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Matthew Seibert
Fay Saechao
Jehrica Marini
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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

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Employee Training
Starbucks Culture
Community Service
Ethical Sourcing
Purchasing Coffee Beans
Quality Control
Lean Operating Strategy
2012 Issues Facing Management
Conclusion
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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
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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
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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.
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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
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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
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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
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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
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Shared best practices
among stores
nationwide
Revamped menu
offerings

New and improved
environmentally
friendly programs
Provided more
resources for
employees
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Changes of marketing
techniques using
social media
platforms
Facebook, Twitter
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Differentiating
features that cause
buyers to prefer
product/service over
brand rivals such as
Peet’s Coffee
Quality beans that
can be served at
premium price
Product line
Products in retail
stores
Amazing customer
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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
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
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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
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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”
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Core value

◦ “To build a company with soul”

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Human connection

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Starbucks employees are called “partners”

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Focus on diversity

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Encouraging atmosphere
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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

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Starbucks goal regarding the purchase of
coffee is to ensure that one hundred percent
is ethically source by the year 2015
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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
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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
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Strong results for fiscal year 2011

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Increased commodity costs

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Strong competitors

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Rollouts of new point-of-sale and inventory
management system

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International market expansion

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Reorganization of leadership structure


Strengthen the “Starbucks experience”



Continue its quest to ethically source all of
their coffee by 2015

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Continue to take strategic action regarding
the tea industry
Further differentiate themselves
from their competition
Starbucks Presentation

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Starbucks Presentation

  • 2.            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 Operating Strategy 2012 Issues Facing Management Conclusion
  • 3.  To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time
  • 4. • • • • 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
  • 5.     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
  • 6.       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.
  • 7.     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
  • 8.   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
  • 9.     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
  • 10.   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
  • 11.     Shared best practices among stores nationwide Revamped menu offerings New and improved environmentally friendly programs Provided more resources for employees
  • 12.   Changes of marketing techniques using social media platforms Facebook, Twitter
  • 13.      Differentiating features that cause buyers to prefer product/service over brand rivals such as Peet’s Coffee Quality beans that can be served at premium price Product line Products in retail stores Amazing customer
  • 14.    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
  • 15.
  • 16. 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
  • 17. 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
  • 22.    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
  • 23.    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”
  • 24.  Core value ◦ “To build a company with soul”  Human connection  Starbucks employees are called “partners”  Focus on diversity  Encouraging atmosphere
  • 25.    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
  • 26.  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 source by the year 2015
  • 27.
  • 28.     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
  • 29.     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
  • 30.  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
  • 31.  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

Editor's Notes

  1. Starbucks CEO says he wants to do for tea what he's done for coffee