A Story of Growth

Case Study Presentation by:

Brandon J. Murray

Starbucks Mission
THEN

NOW

establish Starbucks as

to inspire and nurture

the premier purveyor of the

finest coffee in the world
while maintaining our
uncompromising principles
as we grow

the human spirit

one person, one cup and
one neighborhood at a

Case Study Presentation by:

Brandon J. Murray

time.

Case Study Presentation by:

Brandon J. Murray

U.S. Coffee Consumption in a major slump!

Starbucks Founded
Howard Schultz
acquires Starbucks

Case Study Presentation by:

Brandon J. Murray

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

We should sell

prepared
coffee drinks
like the Italians
are doing!!

Case Study Presentation by:

Brandon J. Murray

We love roasting
and selling beans
...not interested in
selling prepared
drinks.

Mr. Schultz leaves Starbucks!

Case Study Presentation by:

Brandon J. Murray

Mr. Schultz buys Starbucks!

Now I think I
WILL make & sell
those prepared
coffee drinks!!

Case Study Presentation by:

Brandon J. Murray

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

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

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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

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Starbucks Retail Expansion

1996

1,015 Stores

2001

4,709 Stores

2007

15,011 Stores

Case Study Presentation by:

Brandon J. Murray

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Competitor Latte Prices

Starbucks

Case Study Presentation by:

Brandon J. Murray

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Im back.

Schultz
Returns
as CEO

Case Study Presentation by:

Brandon J. Murray

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

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Business
Process
Improvement
! Starbucks makes operational changes
to their brewing stations and coffee
bean default roast selections.
Case Study Presentation by:
Brandon J. Murray

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Starbucks gets back to its roots

! round,
smooth, and
balanceda
mild, sweet
finish.
- Howard Schultz, describing his Consistent
Brew 19 (renamed to Pike Place Roast)

Case Study Presentation by:

Brandon J. Murray

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Case Study Presentation by:

Brandon J. Murray

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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 shelfstable Frappuccino, ice-cream, and even beer

Never be
without great
coffee

faster, easier, and

doesnt force the
entire household to
drink the same thing
in the morning.

Howard Schultz, slogan on VIA

Howard Schultz, on single-serve Pods

Case Study Presentation by:

Brandon J. Murray

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Starbucks pursues coee initiatives

outside of their own brand

! Seattle's Best Coffee

! 15th Avenue Coffee and Tea
! Roy Street Coffee and Tea

Case Study Presentation by:

Brandon J. Murray

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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 dont want anyone else to have it.

- Michelle Gass, SBUX execu3ve in response to Clover acquisi3on

Case Study Presentation by:

Brandon J. Murray

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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

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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

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[ Backup Slide ]

Case Study Presentation by:

Brandon J. Murray

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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 Seattles 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)

Case Study Presentation by:

Brandon J. Murray

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