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 Dreyers 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 employee
managament.
Current Locations
Licensed stores:
S tore 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 Ea st/Afri ca
Ne t store s Store s ope n
Ja pa n 534 Ge rm a n y 35 Un i te d S ta te s 1839
o pe ne d a s of Oct. 3 ,
C h in a 152 S a udi Ara bi a 32 Ca 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
S outh 102 S pa i n 27 Me xi co 32 Uni te d Sta te s 514 4 293
Kore a
Ph i li ppi ne s 70 Kuwa i t 27 Ch i le 9 I nte rna ti ona l:
Ma la ysi a 52 Gree ce 25 Pue rto Ri co 6
Ne w 36 S wi tzerla n d 18 Pe ru 3 Uni te d Ki ng dom 49 422
Ze a la n d Ca nada 56 372
I n done si a 24 T urke y 15 T hai 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 nte rna ti ona l
Fra n ce 4 T ota l Com pa ny- 634 5 215
Om a n 3 o pe rate d
Cyprus 2
T ota l 1 106 248 2000
IT IS A PLAN OF ACTION .
STRATEGY MAKING &
STRATEGY EXECUTING PROCESS
1987 3,30,000$
1988 7,64,000$
1989 1.2$ BILLION
1990 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 companys 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
1. THE CURRENT RATIOS SHOWS THE COMPANYS ABILITY
TO PAY DEBT IN SHORT TERM & IS GOING TO BE IDLE
ONE WHICH IS 2:1 .
2. THE CURRENT RATIO SUGGESTS THAT THE COMPANY IS
FINANCIALLY VERY SOUND AS THE ASSET RATIO IS
FAVOURABLE FOR THE COMPANY .
3. THE COMPANY IS UTILIZING THE CURRENT ASSET
PROPERLY .
FIX ASSETS
AS FAR AS TOTAL ASSETS ARE CONCERN COMPANYS FIXED
ASSETS ARE ALSO INCREASED AS THERE IS INCREASED IN
STAR BUCK OUTLETS .
For Shareholders
For Customers