Case Study : Starbucks Isn’t Unique, or Shouldn’t Be

Starbucks Isn’t Unique, or Shouldn’t be

Carl De Lucia

Whenever I read an article on Starbucks (which is actually quite often), it usually goes like this : Starbucks offers a unique experience: high-end specialty coffee and beverages, friendly and knowledgeable servers and a customer-friendly coffee shop environment.

Well my question is, how is this unique? You mean to say that nobody else who runs a coffee shop has thought of those three super basic principles? You have to be kidding me.

Let’s do an analyses here :

A) High-End Specialty Coffee – Starbucks coffee is good, but is it really much better than Dunkin’ Donuts, or the coffee at any other coffee shop in your area? I sincerely doubt that it is substantially better. For example: Starbucks highly touted pumpkin spice latte doesn’t have pumpkin listed as an ingredient. Real “high-end”.

B) Friendly and Knowledgeable Servers – This seems pretty basic. I can’t see an operator of a coffee shop, or any business that deals with customers face-to-face not emphasizing friendly and helpful customer service. On top of that, I don’t notice anything special about the service at Starbucks. When I ask for a medium coffee, I get a “do you mean venti?”. Yes, very special customer service.

C) Customer-Friendly Environment – Have you ever gone to a coffee shop that doesn’t have a customer-friendly environment? How is Starbucks any different? There are Starbucks in malls that have five plastic tables and wrappers on the floor. A customer-friendly experience is unique for a coffee shop ? Absolutely not.

Starbucks stock lost 50% of its value in 2008. “Maybe there’s hope”, I thought. Everybody’s complaining about the price of gas ($4 a gallon), but has no problem with a $4 medium coffee? (I feel like I’m taking crazy pills!)

So, since Howard Schultz is SUCH a genius, here’s how Starbucks bounced back!

An aggressive product differentiation strategy. Starbucks emphasized the quality of their product and the customer service. Seriously ? Quality of the product ? Ok, that’s pretty basic. Again, there isn’t a huge difference between Starbucks coffee and that of its competitors, there really isn’t. That’s my opinion yes, but it’s based on fact, you can read the ingredients online. Maybe put some pumpkin in the pumpkin latte.
Customer service? How difficult is it to order a coffee? (Not very.)

This is actually nonsense. That’s not what Starbucks really did. Starbucks used smoke and mirrors to seem hip again and here’s how. A) a mobile app so customers can buy coffee from their iPhones. B) free wi-fi on the Starbucks Digital Network. Basically, this is free internet access on your smartphone and tablet while you’re at Starbucks. So how is this different than any other coffee shop again?

Starbucks was going down, so they CUT COSTS and improved profitability so they could look better to investors and gain approval to open more locations. That’s the name of the game at this level.

Starbucks is a very good business and I admire them. But they aren’t reinventing the wheel. The coffee isn’t substantially better than anybody else’s and neither is the customer service.

If you can think of a way that Starbucks is unique, I’d like to hear it. Please comment.

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