or her
district manager and store manager, comparing at least two
coffees. The partner should be able to easily answer questions
related to tastes, acidity body and flavor, Starbucks ethicalsourcing guidelines etc.
7. Supply chain management
8. Inventory management
The company aims to minimize stock out and ensure continuous
supply of coffee beans to its cafs.
Techniques to manage inventory
o Just-in-time (JIT)
o Material Requirements Planning (MRP)
It is a production planning, scheduling, and inventory
control system used to manage manufacturing processes.
Most MRP systems are software-based, while it is
possible to conduct MRP by hand as well.
9. Scheduling
Starbucks uses automated and manual scheduling approaches for its
various business activities.
The company also applies flexible schedules for management
personnel.

This decision area of operations management relates with Starbucks in


terms of the firms objective of streamlining processes, while allowing
some degree of flexibility among management positions in the
organization.
10.Maintenance
Starbucks maintains its physical assets through dedicated teams of
employees trained for maintaining facilities and equipment, as well as
third parties that offer maintenance services.
These third parties include local businesses that provide equipment
tune-ups for Starbucks cafs.
Company maintains its human resource capacity through training and

retention strategies that include relatively high compensation.


Thus, Starbucks addresses this decision area of operations
management through the involvement of caf personnel, dedicated
maintenance teams, and third-party service providers.