Starbucks: A Story of Growth - case study presentation for EBS/DBS
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Transcript of Starbucks: A Story of Growth - case study presentation for EBS/DBS
Case Study Presentation by: Brandon J. Murray 2
Starbucks Mission
“to inspire and nurture
the human spirit – one person, one cup and
one neighborhood at a
time.”
“establish Starbucks as
the premier purveyor of the finest coffee in the world
while maintaining our uncompromising principles
as we grow ”
THEN NOW
Case Study Presentation by: Brandon J. Murray 4
Starbucks Founded
Howard Schultz acquires Starbucks
U.S. Coffee Consumption in a major slump!
Case Study Presentation by: Brandon J. Murray 5
The Rise of the
Coffeehouses
! In San Francisco & New York, small specialty coffeehouses and roasters were being established
! Starbucks was created in this mold, aiming to roast and sell excellent coffee
Case Study Presentation by: Brandon J. Murray 6
We should sell prepared
coffee drinks like the Italians
are doing!!
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Mr. Schultz leaves Starbucks!
We love roasting and selling beans ...not interested in selling prepared
drinks.
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Mr. Schultz buys Starbucks!
Now I think I WILL make & sell those prepared coffee drinks!!
Case Study Presentation by: Brandon J. Murray 9
Starbucks Expansion ! In 1996, Starbucks began executing two
initiatives: ! Selling Starbucks products through mass
distribution channels ! Dramatically expanding its footprint
Case Study Presentation by: Brandon J. Murray 10
Mass Distribution Channels
“ to accelerate growth of the
Starbucks brand into the grocery channel across
the United States.” –Howard Schultz, in response to Kraft agreement
Case Study Presentation by: Brandon J. Murray 11
Licensing Agreements!By 2008, 16% of of Starbucks revenues came from sources other than its company-owned retail stores.
Case Study Presentation by: Brandon J. Murray 12
Starbucks Retail Expansion
1996 1,015 Stores
2001 4,709 Stores
2007 15,011 Stores
Case Study Presentation by: Brandon J. Murray 14
Schultz Returns as CEO
I’m back…. now check out my transformational
agenda to cut $580 million in 2009 and
deliver 90% of store orders on time and
without errors.
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Store Closed for…
• Mr. Schultz closes nearly 1,000 underperforming stores
• Mr. Schultz closes Starbucks stores nationwide for an afternoon to retrain all baristas
Case Study Presentation by: Brandon J. Murray 16
Business Process Improvement
! Starbucks makes operational changes to their brewing stations and coffee bean “default roast” selections.
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Starbucks gets back to its roots…
! “ round, smooth, and balanced…a mild, sweet finish. ”
- Howard Schultz, describing his ‘Consistent Brew 19’ (renamed to Pike Place Roast)
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Moving business “away from the store”
! Starbucks produces an instant coffee ! Starbucks produces a single-serve pod coffee ! Starbucks applies VIA technology to sell shelf-
stable Frappuccino, ice-cream, and even beer
“Never be without great coffee” – Howard Schultz, slogan on VIA
“faster, easier, and doesn’t force the entire household to drink the same thing in the morning.” – Howard Schultz, on single-serve Pods
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! Seattle's Best Coffee ! 15th Avenue Coffee and Tea ! Roy Street Coffee and Tea
Starbucks pursues coffee initiatives outside of their own brand
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Manufacturing Brewing Equipment • What is a Clover coffee machine?
! An $11,000 USD coffee machine which makes a superior brew by controlling dose, brewing temperature, and brew time.
• What benefits did Mr. Schultz see with the Clover? 1) Produces superior cup of coffee 2) Offered customers “theater & romance” 3) Makes a single cup at a time, allowing to brew from smaller batches of specialty beans
“Frankly, we just don’t want anyone else to have it.” -‐ Michelle Gass, SBUX execu3ve in response to Clover acquisi3on
Case Study Presentation by: Brandon J. Murray 22
My “Starbucks Experience”
• Starbucks, with CEO Howard Schultz at the helm, has been an inspiration for regular coffee consumers like me - - all the way to national and global business leaders alike.
• I have enjoyed this Starbucks Case Study project immensely!
Case Study Presentation by: Brandon J. Murray 23
QUESTIONS? THANK YOU…
1) For your time, 2) For this opportunity to analyze a fascinating business case, and of course 3) For considering me for your graduate programme.
Case Study Presentation by: Brandon J. Murray 25
Company Timeline: Howard Schultz & Starbucks
! 1981: Howard Schultz visits the company that's buying so many drip coffeemakers from the Swedish company he represents and falls in love with it.
! 1982: He becomes Starbucks' director of retail operations and marketing. ! 1983: He travels to Milan ! 1985: He founds Il Giornale ! 1987: Leads a group of investors to buy Starbucks when it had fewer than 20 stores and
plans to open 125 new stores in five years. ! 1992: Takes the company public (IPO). Starbucks ends fiscal year with 165 stores. ! 1996: Begins selling bottled Frappuccino drinks ! 2000: Steps down as CEO, a title that goes to Orin Smith. Schultz remains chairman. Ends
fiscal year with 3,501 stores. ! 2003: Acquires Seattle’s Best Coffee Company ! 2005: Smith retires and is replaced by Jim Donald. Starbucks ends fiscal year with 10,241
stores. ! 2008: Schultz reclaims CEO position and Donald leaves the company. More than 15,000
stores worldwide. Starbucks acquires Clover Brewing System. Launches Pike Place Roast. ! 2009: Launches Starbucks VIA Ready Brew Coffee ! 2011: Launches Starbucks K-Cups portion packs – Green Mountain Coffee Roasters ! 2012: Total Stores = 17,651 (as of July 01, 2012)