Starbucks Coffee Company Executive Business Plan

Starbucks Coffee Company Executive Business Plan

Daniel Boose

MGT 591 Seminar in Management

John Fritch

July 10, 2006

Executive Summary

The following executive summary will identify two projects that are being recommended to Starbucks Coffee Company for implementation immediately. The summary will identify the two projects, state why the projects are being recommended, and provide an overview of the expected results. Following that will be a business plan summarizing the findings and recommendations for the two projects. The two projects that are being recommended to Starbucks are the Real-Time Snapshot Project and the Partner Compensation Access Project.

The first project is the Real-Time Snapshot Project. This project would enhance Starbuck's website to include a section where customers can give a real world snapshot of the experience that they have had in the retail stores after visiting them. This would allow the consumer to rank their visit, provide feedback, and be entered into a contest to win a $500 Starbucks gift card, which would be awarded weekly.

Starbucks currently uses a secret snapshot program that costs them an average of $45 per shop and there are three snapshots completed per quarter for each store. This equates to $180 a year per store. With about 5000 retail North America Stores, this equates to about $900,000 a year. The new program would cost the initial investment of the startup cost for the new web page, the cost to collect the data and Starbuck's cost for the $500 gift cards. All of this would equate to about $400,000 a year. That is a half of a million-dollar savings annually for Starbucks Coffee Company and would result in much more realistic data for the managers to be held accountable to.

The feedback provided by the customers by having them do customer snapshots on the web could provide some extremely valuable information to both the field operators of the company as well as to the marketing department. This would also create a database for marketing to send out information on future promotions and events for the company, to their customers.

The Real-Time Snapshot Project should result in an overall increase in the speed of service for the company, better service for consumers within six months, a sales increase of 6% company wide, decrease in employee turnover by 15% in the first year, 65% of management fitting bonus goals, and a 175% return on investment within the first year.

The second project is the Partner Compensation Access Project. This project would enhance Starbuck's website on the manager workstation so that employees can access their human resource information. This would include the ability to view, modify, and edit employee information, 401(k) benefits, and payroll information from the store. Starbucks needs to incorporate many of these enhancements to their manager workstation to allow its employees the ability to fully understand what the benefits of the company are. This enhancement will also allow employees to make immediate changes to their personal information and deductions, which would make their withholdings much more accurate.

The Partner Compensation Access Project would ensure more accurate human resource records, tax information, and financial information for the employees of Starbucks. Employees would have access to their records on a day-to-day basis and be able to update information at their convenience. The project would also mean that the investment company Starbucks uses would be able to access up to the date 401(k) information for all employees. They would also be able to provide employees with financial advice. The federal government would also have access to the updated information for all Starbuck's employees resulting in more accurate tax information.

The Partner Compensation Access Project should result in a 25% increase in the number of employees who start a 401(k) plan, a retention rate for employees of 35% higher than prior year, 85% of current employees using the new system within six months, and a 85% return on investment within the first year of the project.

Business Requirements Analysis

There are two different projects that are being recommended to Starbucks Coffee Company, a Real-Time Snapshot Project and a Partner Compensation Access Project.

The first project is being recommended because, "People at corporate headquarters need to get clear, unbiased information about the conditions at a far flung store. They can't just pick up the phone and call store 1400 and ask Ð''How are things there?"( Green, 2006)

Many employees feel that the shoppers are only as reliable as the experience that they have and how much the shopper likes their job. The feeling is also that many mystery shoppers are performing a job and are not really customers. The problem with the secret shopper program is the mystery shoppers may feel or see things that a typical consumer may not see or be aware of.

At Starbucks Coffee Company, the mystery shopper scores are tied into the manager's bonus structure. This fact has made managers request that actual customers instead of an external firm hired to evaluate the stores do the shops. This project would also reduce the expense that Starbucks incurs every year from the Secret Snapshot Program. Starbucks pays an average of $45 per shop and does three snapshots per quarter for each store. This equates to $180 a year per store. With about 5000 retail North America Stores, this equates to about $900,000 a year. The new program would cost us the initial investment of the startup cost for the new web page, the cost to collect the data and Starbuck's cost for the $500 gift cards. All of this would equate to $400,000 a year. That is a half a million-dollar savings annually for Starbucks Coffee Company and much more realistic data for the managers to be held accountable for.

The feedback provided by the customers by having them do customer snapshots on the web could provide some extremely valuable information to both the field operators of the company as well as to the marketing department. This would also create a database for marketing to send out information on future promotions and events at the company to their customers.

The following is the Real-Time Snapshot Use Case

{Starbucks System Analysis Use Case}

Author (s): __Daniel Boose_______ Date:___7/10/06_______

Version:___1_______