8.2 Study the Harvard Business School Case “Starbucks: Delivering Customer Service,” Case # 9-504-016 (Rev. July 10, 2006), and answer the following questions. The case materials may be purchased by contacting its publisher at www.custserve@hbsp.harvard.edu or at 1-800-545-7685.

A. What is this case about? What type of company is Starbucks in the first place (selling coffee, selling service, selling ... )? B. What factors accounted for the extraordinary success of Starbucks in the early 1990s? What are so compelling about the Starbucks’ value proposition? What brand image did Starbucks develop during this period? C. Why had its customer satisfaction scores declined when measured in 2002? Had the company’s service declined, or is it simply measuring satisfaction the wrong way? How does the Starbucks of 2002 differ from the Starbucks of 1992? D. Describe the ideal Starbucks customer from a profitability standpoint. What would it take to ensure that this customer is highly satisfied? How valuable is a highly satisfied customer to Starbucks? E. Should Starbucks make the $40 million investment in labor in the stores? What’s the goal of this investment? Is it possible for a mega-brand to deliver customer intimacy? F. When using the $40 million to add more store labor, what kind of labor is most useful to achieve the specific objective at hand? Should the $40 million be invested only for adding more labor? What might be some of these non-labor upgrades Starbucks should pursue? G. What are the lessons you have learned from having studied this case?