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Matthew Seibert

Fay Saechao
Jehrica Marini

Mission Statement
Background
Starbucks original vision in 1987
The evolution of Starbucks from
1991-2008
Worldwide expansion from 20002001
Transformation of Starbucks with
return of Schultz 2008-2012
Financial Statements
Evolution of Strategic Vision
Broad Differentiation
Teavana
Video: Howard Schultz on Teavana

Employee Training
Starbucks Culture
Community Service
Ethical Sourcing
Purchasing Coffee Beans
Quality Control
Lean
2012 Issues Facing Management
Conclusion

To inspire and nurture the human spirit one


person, one cup and one neighborhood at a
time

First coffee shop in 1971 in Seattle


Schultz hired in 1982
Schultz idea of a coffee house came about when he
was sent to Milan by Baldwin in 1983
Schultz leaves Starbucks and opened his own coffee
shop, Il Giornale in 1985

Vision for Starbucks become a national


company with values and guiding principles
that employees could be proud of
Schultz wanted Starbucks to be a respected
coffee house and to be admired for their
corporate responsibility
Schultz planned on having 125 new stores open
in the next five years increments of five
stores, starting with 15 stores for the first year
Merged Starbucks and Il Giornale and made a
new logo, look for Starbucks and added
espresso machines

Entered California: Los Angeles, then


S.F.
Exceeded opening 125 stores, opened
161 by year 1992
Part-Time employee (20hours+) receive
health benefits
Employees became partners
Starbucks initial public offering in first
year was most successful of IPO of the
year
Product line grew, joint ventures
happened, licensed stores in areas from
airlines, hotels, airports, etc.

Earlier expansion
consisted of 12
managers, today is 180
mangers with three other
regional offices
Licensing agreement
with Trans Fair
Tokyo- fist non-North
American store
New locations in Asia,
Europe, Australia, and
South America

Implemented innovative and


consumer focused concepts with
mission statement To inspire and
nurture the human spirit-one
person, one cup and one
neighborhood at a time
Consumer community to help
innovate Starbucks experience
such as: paper cups vs reusable
tumbler, ideas on
mystarbucksidea.com, rewards
program, and the like

Lost sales due to the economic recession


Lost sight of their original mission to provide
customers with the Starbucks experience

"I think, at the end of the day, we were never in


the coffee business serving people; we were in
the people business serving coffee," -Howard
Schultz
After stepping down in 2000, Howard Shultz
returns as CEO

As returning CEO, Schultz closed 1,600 stores


in 2008
Shut down all Starbucks store for 3 hours to
retrain all employees
Emphasized their need to renew their emotional
attachment to customers

Shared best practices


among stores
nationwide
Revamped menu
offerings
New and improved
environmentally
friendly programs

Provided more
resources for
employees

Series 1
45.00%

44.00%
43.00%
42.00%
41.00%
40.00%
2007

2008

Supply Chain Efficiencies


Food Costs
Beverage and Packaging Costs
Sales Leverages

2009

2010

2011

Series 1
37.00%
36.00%
35.00%
34.00%
33.00%
32.00%
31.00%
2007

2008

Sales Leverage
Direct Distribution Model
Impairment

2009

2010

2011

Series 1
5.60%
5.40%
5.20%
5.00%
4.80%
4.60%
4.40%
4.20%
2007

2008

2009

2010

2011

Series 1
16.00%
14.00%
12.00%
10.00%

8.00%
6.00%
4.00%

2007

2008

2009

2010

2011

Series 1
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2007

2008

2009

2010

2011

Series 1
35.00%
30.00%

25.00%
20.00%
15.00%
10.00%
2007

2008

2009

2010

2011

Changes of marketing
techniques using
social media
platforms
Facebook
Twitter

Differentiating features
that cause buyers to
prefer product/service
over brand rivals such
as Peets Coffee
Quality beans that can
be served at premium
price
Product line
Products in retail stores
Amazing customer
service with happy
customers

Specialty tea store owned by Starbucks


300 Teavana locations throughout the US,
Canada and Mexico
Goal: To provide fresh, high quality teas and
the products to serve them. And to create a
unique tea experience in each store by
encouraging a positive, healthy outlook for all
who enter

Starbucks vice president for human resources


is on a mission for passionate people who
love coffee
Starbucks employees are thoroughly
equipped and trained to maintain the core
values
Management trainees are required to attend
classes that last for an eight to twelve week
period to ensure they understand the
Starbucks mission centered on community

Each partner or barista is provided with at


least twenty-four hours of training in the first
two to four weeks of their hiring
The classes that they receive include: coffee
history, drink preparation, coffee knowledge,
customer service and retail skills
They also participate in a workshop titled,
Brewing the Perfect Cup

Core value

To build a company with soul

Human connection

Focus on diversity

Encouraging atmosphere

Employees are called partners

Goal of 1 million community service


hours by 2015
Starbucks foundation- 1997 by funding
literacy programs in the United States and
Canada
The Starbucks Foundation supports their
employees engagement in their local
community through Partner Match and
Community Service Grants

To ensure ethical sourcing of their coffee


beans, Starbucks put a program into action
called Coffee and Farmer Equity (C.A.F.E.)
A comprehensive coffee-buying program which
guarantees coffee quality and the promoting of
social, economic and environmental standards

Starbucks goal regarding the purchase of


coffee is to ensure that one hundred percent
is ethically sourced by the year 2015

Starbucks invented FlavorLock technology


Beans are sealed FlavorLock bags within two
hours of roasting

Baristas now grind the beans every time a


new pot was brewed
Set timers to signal once it was time to brew
a new pot

Starbucks decided to use lean to improve


their daily operations
Led by Scott Heydon, the Vice President of
Lean Thinking
Reduce waste and free up time for its
baristas.
Allow baristas to interact with more
customers and make more beverages in the
same amount of time while needing fewer
workers

Strong results for fiscal year 2011

Increased commodity costs

Strong competitors

Rollouts of new point-of-sale and inventory


management system

International market expansion

Reorganization of leadership structure

Strengthen the Starbucks experience

Continue its quest to ethically source all of


their coffee by 2015

Continue to take strategic action regarding


the tea industry

Further differentiate themselves


from their competition