Starbucks Corporation

Presented by :
Ashok Lahoty
Sec: D
 Presentation Outline
Introduction of Starbucks
The company background
Market competition
The Growth segment
Starbucks Experience
Bean stock plan
Leveraging the brand
Expansion into ASIAN Countries
Entry into JAPAN
Introduction to Starbucks
Company started in 1971 in seattle, Washington

Grew from 55 stores in 1989 to over 2200 stores

today

Products sold include:

 Beverages - Pastries
 Whole coffee - Coffee-related retail items
 beans
The Company Background
In 1971 three Seattle entrepreneurs—Jerry Baldwin, Zev Siegl, and
Gordon Bowker—started selling whole-bean coffee in Seattle's
Pike Place Market.

In 1982 Howard Schultz has joined Starbucks as manager of retail

sales and marketing.

For a history of the coffeehouse, There are 200,000 coffee bars in

Italy, and about 1500 in Milan alone.

In 1989 to 1990 company lost $1.2 million as overhead expansion.

In 1996 company employs 16600 individuals,include 15000 in retail

and regional ofices.
in 1991, net revenues increased at a compounded annual growth
rate of 61 percent as $696 million.
Market Competition
Germany and Japan are best coffee consumer.

Starbucks has started explore the strategy in asian

countries.

In 1962 on an average consumption 3.1 coffee per

day.

Which was in 1980 bottoming out at an average

consumption of 1.8 cups per day.
The Growth Segment
SCCA predicts in 1999 that coffee will capture about 30% of
the market of retail sales of $5 Billion.

The numbers of Bars Grow 10000 up in 1999 from 4500 in

1994 and 1000 in 1989.

Retail sales volume Grew from 1969 as $45 million to $ 2.0

Billion in 1969.

There are app. 35 million coffee drinkers in US only.

Some analysts attribute the explosive growth in specialty

coffees to the poor economy.
growth: Year 1992 1993 1994 1995 1996 1997

Total stores 165 272 425 676 1006 1381

Total stores 65% 56% 59% 49% 37%

change

Revenue 103K 176K 284K 465K 696K 966K

Revenue change 71% 61% 64% 50% 39%

Starbucks Experiance
According to Schultz, "We're not just selling a cup of
coffee, we are providing an experience.“
people who prepare the coffee are referred to as
"baristas,“ now they referred to starbucks.
The stores range from 200 to 4,000 square feet,with
new units tending to range from 1,500 to 1,700 square
feet.
In 1995, the average cost of opening a new unit was
about $377,000. The firm employs a staff of over 100
people for plan, design and build the unique interiors.
The company manage customer service has seven hrs
daily.
Company also provide their employee to health care
service around $150 per month.
Bean stock plan
Employee turnover is also discouraged by Starbucks' stock
option plan known as the Bean Stock Plan.

It is implemented in angust 1991 by starbucks to offer stock

option unilaterally to all employees.

This plan gettting an exemption from the security

commission.

In 1995 company demonstrated employee welfare so human

group of coffee pickers can receive less than $3 a day.
Starbucks became the first agricultural commodity
importer to implement a code for minimal working
conditions and pay for foreign subcontractors.
Leveraging the Brand
Besides coffee bars starbucks has set up cafes and
carts in hospitals, banks, office buildings,
supermarkets and shopping centers.
In 1992 company deal with nordstrom to serve
coffee in all stores.It operate 62 restaurants and 48
espresso bars.
In 1995 company also sign another deal with UA to
provide coffee to 75 million passengers in a year.
They also launched a line of packaged teas in
response to growing demand of tea.
An agreement with pepsico brought bottle
version of starbucks coffee.
Expansion into asian countries
After getting growth policy in the
international expansion as 307 stores in
1996 and 2000 in 2000, in new markets
in North America including Phoenix,
Arizona, and Miami, Florida.company
plan invested in asian market compare
of Europe.
Company invested $1.5 million for
international subsdiary of 12 managers
developing various attribute.
Entry into JAPAN
In October 1995, Starbucks entered into a joint
venture with a Tokyo-based Sazaby .
Japan is world’s 3rd largest coffee consumer having
115143 coffee shops.
Pronto Corp., is Japan’s second largest coffee-bar
chain opened in 1987 .
Company opened 12 stores in japan in end of 1997
as 250 million yen in capitalization in equally
shares.
With sazaby assistance firm opened 2 stores in
Tokyo for japanese customer attraction which
offer beverages snacks etc.
Conclusion/Questions: