What explains the Starbucks success story?.
Starbucks success in the the 1990's, was a result of Chairman and CEO Howard Schultz's vision for the company. Schultz's goal was not primarily about the coffee itself; it was about creating an experience around drinking coffee in a Starbucks store. He wanted to create a "third-place" for those whose lives were centered on home and work. In creating this experience, Schultz focused much of his attention and resources on customer satisfaction, which lead to Starbucks' quick success.
There were a few key elements of the Starbuck's value proposition that led to its success; coffee quality, customer service, and atmosphere. In the early 1990's part of Starbucks' strategy was to serve what it felt was the "highest-quality coffee in the world." To do this they controlled the three major parts of the supply-chain; purchasing beans, roasting, and distribution. This enabled the company to keep full control of quality of its products and services. .
The next part of their strategy was to provide the highest standard of customer service. Starbucks partners (the term used to refer to employees), upon being hired, underwent training in the areas of "hard-" and "soft skills." Soft skills are skills that allow partners to connect with the customer, by establishing eye contact, smiling and remembering their names if they were regulars. Starbucks also had a "Just Say Yes" that called for focus to be on satisfying the customer even if it requires going beyond company rules. As Christine Day said, "the last thing we want to do is win the argument and lose the customer." The focus on these hard and soft skills allowed Starbucks to maintain high-quality service while also maintaining a friendly environment. .
The last part of the strategy was the Starbucks atmosphere. As Schultz put it, "people come for coffee, but the ambiance is what makes them want to stay.