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Beyond a Cup of Coffeé


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Beyond a Cup of Coffeé

  1. 1. 1STARBUCKS; BEYOND A CUP OF COFFEE Management and Organization Aykut Berber, PhD Sorted by presentation order; Evrim Gözener Işıl Topal İpek İpekliler
  2. 2. Outline of the Presentation;• History of Starbucks; The company • Store’s Strategyis on Spotlight • Outsanding Contribution• Starbucks Offers a Little of • They grow up so fast… But how?Everything • Site Characteristics• Italy Issues… • Starbucks Organization Chart• Customer Oriented Strategy of • Industry and Competitive AnalysisStarbucks Company • SWOT Analysis• Product Diversity • Staffing• Coffee Beans of Starbucks Quality • The Future• Beverages • Responsibility of Starbucks• Cup Sizes; Hot&Cold Beverages • Speculations• Starbucks Salty • Advertising• Starbucks Desert • Recommendations• Structure of Stores• Innovation Conduction• Starbucks Corporate Strategy 2
  3. 3. Once upon a time Evolution of in Seattle… Starbucks logo; according the• Starbucks was opened in 1971 in history, Seattle, Washington by Jerry •The Starbucks siren was topless and had a Baldwin (a teacher) and Zev Siegel (a fully-visible double fish tail. teacher) and Gordon Bowker (a •In the second version, the logo also writer). inherited the stars from the Il Giornale logo• Howard Schultz, an entrepreneur, •In the current version, her navel and chest joined them in 1982. are not visible at all, and only vestiges• Mr. Schultz influenced coffee bars in remain of the fish tails. Italy and established the chains of II •Starbucks has grew from 55 stores in 1989 Giornale Coffee shops. to over approx. 20.000 locations today in 55• A few years after, the first owners countries around the world bought of the Peets Coffee and Tea •20 Million customers a week shop and Starbucks was transferred •Products sold include; Beverages to Mr. Schultz. Pastries• Finally, Starbucks was founded by Whole coffee beans combining two brands; II Giornale Coffee-related retail items ,such as; Mugs, and Starbucks. Travel mugs, Coffeé Machines, Thermos bottles 3
  4. 4. Starbucks Offers a Little of Everything• Customer satisfaction priority is concept of the Starbucks Company• Products are tasted several times to markets of different countries• Implementation of customer satisfied; Starbucks card, gift card,some of stores have cd burning unit.• Turkish people was welcomed the first store on 2003 in ErenkoyIstanbul• Hot sleeve, Starbucks cards• Today , Starbucks has reached 106 stores in Turkey• Turkish coffee culture has not been changed• Starbucks to behave respectfully expanded in Turkey and hasintroduce filter coffee culture to Turkish people• Feeling unique experienced, think indivudially; every customer cancreate their own coffee. 4
  5. 5. Italy Issues…• The main reason is that the coffeé in Italy too good• Italians have rejected Starbucks Coffeé• Italy has very complicated coffeé market 5
  6. 6. Customer Oriented Strategy of Starbucks Company•Starbucks is the first chain of coffee shops found all over the world•Customers feel free all day with one cup of coffee without disturbing•To be the "extra place" people frequent after home and work.•Customer confidence; serving high quality fresh coffee in everystores around the world.•To address the five senses Tasting; Delicious coffee Touching; Comfortable chairs Listening; smooth jazz Smelling; excellent smells of roasted coffee And; nice view in every storesVarious milk options, syrups and they have up 85,000 different drinkcombinations so priority of individual needs. 6
  7. 7. Coffee Beans of Starbucks Quality •Starbucks coffee beans are grown in within an area, located near the equator between the tropic of Cancer and Capricorn Latin America Asia PasificProduct Diversity Arabian Peninsula oBrazil•Productions are oRogusto; sea level, 2% cafeinchanged for every oArabica; Starbucks preffered 1% cafeinseason; •A coffee tree contains 680 grams beans in a year. christmas blend •Starbucks always prefers washed and natural dried house blend beans. breakfast blend French roasted •A coffee tree averages from 15–30 ft. in height and Italian roasted at least 70 inches of rainfall year. Caffee Verona Decaf blend Kenya by Starbucks Sumatra by Starbucks Guatemala Antiqua 7
  8. 8. Beverages; Alternative Espresso-based Cold DrinksEspresso –based Drinks •Caffé Latte with ice•Caffé Latte •Iced Caramel Macchiato•Cappuccino •Iced White Chocolate Mocca•Caramel Macchiato •Iced Caffé Americano•Caffé Mocca •Iced Chai Tea Latte•White Chocolate Mocca •Orange Juice•Caffé Americano Coffee – based Snowy Cold Drinks•Espresso •Coffee•Espresso Macchiato •Java Chip Chocolate•Espresso Con Panna •CaramelClassic Products of Starbucks: •Espresso•Coffee of the day Caramel – based Snowy Cold Drinks•Caffé Misto •Vanilla•Press Coffé •Java Chip Chocolate•Turkish Coffee •CaramelOther Delicious Alternative Fruit – based Snowy Cold Drinks•Premium Hot Chocolate •Rasberry Black Currant 8 •Mango Passion Fruit
  9. 9. Cup Sizes; Hot&Cold Beverages Name Measurement Notes Short 8 oz (≈ 237 mL) Tall 12 oz (≈ 355 mL) Grande 16 oz (≈ 473 mL) Italian for Large 20 oz hot (≈ 591 mL), 24 oz cold Venti Italian for twenty (≈ 710 mL) Trenta 31 oz cold only (≈ 917 mL) Italian for 9 thirty
  10. 10. Starbucks Salty Starbucks Deserts oPeach pie•Ryan Bread with Turkey oProfiterole cake•Mini whole wheat with cheese oMosaic Pie•Mistic oBrownie cheesecake•Vegetable pie oWhite chocolate raspberry cheesecake•Chicken Sandwich oLemon cheesecake•Fiesta oBella vista•Ham and wheese oCarrot Cake•Three cheese sandwich oWhole wheat carrot cake•Ham wrap oMosaic Cake•Vegetable wrap oLemon cake•Sesame bagel with cheese oStarbucks brownie•Cheese crossant and roll oDoppio cookie•Whole wheat puff oMisto cookie•Olive puff oBerliner oCookie of Chocolate walnut 10
  11. 11. Store Manager Structure of Stores Assistant Manager•Every store has equal quality•Starbucks also serves local beverages and tasteof foods Shift Supervisors•Stores design and goods are almost look alike•Some of stores serve wine in Canada and theStates Baristas Baristas Baristas•Organization Chart of stores are exactly alike•Starbucks does not franchise operations andhas no plans to franchise in the foreseeablefuture•One Major frenchising around the world;Turkey, Russia and Meiddle East is connectedShaya Group Company•Being a Starbucks employee means; to work amulti-national / global company 11
  12. 12. Innovation Conduction•Every store has equal quality•Starbucks also serves local beverages and taste of foods•Stores design and goods are almost look alike•Some of stores serve wine in Canada and the States•Organization Chart of stores are exactly alike•Starbucks does not franchise operations and has no plans tofranchise in the foreseeable future 12
  13. 13. A Delicious Idea; “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”Starbucks Corporate Strategy• Maximize market penetration• Provide a relaxing, attractive social atmosphere• Offer high-quality products• Create a great working environment• Achieve profitability 13
  14. 14. Store’s Strategy Outsanding Contribution• It is to create a comfortable Third • Entrepreneurs make unique Place environment like your contributions to the American home (socializing, playing game, homeworks, working, discussing economy: place) • Create innovations that• Serve customer a customized improve our quality of life: high-quality product and expand product range • Entrepreneurs create new jobs: (sandwiches,beverages,apple CD • Entrepreneurs improve the burning) position in global economic• Minimize overall expenses by competition: focusing on controllable expenses• customer portolio impact service • Entrepreneurs reinvest their quality (A Class and C Class newly created wealth in the customers) community:• Customer satisfaction – ambience,service,offer 14
  15. 15. They grow up so fast… But how?• Start with a good business Growth of Starbucks concept 7000• Think big 6000• Think outside the box 5000• Create a unique expreince Number of Stores 4000• Keep customers happy 6294 3000• Dig deep in the customer’s 4707 wallet 2000 2135• Good management 1000 1412 676 17 55 116 272 S1 0 1987 1989 1991 1993 1995 1997 1999 2001 2003 Years 15
  16. 16. Site Characteristics Since, they have won accounts• Most stores ranged in size from with many other companies,1,000 to 1,500 square feet and werelocated in office buildings, downtown such as:and suburban retail centers, airport • Westin Hotelsterminals, university campus areas, or • Canadian Airlinesbusy neighborhood shopping areasconvenient to pedestrian foot traffic. • Kraft Foods (to extend into grocery stores)• Only a select few were in suburban • Hyatt Hotels Corp.malls. While similar materials and • Applefurnishings were used to keep the • Sheraton Hotels (now Starwoodlook consistent and expenses Hotels)reasonable, no two stores ended up • United Airlinesbeing exactly alike. • Nordstrom • Canadian Bookstore Chapter • Msnbc 16
  17. 17. Starbucks Organization Chart CEO President Executive VP, Executive VP, Executive VP, Executive VP, Legal Supply Chain & Coffee Partner Resources Chief Financial Officer Senior VP, Coffee President, Japan President, Europe,•Functional in structure and relatively flat Middle East, Africa•Team work, workload share is essential President, North America•Basic management style is Laissez Faire VP, Southwest•Management motivates through reviews VP, South Centraland raises VP,•Work duties are assigned by shift President, Northwestsupervisors International•Employees are allowed to use initiative United Kingdomand empowered to make decisions Australia•Team Work Thailand•Employee Training 17
  18. 18. Industry and Competitive SWOT Analysis Analysis • Strengths o Largest market share in industry• Competitive Activity o Differentiated atmosphere oMany companies are in the market and competition is fierce oCompetitors use location, product mix, • Weaknesses and store atmosphere differentiation to o Cought dirtiness and cleaness in establish market niche the stores• Industry Costs and Capital Structure • Opportunities Low to moderate costs for each location o Turkish coffee is served to Major start-up expenditures are property customers and equipment Major operating costs are labor and cost of sales •Threats McDonalds and Cinema o People who are against of States coffee culture 18
  19. 19. Staffing• Location has one manager, an assistant manager and 16 partners• Benefits package includes health, dental, and vision care, stock options, free shift drinks, and a free pound of coffee each week• Raises are based on semi-annual performance evaluations with raises ranging from 0-5%• Bonuses are not utilized, but the location has given away non monetary rewards• Motivated employees creates happy a loyal customers 19
  20. 20. The Future• Schultz believed that the company had to challenge the status quo, be innovative, take risks, and alter its vision of who it was, what it did, and where it was headed. Under his guidance, management was posing a number of fundamental strategic questions: o What could Starbucks do to make its stores an even more elegant "third place" that welcomed, rewarded, and surprised customers? o What new products and new experiences could the company provide that would uniquely belong to or be associated with Starbucks? o What could coffee be—besides being hot or liquid? How could Starbucks reach people who were not coffee drinkers? o What strategic paths should Starbucks pursue to achieve its objective of becoming the most recognized and respected brand of coffee in the world? 20
  22. 22. SHARED PLANET and GLOBAL RESPONSIBILTY• ‘’Our commitment to doing business responsibly’’ for a better future for our World. We want to care for our communities because it is community that makes us who we are – that third place in your neighborhood.• Within this, Starbucks have identified three areas of focus: - Environmental stewardship - Ethical sourcing, - Community involvement. 22
  23. 23. ENVIRONMENTAL STEWARDSHIP : 100% of our cups will be reusable or recyclable, and we will significantly reduce our environmental footprint through recycling, energy and water conservation and green constraction. Recycling From back-house process of recycling to front-store recycling. Cup sleeve to avoid double cupping ‘’Bring your own tumbler, discount is 10 cents’’ Recyclable plastic cups Recyclable napkins ‘’ The most extensively recycled material in the U.S.’’
  24. 24. Green Construction Starbucks is Pilot store in LEED (Leadership in Energy and Environmental Design) Certification Program using lover amounted organic chemicals for painting recyled flloring tiles Energy and Water Conservation  Water is the main ingredient in most beverages  Dipper well washing system with stream  They save 568 litres per day in one store  Electric is the biggest impact on climate change  Renewable energy equipment
  25. 25. ETHICAL SOURCING : buy and serve 100% responsibly grown and ethically traded coffee. FAIR TRADE  To serve a great cup of coffee while helping to improve the lives of farmers and protect the environment  Farmer support centers  high-quality coffee for the futureCOMMUNITY INVOLVEMENT :contribute one million communityservice hour annually. TURKEY  Tohum Otizm Vakfı  Kardeş Okul Project  Building schools, libraries, village clinics
  26. 26. SPECULATIONS1–COFFEE WARS•The storm brew between Starbucksand McDonalds.•The fact is that coffee is more aneed than want.•This 2 brand are polar opposites.•Dunkin &Donats involved in fight byaffording 99 cent lattes all day.•‘’Coffee war made us Better’’2 -EFFECTS OF CRISIS ON STARBUCKSStarbucks have decided to close 600stores which are not profitable.‘’Coffee businees affected by theMortgage Crisis. Around thestarbucks stores, there is a greatnumber of empty houses’’
  27. 27. ADVERTISING There was not any commercial about Starbucks, but its market products and social responsible projects. ‘’Focus on Quality’’
  28. 28. Ad champaign of Starbucks inNew York Times
  29. 29. RECOMMENDATIONS• Starbucks products shoukd be placed in international market, actually in most countries has bottled frappicino, ice cream , and coffee beans in markets , but not in Turkey market.• Recycling facilities should be in Turkey for storage and recycling.• Car service should be enable for Starbucks• Starbucks should open stores in University campuses.• There sould be kid menus or beverages for kids• Gift card should be brougt in Turkey Starbucks stores.
  30. 30. Thank you  Questions & Comments 30