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Beth Wernet   Pam Jue   Meghana Khandekar   Shelly Ni
Q : What brought you to Starbucks,the first time you ever went?
"Weekend morning Starbucks runs withmy dad are one of our most importantfather-daughter traditions."- Kylie, 15 year Starb...
"Weekend morning Starbucks runs withmy dad are one of our most importantfather-daughter traditions."- Kylie, 15 year Starb...
Who goes when?  Super regulars  16-20 x mo.      4%          20%                   customers   revenue                   1...
Whats interesting here?  Super regulars  16-20 x mo.        4%          20%                     customers   revenue       ...
Coffee Trends  "Individuals who start their day in a friendly coffee  circle will never have a totally bad day... [As Star...
Starbucks Trends
StarbucksTrends
Strategy
Strategy
Strategy Bring a friend to Starbucks for 10% discounts on both your drinks. Bring more friends, and everybody enjoys a lar...
How it works      Introducing: Starbucks Coffee Breaks
How it worksIncreased functionality to be built into Starbucks existing mobile appStarbucks Mobile100 million mobile payme...
How it works main app flow             1                   2                    3                 Select nearby       Sele...
How it works main app flow                                                                                      Via Square...
How it works app flow - saved groups                   Friends can be saved   Message all group                   and orga...
How it works app flow - group & store stats      Group Stats                             Store Stats
Estimated Revenue 0 - 12 MONTHS (US) $177M - 422M 5 - 10% increase in annual US customer traffic (225,000 - 450,000 more v...
Estimated Revenue 0 - 12 MONTHS (US)      12 - 36 MONTHS (GLOBAL) $177M - 422M                            $450M - $3B 5 - ...
Estimated Revenue  Facts from Annual Report:  60 million / week  $13.3B / year revenue  75% of revenue comes drinks bought...
Model  Increase discounts by 5% per additional customer, up to 50%  Only discount $3.70 spent on drinks  Calculate average...
Coffee Market in US Americans spend $40 bil on coffee             8 mil Starbucks                35 mil               prem...
Launching the Program  MARCH/APRIL 2013                      MAY 2013 1-2 months before app launch  ●   Introduce the conc...
Launching the Program  MARCH/APRIL 2013                  MAY 2013  ●   Launch Coffee Breaks across all US stores with upda...
Risks & Costs Risks                           Costs  ●   Customers dont use it     $1.03 million in US  ●   A competitor w...
Starbucks Strengths Large & loyal      Mobile Payment            Locations        "Third Space"customer base           lea...
Future MeetUp/Eventbrite                  Meetup and Eventbrite encourage face to face                  interaction but ma...
Future Online Education                 Coursera, Udacity and edX are the leaders of the                 massive open onli...
Future Global Profits    Model:    Total # of groups globally within online education, MeetUp &    Eventbrite    Assume 25...
"if you decide to join [a group], youcan cut your risk of dying over thenext year in half."- Robert Putnam, Bowling Alone
"Coffee is a gift to mankind, coffeeunites, coffee entertains, andcoffee educates."
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  1. 1. Beth Wernet Pam Jue Meghana Khandekar Shelly Ni
  2. 2. Q : What brought you to Starbucks,the first time you ever went?
  3. 3. "Weekend morning Starbucks runs withmy dad are one of our most importantfather-daughter traditions."- Kylie, 15 year Starbucks customer A : Friends or family
  4. 4. "Weekend morning Starbucks runs withmy dad are one of our most importantfather-daughter traditions."- Kylie, 15 year Starbucks customer
  5. 5. Who goes when? Super regulars 16-20 x mo. 4% 20% customers revenue 17% 37% Regulars 8-12 x mo. customers revenue Occasionals 1-4 x month 79% 43% customers revenue
  6. 6. Whats interesting here? Super regulars 16-20 x mo. 4% 20% customers revenue 17% 37% Regulars 8-12 x mo. customers revenue Occasionals 1-4 x month 79% 43% customers revenue
  7. 7. Coffee Trends "Individuals who start their day in a friendly coffee circle will never have a totally bad day... [As Starbucks changes] the flavor of its stores, its belittling the very role that it created for itself, and for its customer. It isnt easy for all of us who used to love our cozy neighborhood Starbucks." - Ray Oldenburg, writer behind 3rd place idea.
  8. 8. Starbucks Trends
  9. 9. StarbucksTrends
  10. 10. Strategy
  11. 11. Strategy
  12. 12. Strategy Bring a friend to Starbucks for 10% discounts on both your drinks. Bring more friends, and everybody enjoys a larger discount, up to 50% off.
  13. 13. How it works Introducing: Starbucks Coffee Breaks
  14. 14. How it worksIncreased functionality to be built into Starbucks existing mobile appStarbucks Mobile100 million mobile payment transactions sinceprogram launch in January 2011 Increased functionality to2 million mobile payment transactions/week add & manage contacts$3 billion loaded onto Starbucks Loyalty Cards(mobile & physical) accounting for25% of all store transactions(Nov 2012) Starbucks Coffee BreaksOctober 2012 launching mobile paymentpartnership with Square, increasing paymentcapabilities
  15. 15. How it works main app flow 1 2 3 Select nearby Select meeting Message multiple friends place friends at once
  16. 16. How it works main app flow Via Square GPS, grouping and discount earned display automatically4 Friends receive invitations and can accept or decline 6 Meet in store for a Coffee Break! The more people you can recruit, the bigger discount you will receive 5 Optional: Originator of the Coffee 1 Friend = 10% off 1 drink Break can allow invitees to add 2 Friends = 15% off additional friends to the group ... 10+ Friends = 50% off
  17. 17. How it works app flow - saved groups Friends can be saved Message all group and organized into members to organize more permanent meet ups in advance, or grouping anyone whos nearby for an impromptu coffee break
  18. 18. How it works app flow - group & store stats Group Stats Store Stats
  19. 19. Estimated Revenue 0 - 12 MONTHS (US) $177M - 422M 5 - 10% increase in annual US customer traffic (225,000 - 450,000 more visits / year)
  20. 20. Estimated Revenue 0 - 12 MONTHS (US) 12 - 36 MONTHS (GLOBAL) $177M - 422M $450M - $3B 5 - 10% increase in annual US customer traffic (225,000 - 5 - 30% increase in annual global 450,000 more visits / customer traffic (400,000 - 2.4M more year) visits / year)
  21. 21. Estimated Revenue Facts from Annual Report: 60 million / week $13.3B / year revenue 75% of revenue comes drinks bought in store 10,000 US stores 17,000 international stores Calculated numbers: 450 unique customers / store / day $4.93 - average spent / store / customer / day $3.70 - average spent on drinks / store / customer / day
  22. 22. Model Increase discounts by 5% per additional customer, up to 50% Only discount $3.70 spent on drinks Calculate average revenue gained from 1 - 30% additional customers buying discounted drinks Calculate average revenue lost in discounts from 1 - 20% (portion of Starbucks customers who are super regulars and regulars) Estimated revenue = revenue gained - revenue lost
  23. 23. Coffee Market in US Americans spend $40 bil on coffee 8 mil Starbucks 35 mil premium 36 mil low 79 million buy coffee 62 million take away from home coffee breaks
  24. 24. Launching the Program MARCH/APRIL 2013 MAY 2013 1-2 months before app launch ● Introduce the concept with in-store promotion: Wednesday afternoons, bring in friends for discounts on coffee ● In initial phase, groups will simply tell barista that they are together
  25. 25. Launching the Program MARCH/APRIL 2013 MAY 2013 ● Launch Coffee Breaks across all US stores with update to existing mobile app ● Square GPS integration makes allows baristas to seamlessly access groups ● Encourage higher adoption by allowing app users to invite friends via Facebook or Email
  26. 26. Risks & Costs Risks Costs ● Customers dont use it $1.03 million in US ● A competitor will launch something similar ● App Design/Development ● Print and Online Advertising ● Training Baristas
  27. 27. Starbucks Strengths Large & loyal Mobile Payment Locations "Third Space"customer base leader 5 Million active Square Partnership 17,600 locations Free WiFi Starbucks card 2 mill mobile worldwide members transactions per week 10,700 in US Starbucks Evenings
  28. 28. Future MeetUp/Eventbrite Meetup and Eventbrite encourage face to face interaction but many organizers face the issue of finding a physical space for their events. A partnership with Starbucks will: ● give Meetup and Eventbrite organizers more options for space ● promotion for Meetup and Eventbrite ● increase traffic and regulars for Starbucks
  29. 29. Future Online Education Coursera, Udacity and edX are the leaders of the massive open online courses (online course aimed at large-scale participation and open access via the web) By pursuing a partnership and with various online universities, Starbucks can be the sponsored and official meeting place or "campus" for students globally to convene to study. A partnership with Starbucks will: ● increase traffic & regulars ● reinforce goal of facilitating community & customer engagement ● support educational initiatives & help online universities keep student retention high
  30. 30. Future Global Profits Model: Total # of groups globally within online education, MeetUp & Eventbrite Assume 25% of groups use social groups discount Approximately 10 people per group, meet 2 times per month Spend $30.90 per visit Online Education: $590 mil Eventbrite/Meetup: $215 mil Total: $805 million first year
  31. 31. "if you decide to join [a group], youcan cut your risk of dying over thenext year in half."- Robert Putnam, Bowling Alone
  32. 32. "Coffee is a gift to mankind, coffeeunites, coffee entertains, andcoffee educates."
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