Business is like Coffee 2

I believe that every business in every industry can learn something from Starbucks. Perhaps the biggest lesson is that it is possible to reinvent a product that has been around for years.

Coffee products were capital intensive, highly competitive, mature, and dominated by brands both local and global, yet Starbucks distinguished itself from the competition in four ways.

First, the company provides excellent customer service by employees who want to be there. They want to be part of a proud, dynamic and growing organization. The people working at the company understand that they are the key to success, and they act accordingly. The company treats its employees well, offering outstanding working conditions and benefits for part time employees.

This competitive advantage enables the company to be selective when hiring. Can the same be said of Starbucks’ competitors?

Second, the company has established a quality product line. While some people don’t care for the taste or flavor of Starbucks coffee, the company has gone out of its way to develop a selection of products that appeal to a broad base of consumers. There are a variety of products available for each time of day, and they are based on the preferences of each local market.

Third, the company has established a physical environment conducive for business. Each contemporary Starbucks unit is located in an area with good parking and access.

At Starbucks, you don’t simply enter a physical place, but rather the appeal is based on the entire experience. It is almost as if Starbucks is saying “Welcome to our special place, relax and enjoy yourself. Stay as long as you like. Our place is your place. Thanks for spending time with us.”

Fourth, each unit is company owned and not franchised. This keeps high quality control levels. This also provides the company with tools to expand the experience beyond the physical venue of the store setting; you can get Starbucks coffee at the office, the grocery store, on airlines and so forth.

Some franchise operations, by comparison, limit the physical distribution which is why you don’t see Baskin Robbins ice cream in a grocery store. Starbucks learned that the experience of the product should not be limited, but it should be controlled.

Ken Keller, 661.295.6892
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