Starbucks

Corporation
Presented by :
Ashok Lahoty
Sec: D
 Outline
Introduction of Starbucks
Presentation
The company background
Market competition
The Growth segment
Starbucks Experience
Bean stock plan
Leveraging the brand
Expansion into ASIAN Countries
Entry into JAPAN


 Introduction to Starbucks
Company started in 1971 in seattle,
Washington

Grew from 55 stores in 1989 to over 2200
stores today

Products sold include:

- Beverages - Pastries
- Whole coffee - Coffee-related
retail items
- beans
The Company
Background
In 1971 three Seattle entrepreneurs—Jerry Baldwin,
Zev Siegl, and Gordon Bowker—started selling
whole-bean coffee in Seattle's Pike Place Market.


In 1982 Howard Schultz has joined Starbucks as

manager of retail sales and marketing.


For a history of the coffeehouse, There are 200,000

coffee bars in Italy, and about 1500 in Milan
alone.


In 1989 to 1990 company lost $1.2 million as

overhead expansion.


In 1996 company employs 16600

individuals,include 15000 in retail and regional
ofices.
in 1991, net revenues increased at a compounded
annual growth rate of 61 percent as $696 million.
Market Competition
Germany and Japan are best coffee
consumer.


Starbucks has started explore the strategy

in asian countries.


In 1962 on an average consumption 3.1

coffee per day.


Which was in 1980 bottoming out at an

average consumption of 1.8 cups per day.



The Growth
Segment
SCCA predicts in 1999 that coffee will capture
about 30% of the market of retail sales of $5
Billion.

The numbers of Bars Grow 10000 up in 1999 from
4500 in 1994 and 1000 in 1989.

Retail sales volume Grew from 1969 as $45 million
to $ 2.0 Billion in 1969.

There are app. 35 million coffee drinkers in US only.


Some analysts attribute the explosive growth in

specialty coffees to the poor economy.


growth: Year 1992 1993 1994 1995
1996 1997


Total stores 165 272 425 676 1006

1381


Total stores 65% 56% 59% 49% 37%

change


Revenue 103K 176K 284K 465K 696K

966K


Revenue change 71% 61% 64% 50% 39%


 Starbucks
Experiance
According to Schultz, "We're not just selling a
cup of coffee, we are providing an
experience.“
people who prepare the coffee are referred to
as "baristas,“ now they referred to starbucks.
The stores range from 200 to 4,000 square
feet,with new units tending to range from
1,500 to 1,700 square feet.
In 1995, the average cost of opening a new
unit was about $377,000. The firm employs a
staff of over 100 people for plan, design and
build the unique interiors.
The company manage customer service has
seven hrs daily.
Company also provide their employee to health
care service around $150 per month.

Bean stock plan
Employee turnover is also discouraged by
Starbucks' stock option plan known as the
Bean Stock Plan.


It is implemented in angust 1991 by starbucks

to offer stock option unilaterally to all
employees.


This plan gettting an exemption from the

security commission.


In 1995 company demonstrated employee

welfare so human group of coffee pickers can
receive less than $3 a day.
Starbucks became the first agricultural
commodity importer to implement a code for
minimal working conditions and pay for
Leveraging the
Brand
Besides coffee bars starbucks has set up
cafes and carts in hospitals, banks, office
buildings, supermarkets and shopping
centers.
In 1992 company deal with nordstrom to
serve coffee in all stores.It operate 62
restaurants and 48 espresso bars.
In 1995 company also sign another deal
with UA to provide coffee to 75 million
passengers in a year.
They also launched a line of packaged teas
in response to growing demand of tea.
An agreement with pepsico brought bottle
version of starbucks coffee.

Expansion into asian
countries
After getting growth policy in the
international expansion as 307
stores in 1996 and 2000 in 2000,
in new markets in North America
including Phoenix, Arizona, and
Miami, Florida.company plan
invested in asian market
compare of Europe.
Company invested $1.5 million
for international subsdiary of 12
managers developing various
attribute.
Entry into JAPAN
In October 1995, Starbucks entered into a
joint venture with a Tokyo-based Sazaby .
Japan is world’s 3rd largest coffee consumer
having 115143 coffee shops.
Pronto Corp., is Japan’s second largest
coffee-bar chain opened in 1987 .
Company opened 12 stores in japan in end
of 1997 as 250 million yen in capitalization
in equally shares.
With sazaby assistance firm opened 2
stores in Tokyo for japanese customer
attraction which offer beverages snacks
etc.

Conclusion / Questi
ons :