Starbucks has over 15,000 stores in 35+ countries with $11 billion in annual revenue and 20% yearly growth. Their success is attributed to customized drinks, best HR practices like generous benefits, and strategic expansion. Starbucks trains employees extensively to be coffee experts and ensure a welcoming environment in high traffic locations.

1. STARBUCKS !
SUCCESS IN A CUP
LEE MIN

2. INTRODUCTION
§ Top Coffee Retailer in the World
• 15,000 stores in more than 35 countries
• US$11,411 million in revenue [2007]
• Sales increase 20% a year
• 30 million customers visiting each week
§ High Returns
• 1992: Investment of $10,000 in first public offering
• 2007: Receive $650,000

3. § History
• 1982: Howard Schutz joined
Starbucks in Seattle, Washington
• 1984: Struck Italian’s concept of
“espresso” culture
• 1987: First cafe-concept store of
Starbucks in Seattle
• 1992: Listed in Nasdeq
[17 to 165 stores in 5 years]

4. FACTORS ATTRIBUTING TO
SUCCESS
1. Customization & Variety of Drinks
2. Best Practices in Human
Resource
3. Placing Strategy

5. CUSTOMIZATION OF PRODUCTS
§ Handcrafted Drink
• Handcrafted by friendly baristas
• Extensive choice of 30 blends & single-origin coffee

6. § Personalized Cup
• Chic and easy Lingo Ordering
a
Drink
in
7
easy
Steps:
» E.g. Iced Venti Java
Chip Frappuccino, 1. Hot
or
Iced
Drink?
with whip 2. Size
3. Drink
Beverage
• Customized cup in 7 4. Wet
or
Dry
easy steps 5. Number
of
Espresso
Shots
6. Type
of
Milk
7. Extra
DirecLons

7. WIDE VARIETY OF PRODUCTS
§ Product Offerings Available in Retail Stores
• Within 4 main categories:
Starbucks: Retail Sales Beverages [77%]
Beverages
Food
items
Food items [15%]
77%
4%
4%
15%
Whole
Beans
Coffees
Whole coffee beans [4%]
Coffee
making
equipment
and
others
Coffee making
equipment &
Others [4%]

8. § Other Products Available in Retail Stores
CDs
Books

9. § Product Offerings in Convenience Stores
• Joint Ventures with other
organizations
- Pepsi Co Inc
- Dreyers Grand Ice cream

10. DIVERSE DISTRIBUTION OF
PRODUCTS
§ Products and Services Available to both consumer
markets & Corporate Organizations:
• Office Coffee • Airlines
- Provides coffee to thousands - Supplies coffee & tea to
of company in US United Airlines’ 75
million passengers

11. BEST PRACTICES IN
HUMAN RESOURCE
§ 7th on “Forbes List of 100 Best Companies
to Work for, in 2007”

12. GENEROUS BENEFITS PROGRAM
§ Wide Range of Benefits
• Privileges included in program:
- Paid holidays
- Health care benefits
- Optional employee stock ownership program
§ Mission Review Committee
• Employees are able to raise concern over issues that are
not in line with mission statement
- Eg: Insufficient paid leaves was brought up, and management
responded immediately with extended 2 weeks leave

13. § Competitive advantage for Starbucks
• Employee turnover rate that is 120% less than industry average
• Employees were encouraged to stay on to maintain service standard
“One of the reasons that Starbucks employees
are often so pleasant and helpful is that
Starbucks is a great company to work for. It
takes cares of employees and treat us with
respect… We’re encouraged to have a good time
while we are at work, and that makes a huge
difference in the atmosphere we create for
customers.”
Starbucks partner, Joy Wilson

14. TRAINING PROGRAMS
PROVIDED
§ Training programs provided are fully-paid and
consisting of:
• Before working in Starbucks
- “Therapy-like” training program
- Consist of knowledge and skills
of the art of coffee brewing,
coffee’s history
- Known as baristas for upon
completion
• Upon commencement of work
- Coffee Masters Program – Encouraged to be real coffee experts
- Re-training provided

15. § Materials provided to employees
• Coffee Passport
- Green booklet with 104 pages
- Consist of all information on coffee farming,
roasting, product offerings
- Expected to understand all information within first 3 months of work
• “Find your Favorite Drink” booklet
- Consist of coffee brewing lingos and product offerings
- Baristas required to taste the different product offerings offered , and
recommend heir favourite customers

16. • The Green Apron Book
- Consist of the mission statement
and core values to remind employees
- It is mainly to encourage employees
to practice the 5 ways of being:
1. Be Welcoming
2. Be Genuine
3. Be Knowledgeable
4. Be Considerate
5. Be Involved

17. EXPANSION STRATEGY
§ The “Everywhere” strategy
“Blanket an area completely, even if the stores cannibalize one
another's business. A new store will often capture about 30% of the
sales of a nearby Starbucks, but the company considers that a good
thing: The Starbucks-everywhere approach cuts down on delivery
and management costs, shortens customer lines at individual
stores, and increases foot traffic for all the stores in an area.”
Fortune Magazine

18. STRATEGIC LOCATIONS
§ Starbucks are strategically located in high traffic
areas with high visibility:
• Vital Success Factor
- Customers were able to stop at a
Starbucks easily
- Having a Starbucks in an area is
an indication that an area has
arrived
• Location being the 1st Criteria accessed in Overseas
Ventures
- Locations are accessed by 3 criteria- Demographics, Branding
potential's, Financials
- Sites are ranked from A to D before chosen

19. CONDUCIVE ENVIRONMENT
§ Starbucks retail outlets have an inviting atmosphere:
• Attention to every Detail
- Management aim to “offer
everyone a sense of belonging”
- Pay special attention to every
single detail in store environment
• Customize Design for
Individual Store
- A team of in-house designer and
architects
- Sites are ranked from A to D
before chosen

20. CONCLUSION
§ Starbucks have been successful and will continue to
grow in the future.
• Aspired Long-term Goal by 2012
- Tripling annual sales to $2.3 billion
- Continuous expansion from 15,000 to 40,00 store worldwide
• Suggestion to Aid Growth
- More collaborations to produce more convenience food products
- Increase sales of other products such as CDs, books
- Continue projecting Starbucks as a way of lifestyle, instead of just
“ another” cafe