THE BALANCED SCORECARD I Starbucks Inc.

Efe Abighe - Yasin Gonenc - Panagiotis Panas - Chenyang Shao - Ding Wang
1 INTRODUCTION
Starbucks Inc.

 Background
- Premier roaster, marketer and retailer of specialty coffee
- Founded in Seattle, Washington in 1971
- 23,768 retail stores in 68 countries

 Mission
- To inspire and nurture the human spirit – one person, one cup and
one neighbourhood at a time

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2 BSC l HIERARCHY
Starbucks Inc.

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3 BSC l IMPLEMENTATION OF BSC
Starbucks Inc.

 People do not know, what they do not know.

- Methods of order and meetings guide people to continuously question
our strategy, keep our core values in their mind, and in the end
employees figure out what they don’t know

Executive Meetings Operational

6 & 2 Month Meetings
Frequency Weekly Frequency

Informal Meetings
Potlucks and Happy
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4 BSC l OBJECTIVE OF BSC
Starbucks Inc.

 We believe in constant development and flexibility.

 BSC, to be able to deliver our strategy to the lowest level of our
organization
- Balanced way. Through Classification
- Ordered of Assessment
 Integrating people and give them chance to act.

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5 BSC l STARBUCKS Inc.
Strategic Imperatives
Financial
Perspective

Innovation, Corporate Strategic Imperatives

Learning & Penetrate Global Markets Internal
Growth Leveraging Brand Business
Perspective Social Gathering Place Perspective
Environmental Leader
Invest in our People

Customer
Perspective
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6 BSC l INNOVATION, LEARNING AND GROWTH PERSPECTIVE
Can we continue to Improve and Create Value?

 Innovation
Objectives Measures
Social Digital Growth (Mobile Order and • Number of Mobile Application Users
Pay, My Starbucks Reward Loyalty • Number of Orders placed using the
Program) Mobile App
• Number of Sign ups on the Loyalty
Program
• Rate of Increase in Revenue from
mobile orders
• Total contribution of Mobile orders to
revenue

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6 BSC l INNOVATION, LEARNING AND GROWTH PERSPECTIVE
Can we continue to Improve and Create Value?

 Innovation
Objectives Measures
Store Design experimentation (Express Stores • Number of New designed stores launched
and Drive thrus) • Number of customer visits to new stores
• Processing time of customer orders at new
designed stores
Retail Tea Ambitions- (Teavana Brand Tea, • Increase in Number of Teavana Stores in tea
Oprah Chi Tea) drinking countries in the Asia Pacific- India,
China

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6 BSC l INNOVATION, LEARNING AND GROWTH PERSPECTIVE
Can we continue to Improve and Create Value?
 Improving Operating Efficiencies
Objectives
Employee (Partner) Satisfaction
Empower employees (College
Achievement Plan)
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Measures
• Rate of employee turnover
• Length of employee tenure
• Rate of employee absenteeism
• Number of training sessions completed
• Number of employees completing their
Undergrad degree while in Starbucks
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7 BSC l INTERNAL BUSINESS PERSPECTIVE
What must we excel at?

 Consumer satisfaction
Objectives Measures
Improve product quality • Coffee beans quality

Improve service quality • Numbers of employees’ training

session
• Percentage of trained staff

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7 BSC l INTERNAL BUSINESS PERSPECTIVE
What must we excel at?

 Consumer base
Objectives Measures
Product diversification • Number of new products
• Number of Starbucks Reserve Roastery &
Tasting Room

Geography diversification • Number of new stores in key emerging

markets

Strategic alliance and acquisitions • Percent of revenue from acquisition

• Success rate of acquisition

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7 BSC l INTERNAL BUSINESS PERSPECTIVE
What must we excel at?
 Resource utilisation
Objectives
Increase employee productivity
Improve asset utilisation
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Measures
• Net revenue per labour hour per
employee
• Number of coffee processed per hour
• Average using life of machines
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8 BSC l CUSTOMER PERSPECTIVE
How do Customers see us?

 Markets
Objectives Measures
Increase customer’s loyalty • Regular customer
• Percentage of loyal member

Expand into new market • New type of selling/market

Increase Market share • Percentage of market share

• New stores
• Promotion to new customers

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8 BSC l CUSTOMER PERSPECTIVE
How do Customers see us?
 Customer Satisfaction
Objectives
Pre-purchase & Service satisfaction
Post-purchase & Product satisfaction
Environmental effort
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Measures
• Time spent in the waiting line
• Explanation for the products
• Number of complaints per year
• Tailored product, customization
• Sales of new product
• Number of returned drinks
• Clean, safe stores
• Tables, Wi-Fi connection
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9 BSC l FINANCIAL PERSPECTIVE
How do we look to Shareholders?

 Growth
Objectives Measures
Increase in Sales • YoY % Increase in Sales

Increase in Market Share • % Increase in Market Share

• New Stores
• New Products
Profitability • EPS
• ROE

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9 BSC l FINANCIAL PERSPECTIVE
How do we look to Shareholders?

 Cost Reduction
Objectives Measures
Administration Costs • YoY % Reduction

Cost per Unit/Services • % reduction in cost per unit

 Asset Utilisation
Objectives Measures
Improve Asset Utilisation • ROI/AT

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10 ACTING STAGE OF MIDDLE MANAGERS

Penetrate Global Social Gathering Invest In Our Environmental

Leveraging Brand
Markets – $ Place People Leader

Financial
Net $ Growth Asset Utilization Cost Eff.

Customer Customer Increase Consumer Customer Environmental

Loyalty Base Satisfaction Effect

Internal Product Geography Improve Product Resource

Diversification Diversification &Service Quality Utilization

Learning Social Digital Store Design Employee Empower

Growth Experimentation Satisfaction Employees
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11 BALANCED SCORECARD l STARBUCKS Inc.
FINANCIAL PERSPECTIVE
• Net Revenue Growth
• Cost Reduction
• Asset Utilisation

INNOVATION, LEARNING &
GROWTH
PERSPECTIVE
• Employee Satisfaction
• Store Design Experimentation
• • Improve Product & Service
•
Mobile App Growth
Retail Tea Ambition
• Empower Employees
CORPORATE STRATEGIC
IMPERATIVES
Penetrate Global Markets
Leveraging Brand
Social Gathering Place
Environmental Leader
INTERNAL BUSINESS
PERSPECTIVE
• Product Diversification
• Geography Diversification
Quality
• Resource Utilisation

Invest in our People

CUSTOMER PERSPECTIVE
• Customer loyalty
• Increase Consumer Base
• Customer Satisfaction
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