Beruflich Dokumente
Kultur Dokumente
48
. According to some
reports, the company also planned to bring about drastic changes in its menu by the year end. I
have been embarrassed by the food. The food is going to be completely reinvented by fall,
Schultz said. Also, Starbucks would experiment with new store designs and layouts.
Despite concerns that smells of hot food interfered with the coffee aroma, Starbucks announced
the launch of five new breakfast items in September 2008. The items included oatmeal, a chewy
fruit and nut bar, apple bran muffin, a multigrain pastry called the Berry Stella, a multigrain roll
and a protein plate featuring a hardboiled egg, whole wheat bagel, peanut butter, cheese and fruit.
According to the company, the items did not contain artificial preservatives, colors, or sweeteners.
Although analysts appreciated Schultzs moves to revive the Starbucks brand, some critics were
not sure if these efforts would be enough to bring customers back to the stores. Also, according to
Jeffrey Sonnenfeld (Sonnenfeld), a professor at Yale School of Management, Schultzs greatest
successes had come with Smith who kept Schultz on course. He felt that in Smiths absence,
Schultzs impulsive and emotional nature might prevail. Sonnenfeld said, He has to break the
romantic attachment to the past. For Howard, its a painful unlearning, and thats what were
seeing now.
49
45
www.finance.yahoo.com.
46
http://cnbcmedia1.orchistra.net.
47
Nutrition based on 16 fluid ounces.
48
Starbucks Launches Vivanno Nourishing Blends, www.starbucks.com, July 14, 2008.
49
David Margolick, Tall Order, www.portfolio.com, July 2008.
Starbucks: Back to Basics?
10
Exhibit I
Starbucks Logos Old and New
Source: www.answers.com and www.silverspringdowntown.com
Exhibit II
Starbucks International Presence*
Country/Region Type of entry Name of the local
partner/company
Year of
Entry
Canada Wholly-owned subsidiary Starbucks Coffee Canada 1987
Japan Joint Venture Sazaby Inc 1996
Singapore Wholly-owned subsidiary
#
Starbucks Coffee Singapore 1996
Philippines Licensee Rustans Coffee Corp 1997
UK Wholly-owned subsidiary Starbucks Coffee UK 1998
Malaysia Licensee Berajaya Group bhd 1998
New Zealand Licensee Restaurant Brands 1998
Taiwan Joint Venture President Chain Store Corp. 1998
Thailand Licensee Coffee Partners Co., Ltd., 1998
Kuwait Licensee M.H. Alshaya Co., W.L.L. 1999
Lebanon Licensee M.H. Alshaya Co., W.L.L. 1999
South Korea Joint Venture Shinsegae Department
Store Co., Ltd.
1999
Starbucks: Back to Basics?
11
Country/Region Type of entry Name of the local
partner/company
Year of
Entry
China (Beijing) Licensee Mei Da Coffee Co., Ltd. 1999
Hong Kong Joint Venture Maxims Caterers Ltd 2000
China (Shanghai) Joint Venture President (Coffee) Cayman
Holdings, Ltd.
2000
Australia Joint Venture Markus Hofer 2000
The UAE Licensee M.H. Alshaya Co., W.L.L 2000
Qatar Licensee M.H. Alshaya Co., W.L.L. 2000
Saudi Arabia Licensee M.H. Alshaya Co., W.L.L. 2000
Bahrain Licensee M.H. Alshaya Co., W.L.L. 2000
Israel Joint Venture Delek Corporation** 2001
Austria Licensee Bon Appetite Group** 2001
Switzerland Licensee Bon Appetite Group** 2001
Germany Joint Venture KarstadtQualle AG 2002
Greece Joint Venture Marinopoulos Brothers 2002
Mexico Joint Venture SC de Mexico 2002
Indonesia Joint Venture PT Mitra A diperkasa 2002
Puerto Rico Joint Venture Puerto Rico Coffee Partners 2002
Spain Joint Venture Grupo Vips 2002
Oman Licensee M.H. Alshaya Co., W.L.L. 2002
Cyprus Joint Venture Marinopoulos Brothers S
A,
2003
Turkey Licensee Shaya Kahve Saniye Ve
Ticaret
2003
Peru Joint Venture Delosi SA 2003
Chile Joint Venture Grain Red SA 2003
France Joint Venture Grupo Vips 2004
Jordan Licensee M.H. Alshaya Co., W.L.L. 2005
Ireland Wholly-owned Subsidiary Starbucks Coffee Ireland 2005
Bahamas Licensee Coffee Cay Ltd. 2005
Brazil Joint Venture Alsea S.A. de C.V. 2006
Egypt Licensee Alshaya Egypt LLC 2006
Denmark 2007
Romania Joint Venture Marinopoulos Holding 2007
Russia Licensee M.H. Alshaya Co., W.L.L. 2007
Starbucks: Back to Basics?
12
Country/Region Type of entry Name of the local
partner/company
Year of
Entry
Argentina Joint Venture Alsea S.A. de C.V. 2008
Belgium Joint Venture Autogrill 2008
The Netherlands Licensee Servex 2008
The Czech Republic Joint Venture AmRest Holdings NV 2008
# since 2004
* This list is not exhaustive
** Starbucks closed its operations in Israel and bought out the stakes of its partners in Austria and
Switzerland in 2003.
Compiled from various sources.
Starbucks: Back to Basics?
13
Exhibit III
A. International Coffee Prices in US Cents per LB
Annual
Average
ICO
Composite*
Columbian
Mild
Other Mild
Arabicas
Brazilian
Naturals
Robustas
2001 45.59 72.05 62.28 50.7 27.54
2002 47.74 64.90 61.52 45.23 30.01
2003 51.90 65.33 64.20 50.31 36.95
2004 62.15 81.44 80.47 68.97 35.99
2005 89.36 115.73 114.86 102.29 50.55
2006 95.75 116.80 114.40 103.92 67.55
2007 107.68 125.57 123.55 111.79 86.60
July 2008 132.78 151.18 147.36 134.88 115.23
August
2008
131.44 151.03 146.43 133.28 112.56
September
2008
126.69 148.36 143.27 130.26 105.38
*International Coffee Organization (ICO) Composite is determined by weighting different coffee varieties
according to their market shares
Source: www.ico.org.
B. Reduced Fat (2%)
#
Milk* Prices in the US
Month/Year Price* in US Dollars
per Gallon
2006^ 3.10
2007^ 3.51
January 2008 3.74
February 2008 3.72
March 2008 3.69
April 2008 3.67
May 2008 3.67
June 2008 3.70
July 2008 3.84
August 2008 3.83
# In May 2007, Starbucks switched from whole to reduced fat (2%) milk as the default option in all its North
American stores
*Simple average of 30 cities
^ Average of 12 months
Source: www.ams.usda.gov
Starbucks: Back to Basics?
14
Exhibit IV
The Starbucks Experience
The Starbucks Experience involves three aspects people, place, and product.
Starbucks tried to establish a connection between the baristas and the customers. Apart from
operational skills, the baristas were trained in Star Skills three guidelines for on-the-job
interpersonal skills -- maintain and enhance self-esteem; listen and acknowledge; and ask for
help. Employees in general were asked to be helpful and just say yes.
Each Starbucks store acted as a billboard for the company, helping in building the brand as
well as the corporate image. All efforts were made to ensure that each store was inviting, and
stimulating. Store fixtures, merchandise displays, colors, artwork, and music were carefully
chosen to reflect the personality of the neighborhood. Starbucks did not allow smoking inside its
stores as it would affect the aroma of the coffee.
Starbucks was obsessed with quality, with purchasers and tasters carefully choosing coffee
beans from all corners of the world. It had elevated the process of roasting to an art form.
Employees were trained to follow strict rules, and had to discard an entire lot if the roasted
beans didnt measure up to prescribed standards.
However, with time and rapid expansion, Starbucks changed. With the installation of automatic
machines to improve efficiency, the customer could no longer see the drink being made and thus
there was little or no interaction between the baristas and the customer. More and more
customers complained that Starbucks had become impersonal. Also, to cut costs and enhance
efficiency, Starbucks made changes to its store layout and ambience. This did not go down well
with some customers who felt that the stores were sterile, and cookie-cutter. Also, by
selling hot food and other food stuff, the coffee aroma got diluted.
Source: Arthur A Thompson and John E. Gamble, Starbucks Corporation, www.mhhe.com and other
sources
Exhibit V
Starbucks Retail Sales Mix
Fiscal Year Ended 2004-2005 2005-2006 2006-2007
Beverages 77% 77% 75%
Food 15 15 17
Coffee making equipment
and other merchandise
4 5 5
Whole bean coffee 4 3 3
Source: www.starbucks.com.
Starbucks: Back to Basics?
15
Exhibit VI
Starbucks Financial Highlights
1996 1997 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007
No. of stores at fiscal year end
(International stores)
1,015
(11)
1,412
(48)
1,886
(131)
2,498
(281)
3,501
(792)
4,709
(1,234)
5,866
(1,644)
7,225
(2,024)
8,569
(2,392)
10,241
(2,888)
12,440
(3,544)
15,011
(4,327)
Net revenues (USD bn) 0.7 0.98 1.31 1.68 2.2 2.6 3.3 4.1 5.3 6.4 7.8 9.4
Operating income (USD mn)
(Operating margin %)
56.6 86.2 109.2 156.7 212.2 280.2 316.3 424.7 606
(11.5)
781
(12.3)
894
(11.5)
1,054
(11.2)
Comparable store sales growth 7% 5% 5% 6% 9% 5% 6% 8% 10% 8% 7% 5%
Net Earnings (USD mn)
(Return on Equity %)
42 55 68 102 94.5 180.3 212.7 268.3 391.8
(17%)
494
(20%)
564
(25%)
673
(29%)
Source: www.starbucks.com.
Starbucks: Back to Basics?
16
Exhibit VII
Starbucks Stock Price (in US$) between 1999 and 2008
Volume
Source: www.starbucks.com
Starbucks: Back to Basics?
17
References & Suggested Readings:
1. Matt Andrejczak, Starbucks Ramps up Food Menu, Including New Egg Sandwich,
www.marketwatch.com, September 23, 2008.
2. Oatmeal becomes Starbucks Top-Selling Food, www.foxnews.com, September 23,
2008.
3. Starbucks to Open New Stores in Indonesia, Says Executive, www.drinks-business-
review.com, September 10, 2008.
4. Starbucks Expands Breakfast Menu, www.silobreaker.com, September 03, 2008.
5. Louise Dransfield, Starbucks Chokes on its Latte, http://www.independent.co.uk,
August 01, 2008.
6. Arthur A. Thompson, John E. Gamble Starbucks Corporation, A Case Study,
http://www.mhhe.com, retrieved on August 20, 2008.
7. Paul R. La Monica, Wishing on a Fallen Starbucks, http://money.cnn.com, July 30,
2008.
8. Andrea James, Starbucks Posts First Quarterly Loss, Ever,
http://seattlepi.nwsource.com, July 30, 2008.
9. Starbucks Launches Vivanno Nourishing Blends, www.starbucks.com, July 14,
2008.
10. David Margolick, Tall Order, www.portfolio.com, July 2008.
11. Starbucks Dumping CDs, www.alleyinsider.com, June 25, 2008.
12. Starbucks Needs a Shot of Caffeine, www.money.cnn.com, June 08, 2007.
13. Lisa Jennings, Starbucks Scales Back New Stores, Expects New Drinks to Perk up
Traffic, http://findarticles.com, May 12, 2008.
14. Richard H. Levey, A Slip between Cup and Lip, http://directmag.com, May 01, 2008.
15. Laurie J. Flynn, Starbucks Says Weak Economy behind Earnings Decline,
www.iht.com, May 01, 2008.
16. Lisa Baertlein and Nichola Groom, Starbucks off the Boil amid US Downturn,
www.brisbanetimes.com, April 25, 2008.
17. Starbucks Plans China Expansion, 80 New Stores to Open in 2008, www.china-
briefing.com, April 22, 2008.
18. Amit Chowdhry, MyStarbucksIdea.com, A Consortium of Ideas for Starbucks to
Implement Gains Traction, http:pulse2.com, April 10, 2008.
19. Brad Stone, Starbucks Plans Return to Its Roots, www.nytimes.com, March 20,
2008.
20. Starbucks Unveiled New Strategic Initiatives to Transform and Innovate the
Customer Experience, www.starbucks.com, March 19, 2008.
21. Conservation International and Starbucks Launch Initiative,
www.conservation.org, March 19, 2008.
22. Coffee Break for Starbucks 135,000 Baristas, www.cnnmoney.com, February 26,
2008.
Starbucks: Back to Basics?
18
23. Starbucks to Close Stores and End Sandwich Sales in North America,
www.iht.com, January 31, 2008.
24. Starbucks Announces Strategic Initiatives to Increase Shareholder Value;
Chairman Howard Returns as CEO, www.starbucks.com. January 07, 2008.
25. Starbucks Expands in Europe, http://business.techwhack.com, December 19, 2007.
26. Starbucks Chairman Warns of the Commoditization of the Starbucks
Experience, http://starbucksgossip.typepad.com, February 23, 2007.
27. Joseph Michelli, The Starbucks Experience: 5 Principles for turning Ordinary into
Extraordinary, 2007.
28. Howard Behar, Its Not about the Coffee: Leadership Principles from a Life at
Starbucks, 2007.
29. Starbucks Thrives on Consumer Coffee Habit, http://www.beveragedaily.com,
November, 2005.
30. Starbucks Expands Partnership with Conservation International and Supports
Innovative Verde Ventures Loan Fund, www.celb.org, January 22, 2004.
31. Starbucks Expands Reach of Unique Coffee Experience to Southern China with
Opening of First Store in Guangzhou; Entrance into Guangzhou Builds on Starbucks
Expansion Plans in China, http:goliath.ecnext.com, August 29, 2003.
32. Yardena Arar, Starbucks Expands Wireless Internet Offering,
http://pcworld.about.com, August 21, 2002.
33. Starbucks Expands its Line of Superpremium Ice Cream Offerings with Six New
Flavors, www.allbusiness.com, 1999.
34. Randy Wilson, Starbucks Coffee History, http://ezinearticles.com.
35. Starbucks Corporation, www.answers.com.
36. www.starbucks.com
37. www.finance.yahoo.com.
38. http://cnbcmedia1.orchistra.net.