Professional Documents
Culture Documents
60
50
40
% of Sales
30
20
10
0
1983 1988 1993 1998
Coffee Drinking Trends
- Retail Stores
- Specialty Sales
UAL PriceCostco
Nordstrom Red Hook Breweries
Barnes & Nobles Dreyer’s Ice Cream
Pepsi Co. (Frappuccino, ARAMARK
etc.)
- Merchandising
- Mail Order
Schultz and Starbucks
Schultz mainly focused on the expantion of
starbucks outside seattle.
He joined strbucks in the four stores in seattle
working behind the counters , tasting different
kinds of coffees, talking with the customers ,
getting to store personel, and learning the
retail aspects of the coffee business.
Become CEO of the company and turn around
the entire scenario of doing business of
starbucks.
Mainly focused in expansion plans and
Current Locations
Licensed stores:
Store s ope n a s of Oct. 3, 2 004
Asi a Pa ci fi c Euro pe / Am eri ca s Company-operated stores:
Mi ddle East/Afri ca
N e t store s Store s ope n
Ja pa n 534 Ge rm an y 35 Uni te d Sta te s 1839
o pe ne d a s of Oct. 3 ,
C h in a 152 Sa udi Ara bi a 32 C a na da 66 duri ng fi sca l 2004
T ai wa n 136 UA E 31 Ha wa i i 45 ye a r 2004
South 102 Spa i n 27 Me xi co 32 Uni te d State s 514 4 293
Kore a
Phi li ppi ne s 70 Kuwa i t 27 C hi le 9 I n te rn a ti on a l:
Ma l a ys i a 52 Gree ce 25 Pue rto Ri co 6
Ne w 36 Swi tzerla nd 18 Pe ru 3 Uni te d Ki ng dom 49 422
Ze a la n d C a na da 56 372
I n don e si a 24 T urke y 15 T h ai land 11 49
Le ba non 10 A u s tr a l i a 4 44
A u s tr i a 8 Si nga pore - 35
Qa ta r 6 T ota l 120 922
Ba hra i n 5 I n te rn a ti on a l
Fra n ce 4 T ota l C om pa ny- 634 5 215
Om a n 3 o pe ra te d
Cyprus 2
T ota l 1 106 248 2000
IT IS A PLAN OF ACTION .
STRATEGY MAKING &
STRATEGY EXECUTING PROCESS
3 3.9$ MILLION
4 13.5$ MILLION
5 15 $ MILLION
THEY WERE COMMITING LOSSES .
3 3,30,000$
4 7,64,000$
5 1.2$ BILLION
6 ONWARD THEY BECOME PROFITABLE
VALID REASONS BEHIND
LOSSES GIVEN BY HOWARD
WE HAVE TO ATTRACT A MANAGEMENT
TEAM WELL BEYOND OUR EXPANSION
NEEDS .
WE HAVE TO BUILD WORLD CLASS
ROASTING FACILITY .
WE NEED COMPUTER INFORMATION
SYSTEM SOPHISTICATED ENOUGH TO
KEEP TRACK OF SALES IN HUNDREDS
AND HUNDREDS OF STORES .
STEP - 5
YEAR
DUE TO ALL THIS SKILLS AND IDEAS THE WAY IN WHICH HE HAD
EXECUTED THE STRATEGY AND MADE STARBUCK PROFITABLE
Present Stately
Que-4 has starbucks strategy evolved as the
strategic vision has evolved?
Que-5 what are the key policies practices and
procedures that underline how howard schultz and
strategic mgt have implemented and executed the
chosen strategy?
On becoming the CEO of the company the vision of the starbucks was
to make it a national company with guiding principles that employees
could be proud of .
Schultz restored the old and honest employees of starbucks to give the
best service to the customers.
Dave Lawrence was hired as a executive vice presented and charged
with leading operation, finance and human resources.
New logo was invented to match the culture of the starbucks and
Giornale.
New espresso machines were equipped and look more Italian than old
world nautical
Chicago store opened in October 1987 as per expansion strategy
Identifying inability of the customers for having a cup of coffee in the
winter season in Chicago, schultz solved the problem of freshness and
quality assurance by putting freshly roasted beans in special flavor
lock bags that used vacuum packaging technique.
Portland, oregon was the next market the cmpany entred.
Entered in L.A in late 1991.
Opened 15 new stores in 1988, 20 in 1989, 30 in 1990, and 53 in 1992,
producing a total of 161 stores in US.
Also went for franchising concept to retrieve the cost for new store
expansion.
In order to make starbucks a great place to work schultz accepted to
expand healthcare coverage to include part-time workers.
To oversee the expansion process starbucks created zone wise vice
presidents to direct the development of each region and to implant
the starbucks culture in the newly opened stores.
Starbucks had created a new subsidiary, starbucks coffee
international, to orchestrate overseas expansion and build the
starbucks brand name globally via license.
To accommodate its strategy of rapid store expansion, starbucks put in
systems to recruit, hire and train baristas and store managers.
In august 2002 starbucks teamed up with T-mobile USA, the largest
carrier-owned Wi-Fi services, to experiment with providing internet
access and enhanced digital entertainment to patrons at over 1200
starbucks locations.
Que-6 what is your assessment of starbucks financial
performance during fiscal years 1998-03. Does the
company’s performance indicate that starbucks
strategy is working well?
SOME FINDINGS & SUGGESTIONS
GROWTH IN TOTAL NET REVENVUE
SHOWS GROWTH OF 25.51% EVERY
YEAR.
TOTAL NET REVENUE
4500000
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
1998 1999 2000 2001 2002 2003
YEARS
GROWTH IN OPERATING INCOME
SHOWS GROWTH OF 31.21%
OPERATING INCOME
450000
400000
350000
300000
250000
200000
150000
100000
50000
0
1998 1999 2000 2001 2002 2003
YEAR
CURRENT RATIOS FOR THE YEAR 1998 -2003
YEAR RATIO
1998 1.52 :1
1999 1.67 :1
2000 1.33 :1
2001 1.47 :1
2002 1.54 :1
2003 1.90 :1
CURRENT RATIOS
• THE CURRENT RATIOS SHOWS THE COMPANY’S
ABILITY TO PAY DEBT IN SHORT TERM & IS GOING
TO BE IDLE ONE WHICH IS 2:1 .
• THE CURRENT RATIO SUGGESTS THAT THE COMPANY
IS FINANCIALLY VERY SOUND AS THE ASSET RATIO
IS FAVOURABLE FOR THE COMPANY .
• THE COMPANY IS UTILIZING THE CURRENT ASSET
PROPERLY .
FIX ASSETS
AS FAR AS TOTAL ASSETS ARE CONCERN COMPANY’S
FIXED ASSETS ARE ALSO INCREASED AS THERE IS
INCREASED IN STAR BUCK OUTLETS .
• For Shareholders
• For Customers