0
A Story of Growth
Case Study Presentation by: 
Brandon J. Murray

1	
  
Starbucks Mission
THEN

NOW

“establish Starbucks as

“to inspire and nurture

the premier purveyor of the
finest coffee i...
Case Study Presentation by: 
Brandon J. Murray

3	
  
U.S. Coffee Consumption in a major slump!

Starbucks Founded
Howard Schultz 
acquires Starbucks

Case Study Presentation b...
The Rise of the
Coffeehouses
!   In San Francisco & New York, small specialty
coffeehouses and roasters were being establi...
We should sell

prepared
coffee drinks
like the Italians
are doing!!

Case Study Presentation by: 
Brandon J. Murray

6	
 ...
We love roasting
and selling beans
...not interested in
selling prepared
drinks.

Mr. Schultz leaves Starbucks!

Case Stud...
Mr. Schultz buys Starbucks!
Now I think I
WILL make & sell
those prepared
coffee drinks!!

Case Study Presentation by: 
Br...
Starbucks	 Expansion
!   In 1996, Starbucks began executing two
initiatives:
!   Selling Starbucks products through mass
d...
Mass Distribution Channels
“ to accelerate
growth of the
Starbucks brand
into the grocery
channel across
the United States...
Licensing Agreements!
By 2008, 16% of
of Starbucks
revenues came
from sources
other than its
company-owned
retail stores.
...
Starbucks Retail Expansion
1996	
  

	
  

1,015	
  Stores	
  

	
  

2001

4,709	
  Stores	
  

2007	
  

15,011	
  Store...
Competitor Latte Prices

v

.

Starbucks

Case Study Presentation by: 
Brandon J. Murray

13	
  
I’m back….

Schultz
Returns
as CEO

Case Study Presentation by: 
Brandon J. Murray

now check out my
transformational
agen...
Store Closed for…
•  Mr. Schultz closes nearly 1,000
underperforming stores
•  Mr. Schultz closes Starbucks stores
nationw...
Business
Process
Improvement
!   Starbucks makes operational changes
to their brewing stations and coffee
bean “default ro...
Starbucks gets back to its roots…

!  “ round,
smooth, and
balanced…a
mild, sweet
finish. ”
- Howard Schultz, describing hi...
Case Study Presentation by: 
Brandon J. Murray

18	
  
Moving business

“away from the store”
!   Starbucks produces an instant coffee
!   Starbucks produces a single-serve pod ...
Starbucks pursues coffee initiatives
outside of their own brand

!  Seattle's Best Coffee
!  15th Avenue Coffee and Tea
!  ...
Manufacturing	 Brewing	 Equipment
•  What is a Clover coffee machine?

!   An $11,000 USD coffee machine which makes a sup...
My “Starbucks Experience”
•  Starbucks, with CEO Howard Schultz at
the helm, has been an inspiration for
regular coffee co...
QUESTIONS?
THANK YOU…
1) For your time, 2) For this opportunity
to analyze a fascinating business case,
and of course 3) F...
[ Backup Slide ]

Case Study Presentation by: 
Brandon J. Murray

24	
  
Company	
  Timeline:	
  	
  
Howard	
  Schultz	
  &	
  Starbucks	
  
!   1981: Howard Schultz visits the company that's bu...
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Starbucks: A Story of Growth - case study presentation for EBS/DBS

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For entry into the EBS European Business School / DBS Durham University Business School - dual Executive MBA programme, I was asked to analyze a case study from Kellogg School of Management at Northwestern University. I then had to write a handful of essays and give a 1-hour presentation consisting of 30 min of briefing and 30 min of Q/A from the EBS faculty audience.

Starbucks Corporation is known world-wide for their specialty coffee innovation and creative business design. Over time Starbucks has built a business around a relaxing, somewhat romantic atmosphere that brings to the customer a European feel and thus provides a strong user experience for its customers. In Starbucks’ earliest days, coffee consumption in the United States (US) was considered nothing special. Most US coffee offered a similar taste and wasn’t offered in a special “European” environment. With this absence of uniqueness, convenience was the dominant criteria used by US consumers to choose their coffee.

Enter Starbucks.

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Transcript of "Starbucks: A Story of Growth - case study presentation for EBS/DBS"

  1. 1. A Story of Growth Case Study Presentation by: Brandon J. Murray 1  
  2. 2. Starbucks Mission THEN NOW “establish Starbucks as “to inspire and nurture the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow the human spirit – one person, one cup and one neighborhood at a ” ” Case Study Presentation by: Brandon J. Murray time. 2  
  3. 3. Case Study Presentation by: Brandon J. Murray 3  
  4. 4. U.S. Coffee Consumption in a major slump! Starbucks Founded Howard Schultz acquires Starbucks Case Study Presentation by: Brandon J. Murray 4  
  5. 5. The Rise of the Coffeehouses !   In San Francisco & New York, small specialty coffeehouses and roasters were being established !   Starbucks was created in this mold, aiming to roast and sell excellent coffee Case Study Presentation by: Brandon J. Murray 5  
  6. 6. We should sell prepared coffee drinks like the Italians are doing!! Case Study Presentation by: Brandon J. Murray 6  
  7. 7. We love roasting and selling beans ...not interested in selling prepared drinks. Mr. Schultz leaves Starbucks! Case Study Presentation by: Brandon J. Murray 7  
  8. 8. Mr. Schultz buys Starbucks! Now I think I WILL make & sell those prepared coffee drinks!! Case Study Presentation by: Brandon J. Murray 8  
  9. 9. Starbucks Expansion !   In 1996, Starbucks began executing two initiatives: !   Selling Starbucks products through mass distribution channels !   Dramatically expanding its footprint Case Study Presentation by: Brandon J. Murray 9  
  10. 10. Mass Distribution Channels “ to accelerate growth of the Starbucks brand into the grocery channel across the United States.” –Howard Schultz, in response to Kraft agreement Case Study Presentation by: Brandon J. Murray 10  
  11. 11. Licensing Agreements! By 2008, 16% of of Starbucks revenues came from sources other than its company-owned retail stores. Case Study Presentation by: Brandon J. Murray 11  
  12. 12. Starbucks Retail Expansion 1996     1,015  Stores     2001 4,709  Stores   2007   15,011  Stores   Case Study Presentation by: Brandon J. Murray 12  
  13. 13. Competitor Latte Prices v . Starbucks Case Study Presentation by: Brandon J. Murray 13  
  14. 14. I’m back…. Schultz Returns as CEO Case Study Presentation by: Brandon J. Murray now check out my transformational agenda to cut $580 million in 2009 and deliver 90% of store orders on time and without errors. 14  
  15. 15. Store Closed for… •  Mr. Schultz closes nearly 1,000 underperforming stores •  Mr. Schultz closes Starbucks stores nationwide for an afternoon to retrain all baristas Case Study Presentation by: Brandon J. Murray 15  
  16. 16. Business Process Improvement !   Starbucks makes operational changes to their brewing stations and coffee bean “default roast” selections. Case Study Presentation by: Brandon J. Murray 16  
  17. 17. Starbucks gets back to its roots… !  “ round, smooth, and balanced…a mild, sweet finish. ” - Howard Schultz, describing his ‘Consistent Brew 19’ (renamed to Pike Place Roast) Case Study Presentation by: Brandon J. Murray 17  
  18. 18. Case Study Presentation by: Brandon J. Murray 18  
  19. 19. Moving business “away from the store” !   Starbucks produces an instant coffee !   Starbucks produces a single-serve pod coffee !   Starbucks applies VIA technology to sell shelfstable Frappuccino, ice-cream, and even beer “Never be without great coffee” “faster, easier, and doesn’t force the entire household to drink the same thing in the morning.” – Howard Schultz, slogan on VIA – Howard Schultz, on single-serve Pods Case Study Presentation by: Brandon J. Murray 19  
  20. 20. Starbucks pursues coffee initiatives outside of their own brand !  Seattle's Best Coffee !  15th Avenue Coffee and Tea !  Roy Street Coffee and Tea Case Study Presentation by: Brandon J. Murray 20  
  21. 21. Manufacturing Brewing Equipment •  What is a Clover coffee machine? !   An $11,000 USD coffee machine which makes a superior brew by controlling dose, brewing temperature, and brew time. •  What benefits did Mr. Schultz see with the Clover? 1) Produces superior cup of coffee 2) Offered customers “theater & romance” 3) Makes a single cup at a time, allowing to brew from smaller batches of specialty beans “Frankly, we just don’t want anyone else to have it.” -­‐  Michelle  Gass,  SBUX  execu3ve  in  response  to  Clover  acquisi3on   Case Study Presentation by: Brandon J. Murray 21  
  22. 22. My “Starbucks Experience” •  Starbucks, with CEO Howard Schultz at the helm, has been an inspiration for regular coffee consumers like me - - all the way to national and global business leaders alike. •  I have enjoyed this Starbucks Case Study project immensely! Case Study Presentation by: Brandon J. Murray 22  
  23. 23. QUESTIONS? THANK YOU… 1) For your time, 2) For this opportunity to analyze a fascinating business case, and of course 3) For considering me for your graduate programme. Case Study Presentation by: Brandon J. Murray 23  
  24. 24. [ Backup Slide ] Case Study Presentation by: Brandon J. Murray 24  
  25. 25. Company  Timeline:     Howard  Schultz  &  Starbucks   !   1981: Howard Schultz visits the company that's buying so many drip coffeemakers from the Swedish company he represents and falls in love with it. !   1982: He becomes Starbucks' director of retail operations and marketing. !   1983: He travels to Milan !   1985: He founds Il Giornale !   1987: Leads a group of investors to buy Starbucks when it had fewer than 20 stores and plans to open 125 new stores in five years. !   1992: Takes the company public (IPO). Starbucks ends fiscal year with 165 stores. !   1996: Begins selling bottled Frappuccino drinks !   2000: Steps down as CEO, a title that goes to Orin Smith. Schultz remains chairman. Ends fiscal year with 3,501 stores. !   2003: Acquires Seattle’s Best Coffee Company !   2005: Smith retires and is replaced by Jim Donald. Starbucks ends fiscal year with 10,241 stores. !   2008: Schultz reclaims CEO position and Donald leaves the company. More than 15,000 stores worldwide. Starbucks acquires Clover Brewing System. Launches Pike Place Roast. !   2009: Launches Starbucks VIA Ready Brew Coffee !   2011: Launches Starbucks K-Cups portion packs – Green Mountain Coffee Roasters !   2012: Total Stores = 17,651 (as of July 01, 2012) Case Study Presentation by: Brandon J. Murray 25  
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