Starbucks The Starbucks Logo The idea of the

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 ØHoward Schultz joins Starbucks as Dir. of Retail ØSchultz founded II Giomale offering brewed coffee & espresso beverages Ø 84 w/ Starbucks coffee Starbucks locations beans 1982 1971 Ø 1 st Starbucks location in Seattle 1985 1984 ØSchultz tests new coffee bar concept Ø 676 Starbucks locations & Starbucks Intl formed 1990 1987 ØII Giomale acquires Starbucks assets ØChanges name to Starbucks Corp. 1995 1993 Ø 272 Starbucks locations Ø 2, 292 Starbucks locations 2000 1998 Ø 1, 886 Starbucks locations ØJoint venture w/ Magic Johnson ØLaunch Starbucks. com 2003 Ø 6, 604 Starbucks locations ØAcquired Seattle’s Best Coffee Co.

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

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 85% 15%

FY 2002 Net Revenues Millions Ø 123 consecutive months of positive comparable store sales growth Ø 11 consecutive fiscal years of comparable store sales growth of 5% or more ØRevenue growth of 24% in Fiscal Year 2002 ØNet Earnings of $2151 million

Starbucks Vs. Top Competitors Annual Revenue FY 2002 Millions Source: Hoover's Online Services

FY 2002 Specialty Operations % Revenue By Business Unit 27% 18% 17% 13% 7% 5%

FY 2002 % Retail Sales Mix by Product Type 77% 13% 6% 4%

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

Starbuck’s Snapshot Store #: Date: Basic Score: Store: Time: Legendary Service: