Question

1. Analyze the case Starbucks Delivering Customer Service, and justify numerically (present tables or tables) why the general direction must authorize the 40 million dollars requested by Christine Day.

Answer 1

1. Analyze the case Starbucks Delivering Customer Service, and justify numerically (present tables or tables) why the general direction must authorize the 40 million dollars requested by Christine Day.

The possible solution for Starbucks Customer Service enhancement suggested by Christine Day, the VP Administration North America is by putting $40 million each year for relaxing the labor-hour controls in the stores to add an additional 20 hours per store, that will enhance the employee satisfaction yields an increase in employee retention/productivity, which will improve customer satisfaction, and that ultimately will increase loyalty and profitability.
Starbucks failed to meet the customer expectations and delivery satisfaction, hence losing potential customers retentively. Recent surveys revealed that the Starbuck’s perception of what drives customer satisfaction varies from the actual expectations of the customer, which mainly based on the key drivers for customer satisfaction are superior customer service & speed, along with partner friendliness and cleanliness.
To sum up Christine Day’s recommendations in financial terms:
-   Spending $40 million over 4500 stores.
-   Would spread to $8,888 per store per year, or $171 per week.
-   The prevailing hourly employee labor deficit was about $3,240 for a store running about $15,400 per week.
-   This results in a labor cost of 21.04%.
-   To sustain the labor % of net sales, the store would have to run an additional $812 per week. With an average ticket hovering around $4, for the stores requiring an additional 203 transactions per week, or about 800 per month.
-   Now, the difference between the income from a satisfied and highly satisfied customer would be $172 – requiring 8000/172 = 46 customers to Break even in each store (provide 570 customers visit a store each day).