Starbucks. The Starbucks Logo The idea of the siren used in the Starbucks logo originates from Herman Mellville’s Moby Dick She is designed to mesmerize.

Starbucks

The Starbucks Logo

• The idea of the siren used in the Starbucks logo originates from Herman Mellville’s Moby Dick

• She is designed to mesmerize the coffee drinkers; to “lure them to the cup”

• A slightly different logo was created for each coffee, and appeared beside it on the menu board as well as on the package of the coffee.

Starbucks’ Objective

• To establish Starbucks as the most recognized and respected brand in the world.

Starbucks’ Mission Statement

• To establish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining our uncompromising principles while we grow.

Guidelines to Reach Mission Statement

• Provide a great work environment and treat each other with respect.

• Embrace diversity as an essential component in the way we do business.

• Apply the highest standards of excellence to the purchasing, roasting, and fresh delivery of our coffee.

Guidelines to Reach Mission Statement (continued)

• Develop enthusiastically satisfied customers all the time.

• Contribute positively to our communities and our environment.

• Recognize that profitability is essential to our future success.

Starbucks Timeline

Howard Schultz joins Starbucks as Dir. of Retail

Schultz founded II Giomale offering brewed coffee & espresso beverages w/ Starbucks coffee beans

84 Starbucks locations

676 Starbucks locations & Starbucks Intl formed

2,292 Starbucks locations

1st Starbucks location in Seattle

Schultz tests new coffee bar concept

II Giomale acquires Starbucks assets

Changes name to Starbucks Corp.

272 Starbucks locations

1,886 Starbucks locations

Joint venture w/ Magic Johnson

Launch Starbucks .com

6,604 Starbucks locations

Acquired Seattle’s Best Coffee Co.

1982 1985

1971

1990

1987 1998

2000

1993

1995

20031984

In the beginning…

• Starbucks first opened in 1971 in Seattle’s Pike Place Market.

• In 1982, Starbucks began providing coffee to espresso bars and fine restaurants.

• In 1987, Starbucks became Starbucks Corporation.

• And this, of course, was just the beginning of the astounding growth that we have witnessed over the last decade.

So, does anyone remember where the Starbucks logo (the siren)

came from?

Moby Dick, by Herman Mellville

The Growth of Starbucks

1987 1989 1991 1993 1995 1997 1999 2001 2003

S117 55 116 272676

6294

4707

21351412

0

1000

2000

3000

4000

5000

6000

7000

Num

ber

of S

tore

s

Years

Starbucks Today

• Starbucks now has approximately 6,294 coffeehouses in North America alone,

• And they have approximately 900 locations outside of North America.

They grow up so fast…but how?

• In 1991, Starbucks became the first privately owned company to offer a stock option program to all of their employees.

• Higher employee satisfaction leads to lower turnover rates, which in turn leads to lower employee training costs, which leads to greater profits.

• Starbucks also gives back to the community, both local and abroad.

• This provides Starbucks with plenty of good publicity.

• Starbucks also takes great interest in its suppliers well-beings.

Foreign Exchange

• Starbucks opened its first store outside of North America in 1996, in Tokyo, Japan.

• Starbucks sometimes faces fierce opposition when trying to enter certain markets.

• In 1999, when Starbucks came to downtown Athens, many locals and college students objected.

What major bookstore is a Starbucks most likely to be found

inside?

• In 1993, Starbucks Corporation started a relationship with Barns and Noble, Inc.

Since, they have won accounts with many other companies, such as:

• Sheraton Hotels (now Starwood Hotels)

• United Airlines• Nordstrom• Canadian Bookstore

Chapter

• Westin Hotels• Canadian Airlines• Kraft Foods (to extend

into grocery stores)• Hyatt Hotels Corp.

Starbucks Gives Back

CARE

• Starbucks distributes funds in response to any natural disasters that may occur in countries where their coffee and tea originate.

Starbucks Foundation

• Created by the Chairman of Starbucks, Howard Schultz.

• Dedicated to creating hope, discovery, and opportunity in communities where Starbucks are located.

Support Conservation International’s Conservation

Coffee Program

• Encourages ecologically sound coffee growing practices.

FY 2002 Revenue by Division

0

20

40

60

80

100

Company-Operated Retail Stores Speciality Operations

85%

15%

FY 2002 Net Revenues

975.4

1,308.7

1,686.8

2,177.6

2,649.0

3,288.9

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1997 1998 1999 2000 2001 2002123 consecutive months of positive comparable store sales growth

11 consecutive fiscal years of comparable store sales growth of 5% or more

Revenue growth of 24% in Fiscal Year 2002

Net Earnings of $2151 million

Millions

Starbucks Vs. Top CompetitorsAnnual Revenue

FY 2002

3,288.9

692.6

62.2

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Starbucks

AFC Enterprises

Diedrich Coffee

Source: Hoover's Online Services

Millions

FY 2002 Specialty Operations % Revenue By Business Unit

0

5

10

15

20

25

30 Foodservice

Retail Store Licensing

Intl Retail StoreLicensing

Grocery ChannelLicensing

Warehouse ClubAccounts

InteractiveOperations

Equity Investees &Other Initiatives

27%

17%

13%

7%5%

18%

FY 2002 % Retail Sales Mix by Product Type

0

10

20

30

40

50

60

70

80

Beverages Food Items Whole Bean All Other Retail

77%

13%6% 4%

Now for a tough one…About how many Starbucks stores are

open?

There are approximately 6,294 Starbucks stores currently in

operation

Your last chance to answer! Name the two Starbucks

beverages available at most (non-Starbucks) retail centers:

• Frappuccino

• Double Shot

Keeping it Fresh

• Starbucks tries to introduce a few new beverage ideas every year, just to keep things interesting.

Notable Additions for 2002

• Cream Frappuccino– Geared more towards non-coffee drinkers

• Starbucks Card

• Name Game– Effort to “get to know customers”

They say, “Don’t mess with a good thing”…but what if we did?• Say Starbucks wanted to introduce a new,

very aromatic coffee beverage. Is the observation method the best way to go?

• Of course! – Personal observation should be used to evaluate

people’s reaction to the new flavor and aroma.– Mechanical observation should be used to track

the sales of the new product.

Survey Results

1

7

4

12

1

2

1

0

2

4

6

8

10

12

Quality ofDrinks

Atmosphere

Why do you go to Starbucks?

7

6

7

6

2

0 0

0

1

2

3

4

5

6

7

Better thanOthers

Not as Goodas than Others

Starbucks' Beverages as Compared to Others

7

6 6

8

1

0 0

0

1

2

3

4

5

6

7

8

Better thanOthers

Not as Goodas Others

Starbucks' Atmosphere as Compared to Others

8

7

3

5

3

0

2

0

1

2

3

4

5

6

7

8

Very Likely Not at all Likely

How Likely are You to Choose Starbucks over Others?

2

4

13

7

1

0

2

4

6

8

10

12

14

More than Once aWeek

Once a Week Once a Month Once a Year Never

How Frequently do you Visit Starbucks?

For What Purpose do You go to Starbucks?

Socialize with Friends16%

To do office/school work28%

To read9%

Just to get some coffee and leave47%

Starbuck’s Snapshot

Store #:____________________Date:___________ Basic Score _________ Store : _______________________ Time: __________ Legendary Service ____ Service /34 Register partner verbally greeted you /6 Register partner made eye contact /4 Register partner thanked you /6 Barista thanked you /6 Barista made eye contact /4 Partner displayed knowledge of products /4 Partners were neat and clean /4 Comments:____________________________ ____________________________________ ____________________________________ ________________________________________________________________________

Product Quality /24 Beverage Purchased: _________________________ Order was filled accurately /6 Beverage temp acceptable /6 Beverage weight acceptable /6 Beverage presented correctly /3 Condiment bar supplies available /3 Comments:____________________________________________________________________________________________________________________________________________________________________________

Cleanliness /26 Tables and chairs clean (inside and outside) /5 Condiment bar clean/free of debris /5 Floors free of spills/debris /4 Restroom clean/supplies available /4 Trash cans clean and not overflowing /4 (inside and outside) Back service counter clean and organized /1 Pastry case clean and organized /2 Pastries signed correctly /1 Comments:________________________________________________________________________________________________________________________________________

Speed of Service /16 Total Wait Time ____ Total time within the standards? /16 Amount of time spent in line ____ Amount of time waiting for beverage ____ Number of service channels/lines open ____ Number of partners observed on floor ____ Service Times <3 min = 16 pts 3:01 – 3:30 = 13 3:31 – 4:00 = 10 4:01 – 4:30 = 7 4:31 – 5:00 = 4 >5 min = 0 pts Comments:________________________________________________________________________________________________________________________________________

Legendary Service * = Very Poor ** = Poor

*** = Neutral **** = Good ***** = Legendary

Describe the tone or feeling of the service experience in the store. ________________________________________________________________________________________________________________________________________________ Did you see any customers being personally recognized? _________________________________________________________________________________________________________________________________ Were all partners focused on customer needs? ____________________________________________________________________________________________________________ Did you see any partners initiate conversation with customers? _________________________________________________________________________________________________________________________________ Were partner responsive to service delays or other issues that occurred? _________________________________________________________________________________________________________________________________

Store #:

Store:

Date:

Time:

Basic Score:

Legendary Service: