Emerging Challenges
Starbucks is one of the most successful coffee company in the world with over 23,000 branches worldwide. But even a global famous coffee chain faces different challenges mainly about navigating its way on the complicated economic lane of America, not to mention new competitions who are offering almost the same quality and demands a lesser quantity. There are several Key Performance Indicator (KPI) needed to measure the effectiveness of the marketing strategies of Starbucks to developed its services.
Incremental Sales and Goal Completion Rate
First and foremost, Starbucks needs more effective marketing campaigns to appeal to customers worldwide. According to Gospe (2008) and Dietrich and Livingston (2012), campaigns are an essential part in attracting new customers, campaigns needs to be distributed effectively and direct. This KPI is called Incremental Sales, wherein the corporation monitors the effectiveness of their campaigns. Right now, Starbucks needs to focus on producing more campaigns online or in the social media. This type of strategy is another KPI called Goal Completion Rate, wherein the monitoring focuses on the development of campaigns online. This strategic KPIs aims to generate more customers and gain loyal customers.
Product Performance and Sales Target
Starbucks is known for their amazing menu of coffee, frappe, and desserts. The corporation should keep track on what item on their menu is the most purchased by the customers or maybe they can distribute a survey questionnaire to the customers asking which of their items the customer’s favorite is. Starbucks can then create a promo or maybe a discount for that certain item on their menu and surely, customers are going to be coming and going out of each branch.
After the initial step which is Product Performance, move on the Sales Target and keep a record of sales performance from the past to make better decisions in the future. For example, Starbucks noticed a decline on their sales after adding a new item on their menu which didn’t appeal much to the customers. Starbucks needs to recognize all of their mistakes and miscalculations to avoid further errors in the future. It is like saying that company needs to compete with its past performance for its future performance to succeed, La Forme, Genoulaz, and Campagne (2007) and Cai, Liu, Xiao, and Liu (2009) supported that competitiveness within the corporation and within the industry is a good motivational tool for development. Prior to this statement about competition, Elgazzar, Tipi, Hubbard, and Leach (2012) explained that innovation and new strategies is necessary in order to survive, because even a successful corporation like Starbucks can be left to dust by other competitors if it remains passive and idle when it comes to improvement in the industry.
Working Capital
This tactical KPI is important and is considered a back-up plan to cover up whatever shortcomings within the financial sector. Working capital analyzes the financial situation of a corporation by preparing all available resources to be used to get rid of liabilities needed to be taken care of or paid. For example, a certain Starbucks branch forgot to pay a previous purchase order and wasn’t able to keep any available money for payment. Where will the money come from? This are vital problems that needs to be avoided at all cost.
These KPIs should be conducted analytically and there should be skilled individuals to lead each plan of action. The main challenges is the unstable economy of America and strong competitions, these KPIs can be utilized to increase the generated revenue and stay ahead of the other competitors by providing great quality accompanied with a reasonable quantity.
Another important thing to always guarantee is to always provide great service and great products throughout all the branches of Starbucks. There have been news about Starbucks branches closing because of weak generation of revenue.
All of these KPIs are necessary and even a little more is advisable, Starbucks might cater to new KPIs focusing on factors like branch locations, suppliers credibility, employment booster, franchising, and more. Starbucks is in a strong ground right now with their business growing worldwide, but the company needs innovation to keep up with the relentless changes in business and the way the process works. But, all in all, Starbucks reputation is timeless and its downfall is almost near to impossible.
References
Cai, J., Liu, X., Xiao, Z., & Liu, J., 2009. Improving supply chain performance management: A systematic approach to analyzing iterative KPI accomplishment. Decision Support Systems, 46, pp. 512-521.
Dietrich, G., and Livingston, G., 2012. Marketing in the round: How to develop an integrated marketing campaign in the digital era. Indinapolis: Que Publishing
Elgazzar, S., Tipi, N., Hubbard, N., & Leach, D., 2012. Linking supply chain processes’ to a company’s financial strategic objectives. European Journal of Operational Research, 223 (), pp. 276-289.
La Forme, F. A. G., Genoulaz, V. B., &Campagne, J. P., 2007. A framework to analyse collaborative performance. Computers in Industry, 58, pp. 687-697.
Gospe, M., 2008. Marketing campaign development: What marketing executives need to know about architecting global integrated marketing campaigns. Silicon Valley: Happy About.
