Starbucks Justin Kefal Alison Altomari Nicole OKeefe Diane

Starbucks Justin Kefal Alison Altomari Nicole O’Keefe Diane Ketler Karen Lau Nicholas Herman

Introduction • Started 1971 • Gerlad Baldwin, Gordon Bowker, Ziev Siegel • Original located in Seattle, Pike Place Market • Original concept was to bring Espresso bar to America • “A third place”

Reasons for Unsatisfied Customers • Focus on global expansion – Starbucks went public in 1992 - raised $25 million – Worldwide - Opening 3 stores daily on average – Optimistic growth plan - Own 10, 000 stores USA • Focus on product Innovation – – One half day VS. 16 days working 8 hr shifts Clientele is changing with menu Increase of customization “Just Say Yes”

Since the beginning… • One store: whole coffee beans • Transitioned to selling coffee drinks • NOW: – Went public in 1992, opened 140 stores – 5000+ stores, 20 million customers – Extensive drink menu – Starbucks outside the coffee shop

Competition • Big Coffee Stores: – Gloria Jeans – Caribou Coffee – Dunkin’ Donuts • Small, Independent Shops – More intimate/personalized – More potential product mix

Demand • 109 million daily coffee drinkers • 52 million on-occasion coffee drinkers • 1/3 coffee consumption outside the home • $21. 5 billion total coffee market – Starbucks share – 42%

Consumers and the Ideal Customer • Changing clientele – new demographics – Younger, less well-educated, lower incomes • Highly satisfied customers = most profitable customers • Key factors for customer satisfaction – Clean stores and friendly/attentive staff

Solutions • Starbucks’ Proposal: Invest 40 million annually in the company’s 4, 500 stores, which would allow 20 additional labor hours a week/per store. • Our Proposal: Do invest the 40 million annually, but do not use every store. Research those stores with higher volumes and invest in those.

Solutions • Add “bar-back” type employee • Offer discounts and incentive offers • Better rotation schedule to help prevent sluggish employees

Evaluating the Solutions • We will continue evaluating the effectiveness of our plan by having monthly check-ups to determine customer satisfaction • Keep checking sales with respect to customer satisfaction to make sure both stay positive • Continue the Mystery Shopper Program

Post-situation • July 1 st , 2008 – decision to close 600 stores nationwide, expected to close within the next year • Starbucks Value Card • Iced Brewed Coffee Card