Starbucks Presentation

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GLOBAL MANAGEMENT - CASE STUDY Starbucks International Operations a presentation 1

GLOBAL MANAGEMENT - CASE STUDY Starbucks International Operations a presentation 1

First store opened in Seatle in 1971 165 Outlet in 1992 when company issued its initial shares of public stocks generates $4 billion per year in revenue Serves more than 33 million customer each week Partners with Albertson’s, Barnes & Nobles, Hyatt, Kraft, Marriot, Pepsi, United Airlines

STARBUCKS facts and figures
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First store opened in Seatle in 1971 165 Outlet in when For Year 2002...... 13101992 initial company issued its Stores in more than public stocks shares of 30 generates $4 countries around the billion per year in revenue world Serves more than 33 million customer each week Partners with Albertson’s, Barnes & Nobles, Hyatt, Kraft, Marriot, Pepsi, United Airlines

STARBUCKS facts and figures
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Country Japan Taiwan China South Korea Arab Emirat Lebanon Spain Indonesia New Zealand Hawai

Store 397 99 88 53 23 11 5 5 34 30

1,500

1,125

750

375

0

1,310 First store opened in Seatle in 1971 165 Outlet in 1992 when company issued its initial 929 shares of public stocks generates $4 billion per year in revenue 524 Serves more than 33 million customer each week 278 Partners with Albertson’s, Barnes & Nobles, Hyatt, Kraft, 128 Marriot, Pepsi, United Airlines 17 5 1995 1996 1997 1998 1999 2000 2001 2002

STARBUCKS facts and figures
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Provide a great work environment and treat each other with respect and dignity Embrace diversity as an essential component in the way we do business Apply the highest standard of excellence to the purchasing, roasting, and fresh delivery of our coffee Develop enthusiastically satisfied customers all of the time Contribute that profitability is essential to our future success

STARBUCKS business philosophy

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Customer Service Excellence Product Quality Accessibility Emerging Corporate Responsibility Financial Resources Brand Recognition

STARBUCKS success factor

3

A new Starbucks open in restroom of existing Starbucks.......!!!

Headline in The Onion, a Satirical Publication

STARBUCKS business model

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Cluster Strategy Disadvantage : the new stores will often canibalize one another’s business and capture about 30 % of the sales of a nearby starbucks Advantage : cut down on delivery and management , shortens customer lines, increases foot traffic in an area, brand awareness.

STARBUCKS business model

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STARBUCKS business model

3

STARBUCKS business model

3

STARBUCKS business model

3

STARBUCKS expansion strategy
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LICENSING

Advantage • low development cost and risk. • fast market access • Avoids regulations and tariffs Disadvantage • Lack of control over the licence ‘s activities and performance

STARBUCKS expansion strategy
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Advantage • insider access to market • share cost and risk • leverage partner’s skill base technology • local contact Disadvantage • Lack of controll over technology • Inability to engage in global strategic coordination • Inability to realize location and experience economic

JOINT VENTURE STARBUCKS expansion strategy
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WHOLLY OWNED SUBSIDIARIES

Advantage • Protection of technology and skill base • Full authority of revenue and controll

Disadvantage • High cost and risk

STARBUCKS expansion strategy
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Country

Partner

Agreement

Ownership

Stores 2002

Stores 2003

Australia Japan China (Beijing) Germany Thailand Middle East Indonesia Spain M.H.Alshaya Co PT.Mitra A Sazaby Inc Mei Da Coffee KarstadtQuelle

Majority Own JV-public Licence JV JV Majority Owned Licence Licence JV JV wholly owned

90% 40% 5% 19,5% 97%

29 357 26 25 0 26 65

60 570 45 45 21 37 98

China (Shanghai) President Coffee

WHOLLY Grup Vids OWNED President Coffee Taiwan SUBSIDIARIES United Kingdom Source : Merryl Lynch

Advantage 0 5 • Protection of 18% 13 technology and skill 2...
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