Alli Meurer
Sarah Merritt
Samantha LaChance
Lin Lin Chen
“Our mission is to
inspire and
nurture the
human spirit-one
person, one cup,
and one
neighborhood at
a time.”
 The company name
 Starbuck, Captain Ahab’s first mate
(Moby Dick)
 First store
 Pike Place Market
 2 Seattle teachers and
a writer
 Started in 1971 in Seattle, WA
 Initial public offering
 Listed on NASDAQ in 1992
 First international store (Japan) in 1996
 Now 7,000,000 shareholders
 Global presence
 More than 16,785 stores worldwide
 49 international markets
 160,000 employees
•The logo
- 16th century Norse woodcut
•Mermaid or siren reflects seafaring
origins of the early coffee traders
 Key Operations
 Purchasing, roasting and selling of
whole bean coffees worldwide
 Offerings
 Brewed Coffees
 Italian-style espresso beverages
 Cold blended beverages
 Complimentary food items
 Premium teas
 Beverage-related accessories and
equipment
 Producing and Selling
 Ready-to-drink beverages
 Bottled beverages
 Espresso drinks
 Chilled cup coffees
 Ice creams
 Brand Portfolio
 Seattle’s Best Coffee
 Tazo
 Frappuccino
 Starbucks DoubleShot
 Starbucks Discoveries
 Starbucks super-premium
Tazo Tea
 Starbucks super-premium
 Mr. Howard D. Schultz
 Founder, Chairman, Chief Executive
Officer and President
 Mr. Troy Alstead
 Chief Administrative Officer, Chief
Financial Officer and Executive Vice
President
 Mr. Arthur I. Rubinfeld
 President of Global
Development
 Mr. Clifford Burrows
 President of Starbucks
Coffee United States
 Mr. Jinlong Wang
 Chairman of Starbucks
Coffee Greater China and
Senior Vice President of
Business Development–
Starbucks Coffee
International
 First in family to graduate from
college
 Bachelor’s in Communications
 Seattle SuperSonics
 Salesperson for Xerox, then
general manager for
Hammarplast
 Joined as Director of Marketing
 1971: Starbucks opens first store
 1982: Howard Schultz joins Starbucks
 1984: Howard convinced founders to
test the ‘coffeehouse’ concept
 1996: Domestic market saturated,
entered international market
 Young college students
 Higher than average income
 Neighborhoods and social classes
 Willingness to pay for luxury
 Almost every demographic
 Anyone who can afford
 Marketing mix-4Ps
 Product
 Product innovation
 Good quality coffee
beans
 New product
introductions
 Every season
 Price
 Position
themselves
according
to quality
 Place
 Urban cities with
popular locations
 Near large
companies
 Promotion
 Wireless Network
 Store delivery
service
 Exchange
accompanying
card bonus points
Product
People
Physical
Environment
Price
Marketing
Mix
Place
Process
Promotion
Product
People
 Process
 Fresh made right
after the order
 Allow customers
to see the making
order process
Price
Marketing
Mix
Physical
Environment
Place
Process
Promotion
Product
 People
 Employee first, profit
second
 Training
 Friendly employees
 Employees’ benefits
package
People
Price
Marketing
Mix
Physical
Environment
Place
Process
Promotion
Product
People
 Physical environment
 The concept of “Third Space”
 Social gathering place
 Providing a retreat
environment
 A communicative
space for society
Price
Marketing
Mix
Physical
Environment
Place
Process
Promotion
 Spending on
advertising

Brand name
 Greatest success
 Contribution
 Location
 Employees
Strengths
 Profitable
organization
 Global coffee
brand
 Fortune top 100
companies
Weaknesses
 New product development
 Do not always work!
 Home market
 Dependant on a main
competitive
Opportunities
 Fair Trade products
 To expand its global
operations
 Co-branding
Threats
 Consumers’
taste
 Competitors
 Purpose
 Gain foothold of
cultures
 Localize in
foreign markets
 Rising gas and food prices
 Though times are tough…
 "Even though money is tight,
Starbucks can still be a part of
your daily routine.”
• Pressure
• Innovation
• Marketing of goods
 $2 cold drinks
if you bring in
your receipt
from the
morning
 Applies to
“Grande" or
medium-sized
drinks
purchased after
2 p.m.
 Common
example
 Geographic
location
 Simple
 Coupons
 Promo codes
 Discounts
 Card rewards
 Increase profit
with these!
 Criticisms
 “Re-loadable” cards
 Water to clean utensils
 Trying to adopt new methods, but
wasteful!
 Some solutions
 LEED certification beginning 2010
 50% of each store’s energy from renewable
sources
 New stores
 Local materials and new looks
 reflect the neighborhoods they're in
 Starbucks Middle East
 Columbia Narino El Tambo gourmet
coffee
 Growers use agricultural practices
 help maintain clean ground water
“Ultimately, we hope
customers will feel an
enhanced sense of
community, a deeper
connection to our coffee
heritage and a greater
level of commitment to
environmental
consciousness.”
“Life is short. Stay
awake for it.”
 Search the world for quality
coffee
 Their size allows for special
coffee
 First to pledge 100% Rainforest
Alliance Certified coffee
 Protects rainforest by changing
development practices
 Goal to achieve this by 2011
 Currently at 85%
 High quality Arabica
beans
 All natural
processing
 Support the
community of the
growers
 “Earthy Feel” drink
names
 Company
marketing strategy
 Categories
 Classics
 Wild
 Cold
 Teas
Some examples
Reindeer drinks
Turtle mocha
Berry white mocha
Caramel high-rise
Campfire mocha
 Breakfast
 Cake
sandwiches  Scones
 Oatmeal
 Cookies
 Muffins
 Bagels
 Brownie
 Doughnuts
bars
 Bread
 Caribou Coffee Domestic Locations
 International Locations
 Bohrain
 Jordan
 Republic of Korea
 Kuwait
 Oman
 Qatar
 Saudi Arabia
 United Arab Emirates
 United States
 Named after a roast
master
 Expanded in 2010
 10% of proceeds
to charity
 First opened in
Berkley, California
 Opened in 1966
 Goal was to give
American's access
to good coffee
• Vision
• Be gold-standard in coffee
and tea
• Loyal customer following
 Mission
 Inspire customers to enjoy the
daily pleasure of Peet’s
 Providing superior products,
knowledge, and superior
service
 Target Market
 San Francisco bay area
 Loyal following
 New plant to meet
demand
 Supplied Starbucks with
their coffee beans
 Acted as mentor
 Smaller batches of high
quality coffee
 Better bean quality
and fresh ingredients
 Profits from selling
 Online
 In Grocery Stores
Peetnick’s customer
reward’s program
 Named after one of
their first customers
Offers Discounts
 International Partners
 Grounds for Health
 Rainforest Alliance
 Global Initiatives
 The Butterfly School
 The Rwanda
Initiative
 Local Communities
 Online Communities
 Facebook
 Twitter
 Sustainability
 LEED certified
roasting facility
 Coffee of the day
 Espresso beverages
 Iced coffee
 Tea
 Iced tea
 Coffee freddos
 Tea freddos
 Peet’s brings in
baked goods
from local
bakeries on a
daily basis
 1st one in Australia (1993)
 1st in USA
 Chicago, Illinois in 2001
 McCafe went national in
2009
 Smoothies and Frappes
added in 2010
 1,300 McCafes worldwide
 Provide coffee in a
‘non-snobby’ way
 Cheaper version
 More accessible
 Laid back atmosphere
 WiFi hotspots
 Lounge areas
 Hang out and do homework, etc.
 McCafe Mocha
 McCafe Latte
 McCafe
Cappuccino
 McCafe Hot
Chocolate
 McCafe Iced Mocha
 McCafe Iced Latte
 McCafe Mocha
Frappe
 McCafe Caramel
Frappe
 McCafe Strawberry
Banana Smoothie
 McCafe Wildberry
Smoothie
 The Cost of a Latte
 Starbucks
 $2.40-$3.10
 McCafe
 $1.99-$2.19
 Speedway
 $1.05
• Buying a latte 3 times a week…
• At Starbuck’s with cheapest cost
• $345.60 a year
• Expenditures on McCafe (using $1.99)
• $286.56 a year
• Savings each year of $59.04!
• Expenditures on Speedway (using $1.09)
• $156.96 a year
• Savings each year of $188.64!
 McDonald’s wins (black coffee)
 Starbuck’s
 Burger King
 Dunkin’ Doughnuts
Ticker Market
Value ($M)
EPS
Beta
SBUX
21,536.91
1.07
1.26
CBOU
212.61
0.35
1.77
PEET
515.69
1.47
0.71
Credit
Rating
Rating
Date
Outlook
Foreign Long
Term
BBB+
August 2010
Stable
Foreign Short
Term
A-2
August 2010
-----
Local Long
Term
BBB+
August 2010
Stable
Local Short
Term
A-2
August 2010
------
 A-2
 Strong capacity to meet financial
commitments
 Somewhat susceptible to adverse
economic conditions
 BBB+
 Adequate capacity to meet financial
commitments
 Subject to adverse economic conditions
StarbucksComparable
Comparable Growth
Starbucks
Growth
10%
5%
0%
2005
-5%
-10%
2006
2007
2008
2009
 “Better training, tools and
products”
 “Attention on store-level
economics”
 “Operating efficiency”
 “Emotional attachment with
customers”
SBUX (in millions)
2005
Cash
Current Assets
Total Current
Liabilities
Common
Equity
2006
2007
2008
2009
174
313
281
322
666
1,209
1,530
1,696
1,748
2,036
1,227
1,936
2,156
2,190
1,581
2,091
2,229
2,284
2,491
3,046
In Millions $
Comparative Balance Sheet 2009
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Cash
Current
Assets
Common
Equity
2,036
Total
Current
Liabilities
1,581
SBUX
666
CBOU
23.6
45.8
31.6
50.6
PEET
47.9
99.0
31.4
165.0
3,046
2005 2006
Revenues
Operating
Income
Net Income
SBUX
(in millions)
2007
2008
2009
6,369 7,787
9,411 10,383 9,775
1,071 1,213
1,437
494
581
673
1,279 1,331
316
391
Comparative Income Statement 2009
In Millions $
10,000
8,000
6,000
4,000
2,000
Revenues
Operating
Income
Net Income
SBUX
9,775
1,331
391
CBOU
263.0
22.1
5.1
PEET
311.0
40.3
19.2
3.5
3
(1:1)
2.5
2
1.5
1
0.5
0
2007
2008
2009
SBUX
0.8
0.8
1.3
CBOU
0.7
0.9
1.5
PEET
2.5
2.5
3.1
600
Millions ($)
400
200
0
-200
-400
-600
2007
2008
2009
SBUX
-460
-442
455
CBOU
-10.2
-3.8
14.2
PEET
38.3
36.4
67.6
10.00
Percentage (%)
5.00
0.00
-5.00
-10.00
-15.00
2007
2008
2009
SBUX
7.15
3.04
4.00
CBOU
-11.94
-6.41
1.93
PEET
3.37
3.92
6.17
6000
Millions ($)
5000
4000
3000
2000
1000
0
2007
2008
2009
SBUX
5344
5673
5577
CBOU
112
89.6
93.7
PEET
178
176
205
16
Percentage (%)
14
12
10
8
6
4
2
0
2007
2008
2009
SBUX
13.8
5.7
7
CBOU
0
0
5.6
PEET
5.1
6.3
10.1
700
600
Millions ($)
500
400
300
200
100
0
2007
2008
2009
SBUX
281
322
666
CBOU
9.9
11.1
23.6
PEET
23.2
13.3
47.9
1400
1200
Millions ($)
1000
800
600
400
200
0
2007
2008
2009
SBUX
1164
865
926
CBOU
3.7
10.9
21.4
PEET
21.2
26.3
36.5
600
500
Millions ($)
400
300
200
100
0
-100
-200
SBUX
CBOU
PEET
2007
2008
2009
84
-13.5
-9.6
-119
5
0.4
480
18.4
22
 Results of taste test
 Discussion
 Financials
 Health
 Recommendations