1) The document summarizes key lessons from chapters 7-12 of the book "Leading the Starbucks Way" about how Starbucks builds global connections and local relevance. 2) It discusses how Starbucks decentralized its leadership structure into three regions to better address local opportunities and challenges. It also highlights how Starbucks partners with local businesses. 3) Starbucks strives to customize its stores, products, and experiences to local needs while maintaining its brand standards. It innovates food and beverage offerings locally and experiments with new store concepts. 4) Technology, social media, and loyalty programs help Starbucks strengthen connections with customers globally. It aims to integrate digital tools into the in-store experience.

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BOOKCLUB
Leading The
Starbucks Way
Chapter 07-12

2. PREVIOUS CHAPTER
1- 6
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3. THE STARBUCKS CONNECTIONS
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Lessons from Starbucks leaders, managers and frontline partners
will teach you to build connections with those you serve to
effectively enrich your business and personal life

4. A LEADERSHIP BENCHMARK
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7 bold moves to focus on existing strength and identify innovations
and process improvement objectives:
1. Be the undisputed coffee authority
2. Engage and inspire our partners
3. Ignite the emotional attachment with our customers
4. Expand our global presence
5. Be the leader in ethical sourcing and environmental impact
6. Create innovative growth platforms
7. Deliver a sustainable economic model
Unlike the leaders of the proliferation of businesses that failed in
2008, 2009, and 2010, Starbucks leadership positioned the
company for enduring profitability and brand respect.

5. 5 LEADERSHIP PRINCIPLES
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1. Savor and elevate.
2. Love to be loved.
3. Reach for common ground.
4. Mobilize the connection.
5. Cherish and challenge your legacy.
Executing on these principles produces powerful bonds with
employees, customers, suppliers, and even noncustomers.
These operational and emotional bonds will help any leader achieve
sustainable profits, increase brand equity, and fuel online and offline
stories of loyalty and love.

6. Principle 1 (Chapter 2)
IF YOU DON’T HAVE PASSION FOR YOUR PRODUCT,
WHY SHOULD YOUR CUSTOMER?
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1. Setting The Stage Through Knowledge
2. Celebration Rituals
3. Communication Rituals
4. Immersive Experiences
5. Creating Status For Product Expertise
6. Srategy Consistent With Product Passion

7. Principle 1 (Chapter 3)
FROM REPLICABLE AND CONSISTENT TO MAGICAL
AND UNIQUE
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1. What Experience Do You Want Customers to Have?
2. Looking For Experience Creators
3. Guiding Experience Delivery
4. Adding, Erring, and Persisting
5. Keeping it Core and Evolving
6. Co-Create the Experience with your Customer
7. Permission to Build on an Experience Platform

8. Principle 2 (Chapter 4)
IT’S A MATTER OF TRUST AND LOVE
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1. No Point in Seeking Lovability if you aren’t likable or trustworthy
2. Watch Your Feet
3. Integrity During Challenging Times and Looking Through The Lens of
Humanity
4. Trust In a Cup
5. Consistent and Beyond Expectations
6. Wait - This is not what I Expected
7. It’s Time For Passion and Love

9. Principle 2 (Chapter 5)
IT MUST THRIVE INSIDE TO BE EXPERIENCED OUTSIDE
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1. Partnership? Really?
2. Beyond The Money - Caring About Well-Being
3. Investing In Growth And Development
4. Uniting Partners In Crisis and In Community
5. The Power of an Acknowledging Leader
6. Performance Award Programs

10. Principle 3 (Chapter 6)
ASSUME THE UNIVERSAL: SERVE THE UNIFYING
TRUTHS OF HUMANS
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1. Attention
2. Appreciation
3. Community
4. Comfort and Variety
5. The Proof Is In The Cafe

11. CHAPTER 7
Respect, Celebrate, and Customize:
Listening and Innovating to meet Local,
Regional, and Global needs.
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12. Decentralization and Revitalization
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Prior to July 2011, Starbucks operated as
two centralized business entities,
Starbucks U.S. and Starbucks
International, both of which were led from
Seattle, Washington.
To address the mounting challenges and
to seize emerging global opportunities.
Starbucks senior leaders decentralized
and separated into a three-region model.

13. Finding Local Partners
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At Starbucks, hiring is extremely important in
each market, but so is the selection of joint-
venture business partners.
In January 2011, Starbucks leadership deepened
this exploration through a nonbinding
memorandum of understanding with Tata Coffee.
Careful selection of business partners,
decentralized leadership, patient execution of
strategy that integrates your brand essence with
locally relevant needs, and a commitment to the
long term is quite the formula for success beyond
your hometown.

14. Striking A Balance Through The Physical Environment
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Kimberlee adds, “We take what we
learn from concept store tests and
harvest the great ideas, baking
those key learnings into standard
offerings for our core stores.”
Just like our baristas customize the
drinks for our customers, we’re
customizing solutions for our
regions and our markets to make
the place environment suit them.

15. Innovating and Evolving Product
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Belinda Wong, Starbucks president,
noted, “Our customers can definitely
expect to see more locally relevant
innovations across our food and beverage
offerings.”
We initially positioned it as a morning
item, but as a result of customer requests,
it is now available throughout the day.
Starbucks must also consider whether
they can make local offers at a level of
quality that is consistent with their core
products.

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REFLECTION
1. Are you seeking to sell your same products to customers in new
markets, or are you understanding the needs of those markets and
tailoring your solutions to be relevant to them? How far can and do
you go to achieve local relevance?
2. How effectively have you sought partnerships and repositioned
your leadership structure to achieve relevance in new markets?
3. Have you created a “sense of place” in your new markets such that
you can blend your brand with local needs?

17. How Far Can You Go?
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Kris Engskov, addresses a
rather historic change in
lattes in his region: “People
drink Starbucks lattes
throughout the world, and it’s
our top-selling beverage.
A similar challenge occurred
with the Starbucks Espresso
Roast in France.
Takeaway from both the new
latte recipe in the UK and the
Blonde Espresso Roast in
France is that each increases
customer choice in a relevant
way.

18. LOCALIZING TO LOCATION
To see customers being served in this unique and relevant
location. Starbucks has opened a coffee shop directly near Lake
Tahoe in California. Skiers can literally ski in (no need to remove
your boots or skis) and ski out.
Frank Wubben, Starbucks store planned for 2013 on the Swiss
Federal Railroad train: "We are always looking to provide
Starbucks opportunities to meet the people where they are.

19. EXPERIMENTING TO RELEVANCE
Qaalfa Dibeehi, validates the design
and community aspects through his
experience at the Bank.
All appearance and materials and
designs are from the Netherlands ...
This space is designed to encourage
interaction between customers
themselves and between customers
and employees.
This store has its own Twitter
hashtag (#starbucksthe bank) where
employees tweet things like when
the next fresh-baked cookies will be
put out.

20. SPECIAL SENSITIVITIES
In Starbucks, these special
considerations range from logo
presentation to the structure of loyalty
programs.
Starbucks leaders have had to craft
culturally relevant customer reward
incentives. Starbucks used digital
outdoor signs to describe the promotion.
the Starbucks event website, and
customers were notified that they had
received a drink upgrade. This
promotion worked well in the
collaborative Chinese culture,

21. Principle 4 MOBILIZE THE CONNECTION
It examines how Starbucks leaders leverage technology to integrate
a multichannel relationship with their customer base.
Starbucks love of its customers and its appreciation for the
relationship that those customers have with technology leads to a
functional use of digital, social, and mobile tools.

22. CHAPTER 8
GROWING THE CONNECTION THROUGH
TECHNOLOGY
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One of the largest components of
Starbucks current mobile strategy is
anchored to commerce and connects
through the Starbucks Card.
With half of Starbucks Card
customers using it solely as a gift
card and the other half using it as
their own loyalty and prepayment
mechanism.
As of January 2011, customers were
able to download the Starbucks Card
mobile app
COMMERCE, STARBUCKS WEB and MOBILE
CHANNELS, AND LOYALTY/CRM/TARGETED
DATABASE

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In many ways, Starbucks, by
the nature of its culture, was
well suited for social media.
After all, Starbucks leaders
value emotional engagement
and connections with
customers and community.
the Starbucks approach to
Twitter is praised on the basis
of its direct engagement with
customers and
responsiveness to customer
service issues.
GIVING CUSTOMERS SOMETHING TO TALK ABOUT—
IT’S A SOCIAL MEDIA WORLD

25. WHY STARBUCKS IS SUCCESSFUL IN SOCIAL
MEDIA
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Starbucks is the number
one brand when it comes
to engaging social media
users. In discussing this
finding, PhaseOne
researchers noted, “To
achieve this successful
social media engagement,
Starbucks focused its Web
page, Facebook page and
television advertisements
on the individual and his or
her individualized
experience with the brand.

26. BENEFITING FROM THE AMPLIFYING EFFECT
OF SOCIAL MEDIA ON PAID DIGITAL
ADVERTISING
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Paid ads expand the brand’s
reach, while social media
addresses reach along with
engagement, fun, and brand
building.
Starbucks integrate paid
digital advertising into our
social strategy. They take the
viral effect of the messages
we send into our regular feed
and enhance them
intelligently by connecting
with paid digital advertising in
the social space.

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Starbucks leadership has
made vast investments in
technology. One of the most
obvious of these changes
was the company’s transition
to having one-touch free Wi-
Fi in stores.
Starbucks worked with
content partners to create the
Starbucks Digital Network,
which allows customers who
use the in-store Wi-Fi
network to access free
curated Internet content from
various partners.
TECHNOLOGY THAT SERVES MISSION

28. TECHNOLOGY THAT SERVES MISSION
ON
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Technology is not an end unto itself, nor is it something that is
provided for technology “users”; it is a tool for serving and
connecting with your “people” and your “customers”!

29. CHAPTER 9
Personal Relationships Translate:
Sharing the Love from People to Products
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30. Advertising moves people toward goods; merchandising moves
goods toward people.
-Morris Hite-
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31. When personal relationships are created between employees and
customers and strengthened through the use of technology, brands
are given permission to transfer those emotional connections to
new product offerings.
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32. “We really want to make sure we’re earning the connection with the
customers no matter where they are.”
-Annie Young-Scrivner, on retail opportunity-
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Reclaiming Coffee Merchandising in Store

33. A business is not buildings or brand names; it is a collection of
people who should share like-minded objectives. Joint venture
arrangements, Starbucks leadership must ensure that both parties
are carrying out their responsibilities in a reciprocal relationship
gain from the other’s effort.
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Delivering the Business-to-Business Connection

34. Leadership requires skill in collaboratively positioning products in
the context of competitors’ proprietary delivery systems while
constantly innovating proprietary delivery systems of their own
through strategic relationships with manufacturing and distribution
partners.
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Serving Customer at Home

35. This availability increases customer contact with the product and
embeds it more deeply into the customer’s rituals, lifestyle, and
identity.
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Coffee in the Second Place: The World of Work

36. Starbucks has been constantly looking to make its products
available to customers so that they can enjoy a high-quality
beverage wherever they go and speed of they lives.
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Creating on-the-go Solutions

37. Suffice it say that Starbucks leadership is perpetually seeking
magic and exploring synergies that will encourage customers or
give them incentives to widen the array of Starbucks products that
they purchase or consume and the settings in which they purchase
and consume them.
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Getting Customers to Cross the Channel

38. Extending the coffee market into tea, juice, and energy drinks
certainly affords more opportunities to grow the brand through both
café/beverage service environments and shelf space in retail
establishments, but as with all strategic decisions, there are both
risks and rewards.
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Innovating & Acquiring Strong Product in Adjacent

39. Four key risks of Starbucks expanded consumer packaged
goods approach:
1. Competition with established consumer packaged
goods brands
2. Competition from private-label discount brands
3. Projections of flat packaged coffee sales
4. A combination of brand fatigue and unbundling the
beverage from the iconic ritual of carrying it around
in a cup with the green logo and the cardboard wrapper
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The Risk...

40. Starbuck’s grocery revenues were growing almost three
times in 2012. 32 percent of global revenue and 19
percent of its U.S. business from the packaged goods
business.
Why they survive even with the risk?
Starbucks leaders definitely buy commodities, build
connections, and then mobilize those connections to
further strengthen the Starbucks brand.
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… And The Payoffs

41. PRINCIPAL 5
CHERISH AND CHALLENGE YOUR LEGACY
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42. CHAPTER 10
HONOR THE PAST, BUT DON’T BE TRAPPED IN IT
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43. The overarching gestalt of the company—demonstrated by its plans
for redesigned stores, investments in innovative coffee machines,
an expansion of its digital networks and rewards programs—is
striving for every branch to be both more versatile and more
artisanal.”
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Changing the Paradigma

44. Alignment among leaders and partners is essential to innovation.
Innovators and operators must share a common vision to make
sure efficient improvement result.
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Tightening Up

45. Invention is a new creation and an innovation is a new solution that
attracts a customer.
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Curiosity Directed Inward

46. By definition, the key to innovation is relevance to the audience.
However, seeking relevance is not for the faint of heart or the risk-
averse.
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Relevance & Risk

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The Ever-Moving Relevance Target
The Food & Beverage
Experimentation
New Concept
Technological Advances for
In-and Out-of-Store
Experiences

48. Mix curiosity, courage, and discipline in a tireless pursuit of the
ever-changing needs of your people, your customers, and the
profitability of your business.
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A Virtual Learning Lab

49. CHAPTER 11
TAKING THE LONG VIEW:
BUILDING SUCCESS THAT LASTS
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50. Every store is part of a community, and we take our
responsibility to be good neighbors seriously.
We want to be invited in wherever we do business.
We can be a force for positive action—bringing together
our partners, customers, and the community to contribute
every day.
Now we see that our responsibility—and our potential for
good—is even larger.
The world is looking to Starbucks to set the new standard,
yet again. We will lead.
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One of Starbucks Principle: Our Neighbourhood

51. SUSTAINABLE BUILDING DESIGNS
Building sustainable stores (customer-facing and non-customer-facing)
Educating consumers about environmental lifestyle
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Environmental Stewardship_1
Reclamation Drive Thru, Tukwila, Washington, USA

52. BRINGING MATERIALS BACK FOR A SEQUEL
The recyclability of Starbucks cups
The hot cup sleeve
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Environmental Stewardship_2
“The Cup Summit”

53. Ensure our coffee is ethically sourced
Invest in farmers and their communities
Improve farmers’ access to carbon markets
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Caring About People That Bring Products To Market

54. Urban Coffee Opportunities (stores in underserved urban neighborhoods)
The Starbucks Foundation supports community development projects in
coffee-, tea-, and cocoa-growing regions
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Upping The Community Partnership

55. Helping to finance small-business job creation with Create Jobs for USA
Provide leadership and training programmes for youth
Diversity and Inclusion
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Job Creation

56. CHAPTER 12
FORGING A REAL LIFESTYLE CONNECTION
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57. Starbucks started out as a single store and anything is possible if
we take the lessons learned from Starbucks as a nudge to think about how
we can innovate and expand our products, services, social media
tools, technologies, and channels.
The leaders at Starbucks also demonstrate what is possible when you
foster product passion, teach your people the importance of
human connections, seek operational excellence and
efficiency, and engage in a never-ending pursuit of relevance.
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58. Starbucks is certainly a business that has all the traditional aspects of
lifestyle branding. However, Starbucks have also taken their value
proposition up a level to an “advanced lifestyle” brand. Not only
does Starbucks “project a lifestyle,” but it enters the lifestyle of its customers.
Starbucks have positioned their brand to meet their customer on the go.
It is committed to understanding our in-store customers and connecting
to them in ways that fit both where and who they are.
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60. THANK YOU
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