1.

0 INTRODUCTION

Executive Summary

What was once a small coffee shop opened by Gerald Baldwin, Gordon Bowker,
and Ziev Siegl in 1971, Starbucks Coffee Company has grown into the number one
specialty coffee retailer. With over 10,000 coffee shops in more than 30 countries, of
which 4,200 are licensed and franchised and 6,000 are owned, the company’s main
objective is to establish Starbucks as the “most recognized and respected brand in the
world.”

Currently, Starbucks is replying on retail expansion, product innovation, and

service innovation to achieve a long term goal once set by current chairman Howard
Schultz:

“The idea was to create a chain of coffeehouses that would become

America’s “third place.” At the time, most Americans had two places in
their lives – home and work. But I believed that people needed another
place, a place where they could go to relax and enjoy others, or just be by
themselves. I envisioned a place that would mean different things to
different people.”

By working toward this goal, Starbucks wants to open new stores in both new and
existing markets, expand their product development process, and cater to customers’
needs to eventually improve their financial position and dominate market share.
2.0 MARKET SUMMARY

2.1Target Markets

 In the early stages of development for Starbucks, Schultz identified their target
market as “affluent, well-educated, white-collar patrons (skewed female) between the
ages of 25 and 44.”

 Over time, market research teams have recognized the new target market as
“younger, less well-educated, and in a lower income bracket than their more established
customer.”

 Nonetheless, the original target market has not disappeared, but has expanded
into the demographic of the store location. For example, southern California stores
cater to a growing number of Hispanic customers.

2.2 Market Demographics

2.2.1 Geographic

 Data from 2002 showed that in the Southeast there was only one store for
every 110,000 people. Whereas in the Pacific Northwest, there was only one store for
every 20,000 people. Hence, the company was far from reaching existing markets.

 International plans showed Starbucks was operating in over 300 company-

owned stores in the United Kingdom, Australia and Europe, the Middle East, Africa and
Latin America.
 2.2.2 Demographics

 Young, affluent, tech-savvy customers

 A 1999 estimate showed that 70% of customers were internet users, and
today the estimation has exceed 90%
 Moms with strollers
 People combining work and coffee break
 The most frequent customers average 18 visits per month, whereas the
typical customer visits five timers per month.
 Average age for an established customer was 40, new customers was 36.
 Customers that started visiting Starbucks in 2002 were 45% female, 55%
male

2.3 Market Needs

 Starbucks wants to create an experience for their customers that combine their
on-the-go schedule, as well as a place to relax. Senior vice president of the
administration in North America Christine Day explains that, “people come here for the
coffee, but ambience is what makes them want to stay.”

 Selection
 Starbucks menu contains brewed coffee, espresso traditions and
favourites, cold beverages, coffee alternatives, frappuccinos and the sale of whole
beans.

 Accessibility
 Starbucks operates over 10,000 retail stores. Most of the 4,200 franchised
stores are located in shopping malls and airports. Starbucks coffee brands are also
marketed through grocery stores in the form of beans and even ice cream flavours.
 Customer services
 Starbucks employees are referred to as “partners.” As of 2002, Starbucks
employed 60,000 partners worldwide, 50,000 of those in United States. From the
beginning when Howard Schultz took over Starbucks, he believed, “Partner satisfaction
leads to customer satisfaction.” (Moon)

 Competitive pricing
 For North American stores in the 2002 fiscal year, the average price of an
order was $3.85. The drink comes in three sizes: tall, grande, and venti (Italian for
small, medium and large). The least expensive price for a tall drink is $1.40 for brewed
Coffee of the day. The most expensive price for a venti is $4.15 for frappuccino. Whole
beans are sold in half and whole pound bags ranging from $5.20 to $15.95 (Moon)

2.4 Market forecast

 Over the next few years, an estimate for the U.S. retail coffee market expects
specialty coffee to have a compound annual growth rate (CAGR) within 9% to 10%.
 Starbucks was also estimated in 2002 to grow at a CAGR of about 20% top-
line revenue growth.
 As of 2002, coffee consumption had risen with more than half of the
population (about 109 million people) drinking coffee everyday, and an additional 52
million drinking coffee on occasion.

2.5 Market Growth

 Reports show in 2002, the number of specialty coffee drinkers has become the
market’s biggest growth.
 An estimated one-third of all U.S. coffee consumption takes place outside of
the home and in places such as office, restaurants and coffee shops.
3.0 MARKET ANALYSIS
Comparison between two countries, Italy and France:
3.1 The People
3.1.1Ethnic Composition
 Italy (Nationality – Italian)
 Caucasian (southern European) - 99%
 Other - 1%
 France (Nationality – French (singular and plural)
 Celtic and Latin - 90%
 Teutonicand Slavic - 5%
 North African, Indochinese, Basque - 5%

3.1.2 Education and Literacy

 Italy
 Education is state-funded and compulsory between the ages of 6 and
14. The adult literacy rate is 98 percent.
 France
 Education is compulsory between ages of 6 and 16. The adult literacy
rate is 99 percent.

3.1.3 Labour Force

 Italy
 Total: 23.6 million (2001)
By occupation:
Services - 63%
Industry - 32%
Agriculture - 5%
 France
 Total: 26.6 million (2001)
By occupation:
Services - 71%
Industry - 25%
Agriculture - 4%

3.2 Geography
3.2.1 Land Mass Total
 Italy = 116,305 sq mi (301,230 sq km) (Noted: Includes
Sardinia and Sicily)
 France = 211,209 sq mi (547,030 sq km) (Noted: Includes only
metropolitan France, but excludes the overseas administrative
divisions.)

3.2.2 Land Boundaries

 Italy
 Total: 1,200 mi (1,932.2 km)
Border countries : Austria 267 mi (430 km), France 303 mi (488
km), Holy See (Vatican City) 1 mi (3.2 km), San Marino 24 mi (39
km), Slovenia 144 mi (232 km), Switzerland 459 mi (740 km).
 France
 Total: 1,795 mi (2,889 km)
Border countries: Andorra 35 mi (56 km), Belgium 385 mi (620km),
Germany 280 mi (451km), Italy 303 mi (488 km), Luxembourg 45
mi (73 km), Monaco 2 mi (4 km), Spain 387 mi (623 km),
Switzerland 356 mi (573 km).

3.2.3 Climate/Weather
 Italy
 Predominantly Mediterranean; alpine in far north, hot, dry in south.
 France
 Generally cool winters and mild summers; but mild winters and hot
summers along the Mediterranean coast.
3.2.4 Terrain
 Italy
 Mostly rugged and mountainous; some plains, coastal lowlands.
 France
 Mostly flat plains or gently rolling hills in north and west; remainder
is mountainous, especially Pyrenees in south, Alps in the east.

3.2.5 Natural Resources

 Italy
 Mercury, potash, marble, sulphur, dwindling natural gas and crude
oil reserves, fish, coal, arable land
 France
 Coal, iron ore, baucite, fish, timber, zinc, potash.

3.2.6 Land Use

 Italy
 Arable land: 28%
Permanent crops: 9%
other: 63% (1998)
 France
 Arable land: 33%
Permanent Crops: 2%
other: 65% (1998)

3.2.7 Natural Hazards

 Italy
 Regional risks include landslides, mudflows, avalanches,
earthquakes, volcanic eruptions, flooding; land subsidence in
Venice.
 France
  Flooding; avalanches; midwinter windstorms; drought; forest fires in
south near the Mediterranean.

3.2.8 Environment – current issues

 Italy
 Air pollution from industrial emissions such as sulphur dioxide;
coastal and inland rivers polluted from industrial and agricultural
effluents; acid damaging lakes; inadequate industrial waste
treatment and disposal facilities.
 France
 Some forest damage from acid rain (major forest damage occurred
as result of severe December 1999 windstorm); air pollution from
industrial emissions; eater pollution from urban wastes, agricultural
runoff.

3.2.9 Geography Note

 Italy
 Strategic location dominating central Mediterranean as well as
southern sea and air approaches to Western Europe.
 France
 France is the largest west European nation; occasional strong, cold,
dry, north-to-north-westerly wind known as mistral.

3.3 Demographics
3.3.1 Population
 Italy – 57,715,625 (July 2002)
 France – 59,765,983 (July 2002)

3.3.2 Age structure

 Italy
  0-14 years: 14.1% Male: 4,198,569 Female:
3,954,159
15-64 years: 67.3% Male: 19,334,208 Female:
19,492,048
65 years and over: 18.6% Male: 4,436,073 Female:
6,300,568
(2002)
 France
 0-14 years: 18.5% Male: 5,675,269 Female: 5,401,661
15-64 years: 65.2% Male: 19,503,556 Female:
19,479,646
65 years and over: 16.3% Male: 3,948,433 Female:
5,757,418
(2002)

3.3.3 Growth Rate

 Italy: 0.05% (2002)
 France: 0.35% (2002)

3.3.4 GDP Per Capita

 Italy
 Purchasing power parity = us$24,300 (2001)
 France
 Purchasing power parity = us$25,400 (2001)

3.4 Economy and Trade

 Italy
 Italy has a diversified industrial economy with roughly the same total
and per capita output as France and the U.K. These capitalistic remains
divided into a developed industrial north, dominated by private
 companies, and a less developed agricultural south, with 20 percent
unemployment. Most raw materials needed by industry and more than 75
percent of energy requirements are imported. Over the past decade, Italy
has pursued a tight fiscal policy in order to meet the requirements of the
E.U. and has benefited from lower interest and inflation rates. Italy’s
economic performance has lagged behind that its E.U. partners, and the
current government has enacted numerous short-term reforms aimed at
improving competitiveness and long-term growth. Rome has moved
slowly, however, on implementing needed structural reforms, such as
lightening the high tax burden and overhauling Italy’s rigid labour
market and expensive pension system, because of the current economic
slowdown and opposition from labour unions. Privatization of state-
owned business has been a stated goal of the Berlusconi government,
and his Minister of the Economy, Giulio Tremonti, promised a “very
ambitious” scheme in early 2003 that would supposedly raise US$20
billion through state sell-offs within the year. The move is expected to
face severe opposition from government unions who are willing to give
up their sumptuous benefits. Added to these woes, the economy also has
significant “grey” and “black” market sectors, which together account
for almost 25 percent of GDP, pointing to a major loss in tax revenues.

 France
 France is in the midst of transition, from a well-to-do modern economy
that featured extensive government ownership and intervention to one
that relies more on market mechanisms. The Socialist-led government
had partially of fully privatized many large companies, banks, and
insurers, but still retains large stakes in several leading firms, including
Air France, France Telecom, Renault, and Thales, and remains dominant
in some sectors, particularly power, public transports, and defence
industries. The telecommunications sector is gradually being opened to
competition. France’s leaders remain committed to a capitalism in which
they maintain social equity by means of laws, tax policies, and social
spending that reduce income disparity and the impact of free markets on
public health and welfare. The current government has lower income
taxes and introduced measures to boost employment, but has done little
to reform an overly expensive pension system, rigid labour market and
restrictive bureaucracy that discourage hiring and make the tax burden
one of the highest in Europe. In addition to the tax burden, the reduction
of the workweek to 35 hours, extended to small firms in 2002, had
drawn criticism for lowering the competitiveness of French Businesses.
The current economic slowdown has thrown the government’s goals of
balancing the budget by2004 off track. The Chirac government began
economic reforms in 2002 but found itself stymied by France’s all too
powerful government unions that were bent on maintaining benefits that
taxpayers can ill afford. Little by little the government is reducing its
ownership share of large enterprises, but it was quick in propping up the
ailing France Telecom 2002with a big “loan”. The national power utility
EDF-GDF continues to snatch up non-French utilities while using its
own government protected monopoly to keep out foreign competitors or
suitors. Like many other E.U. countries, France faces a future of aging
citizens and no means to pay them their promised pensions. Immigration
 reform, another sensitive topic in elitist France, will be key to keeping
government tax coffers topped up for the future.
+
3.4.1 Inflation rate
 Italy - 2.70% (2001)
 France - 1.70% (2001)

3.4.2 Industries
 Italy
 Tourism, machinery, iron and steel, chemicals, food processing,
textiles, motor vehicles, clothing, footwear, ceramics.
 France
 Steel, machinery, chemicals, automobiles, metallurgy, aircraft,
electronics, mining, textiles, food processing, tourism.

3.4.3 Exports
 Italy - US$243 billion (f.o.b., 2001)
 France - US$293.3 billion (f.o.b., 2001)

3.4.4 Imports
 Italy - US$226 billion (f.o.b., 2001)
 France - US$292.6 billion (f.o.b., 2001)

3.4.5 Total trade

 Italy - Purchasing power parity – GDP US$1.402 trillion (2001)
 France - Purchasing power parity – GDP US$1.51 trillion (2001)

3.4.6 Top Exports

 Italy
 Engineering products, textiles and clothing, production machinery,
 motor vehicles, transport equipment, chemicals; food, beverages and
tobacco; minerals and nonferrous metals.
 France
 Machinery and transportation equipment, aircraft, plastics,
chemicals, pharmaceutical products, iron and steel, beverages.

3.4.7 Top Imports

 Italy
 Engineering products, chemicals, transport equipment, energy products,
minerals and nonferrous metals, textiles and clothing; food, beverages
and tobacco.
 France
 Machinery and equipment, vehicles, crude oil, air craft, plastics,
chemical

3.4.8 Debt – External

 Italy - US$45 billion (1996)
 France - US$106 billion (1998)
4.0 SWOT ANALYSIS

4.1 Strengths
 The company is good at taking advantage of opportunities.
 Starbucks is very profitable and has a strong financial base, therefore
allowing the company to undertake new business ventures.
 Revenue increased to $5294.2 million in 2004, a 29.9% increase from
2003. (DataMonitor).
 Profits increased to $610 million in 2004, a 43.7% increase from 2003.
 Net earnings increased 46% (SWOT).
 The company is internationally recognized and has a global
presence.
 Their reputation is the one of fine products and services.
 Almost 9,000 cafes in almost 40 countries. (SWOT).
 Widespread brand recognition, which in turn becomes brand preference,
and ideally eventually brand loyalty .
 Strong customer base.
 Respected employer
 Value its workforce
 Voted onto fortune’s “Top Companies to Work For” (2005)
 Strong ethical values and mission statement.
 Disciplined innovator
 Understands the Adapt-or-Die theory of marketing
 Has ability to roll out new products relatively quickly, which
translates into a considerable competitive advantages
 Clusters company units
 Expands business with the continuing growth of the
coffee market, especially in areas where the company is already well
established, and groups stores in an area, therefore able to dominate the
region.
  Leads to considerable financial reward without
suffering from cannibalism (DataMonitor)
 Focus on opening stores that have convenient access
for pedestrians and drives.
 Helps the company capture an increasing share of the
coffee market.

4.2 Weaknesses
 Reliance on beverage innovation
 Vulnerable to the possibility that their
innovation may falter over time.
 Company growth is mostly driven by beverage
innovation.
 If U.S. store growth decreases, stock is
lowered in value.
 More than 75% of the company’s stores are in
USA (DataMonitor)
 May need to look for an assortment of countries in which to pen more
shops in order to spread business risk.
 85% of revenue is from its domestic US Market (DataMonitor).
 Has high international brand recognition and should look to generate
a greater proportion of revenue from outside the USA.
 Would suffer greatly if U>S stores underperformed because of
economic conditions or increased levels of competition.
 Dependent on the retail of coffee, this could make them slow to diversify into
other division if the need should rise.
 Employee efficiency is poor.
 Lower revenue per employee ($71,544 – fiscal 2004) compared to the
industry average ($110,841)(DataMonitr)
 Lower income per employee ($5,294 compared to the industry average
 ($9,500) (DataMonitor)
 Lower Return on Equity than peers
 Company’s 5 year average ROE (13.65%) have been lower than the
industry average (15.09%) (DataMonitor).
 Need to effectively manage its finances to ensure the returns are at par of
higher than industry average.
 Problems in some international operations.
 Problems of expansion: A number of openings are falling to be
successful.
 Japanese operation: the company has experienced some same-store
sluggishness.
 Closures of stores in Israel and Tel Viv: Hurts growth prospects in the
regions.

4.3 Opportunities
 In 2004, created CD-burning services where customers can create
their own music CD.
 Opportunities for revenue growth by expanding its global operation.
 New markets for coffee are beginning to emerge; for example,
in India and Pacific Rom (SWOT).
 Targeting 15,000 international stores in the next few years.
 Expansion potential questionable in Brazil, India and
Russia
 China could be one of the largest markets, and therefore the
company will focus on Beijing and Shanghai.
 Large urban population
 Rising economy
 Increase in coffee consumption
 Co-branding with other manufacturers of food drinks and brand-franchising
to manufacturer of other goods and services.
  Creates loyalty for Starbucks Brand
 Recently signed agreement with Jim Beam Brands to develop and
market a Starbucks-branded coffee liqueur drink (DataMonitor), which
has strong revenue potential because:
 Liqueurs represent $4-5 billion opportunity (DataMonitor).
 Liqueurs with coffee represent a considerable segment of the liqueur
market.
 There is a significant overlap between consumers of liqueur and
consumers loyal to the Starbucks brand. (DataMonitor).
 Growth in coffee markets: Starbucks has a market share of over 40% of the
special coffee marker. (DataMonitor). The growth in this category would
result in considerable opportunities for further growth and expansion near
future.

4.4 THREATS

 Coffee may not stay in favour with customers, and another type of beverage
or leisure activity could replace it.
 Rises in the costs of dairy products could affect the company’s margins.
 Competitions
 Competitive coffee shops
 Copy cat brands
 Street carts
 Competition could enter the market at any time.
 The U.S specialty coffee market continues to grow, and an
increasing number of firms are looking to enter.
 At any time, a company with greater financial, marketing and
operating resources could enter the market and compete directly
with Starbucks.
 Volatile nature of the coffee market
  Multiple factors, including weather, political, and economic conditions
for example, can potentially negatively affect the company’s business.
 Green coffee prices may be affected due to agreement establishing
export quotas or restricting global coffee supplies.
 Slowing U.S. retail sales
 Domestic retail account for about 75% of the company’s revenue growth
and an even greater proportion of profit growth. (DataMonitor).
 If current U.S stores growth continues, saturation levels within the North
American division may be reached with five years. Before reaching this
point, U.S retail sales growth will slow significantly. (DataMonitor).

4.5 COMPETITION
 Competition comes in several forms:
 Independent/Local coffee shops
 Social and inclusive
 Diverse and intellectual
 Artsy and funky, typically cosy and very welcoming
 Liberal and free-spirited
 Lingering encouraged
 Particularly appealing to younger coffee house customers
 Wide variety of beverages/foods
 Appeals to the non-traditional crowd
 Franchise/Large Companies
 Generally well-recognized names (McDonald’s, Krispy
Kreme, Dunkin’Donuts, etc).
 More convenient and accessible
 Easy access in and out
 Appeals to the more mainstream coffee drinkers

4.6 SERVICES (COMPANY)

  Starbucks purchases roasts of the highest quality of
whole bean coffees.
 Fresh and rich brewed Italian espresso.
 Offers pastries and other appetizing confections
 Sells coffee-related accessories (mugs, coffee makers,
cups, espresso, etc)
 Expanded sales into supermarkets of whole bean coffee
 Introduction the widely popular drink, Frappuccino to
the public
 Strives for satisfied customers and welcoming
environment
 Works to have highest standards of excellence in way
of business
 Offers newspapers and other reading material, popular
music, and Internet access (Local or international provider).

4.7 KEYS TO SUCCESS (COMPANY)

 Rapidly expand retail operations
 Growth in its specialty sales and other operations
 Selectively pursue opportunities to leverage the Starbucks brand through the
introduction of new products
 Continue to be widely available and welcoming
 Maintain reputation for having specialty and gourmet coffee
 Make customers feel welcome with friendly services

4.8 CRITICAL ISSUES

 Must increase customer satisfaction through improvement to services
 Friendlier and more attentive staff
 Faster and more efficient services
 Increase in personal treatment (remember customer’s name and order)
 More knowledgeable staff
 Better overall service
 Offer better prices/incentive programs
 Free cups after “x” number of visits
 Reduction of price
 Offer promotions, sales to increase customer satisfaction
 Others:
 Offer better quality and variety of products
 Improve atmosphere (friendly, welcoming)
 Reaching out to community through involvement and awareness
 More stores and convenient locations

 Other critical issues Starbucks is criticized for and must be

an aware of are:
 Clustering
 Driving out independents
 Loss of diversity
 Its policy toward farming communities in developing
countries
 FairCRI
trade I ncrease
TI CAL I SSUES
Cust omer
 Satvital
May of these issues is i sf act i on
for Starbucks to improve
t hrough
their customers’ satisfaction (Simmons).I mprovement s
t o Servi ces
( 29%)
Of f er Bet t er
Pri ces/ I ncen
t i ve
Programs
( 26%)

Undeci ded/ Al
ready
Sat i sf i ed
( 25%)

OTHER ( 20%)
5.0 MARKETING STRATEGY

5.1 Marketing Objectives

 To create a Starbucks experience that makes people come for the coffee, stay
for the ambience and environment, and return for the connection.
 To build an image separate from smaller coffee chains
 To clearly communicate the values and commitments of the Starbucks
business to their customers, instead of only growth plans publicized in the
media.

5.2 Financial Objectives

 Have each store reach a $20,000 weekly sales level
 Open new stores with lower store-opening costs (about %315,000 per store
on average.)
5.3 Targeting Marketing
 Based on a sample of Starbucks’ 2002 customer base, the attitudes toward the brand

were:

NEW CUSTOMERS EXISTING

(FRIST VISIT THIS CUSTOMERS (FIRST
YEAR) VISIT 5+ YEARS AGO)
High quality brand 34% 51%
Brand I Trust 30% 50%
For someone like me 15% 40%
Worth paying more for 8% 32%
Known for specialty coffee 44% 60%
Known as the coffee expert 31% 45%
Best-tasting coffee 20% 31%
Highest-quality coffee 26% 41%
Overall opinion of 25% 44%
Starbucks

 The chart shows that the new customers have a poorer attitude toward
Starbucks in every category than the existing customers
 The new customer types that need attention is:
 45% female, 55% male
 Average age of 36
 37% have a college degree
 Drink an average of 15 cups of coffee per week

5.4 Store Expansion Strategy

 Target areas with favourable demographic profiles, as well as areas
that can be services and supported by the company’s operation
infrastructure.
 For each targeted area, select a large city to serve as a focal
point.
 Goal of each focal city: Open 20 or more stores in that city
in the first two years.
 Once all the stores cover the city, open additional stores in
 smaller, surrounding areas in the region.
 With this plan, the company had only closed 2 of the
1,500 sites it had opened between 1992 and 1997.
 Stores must be custom-designed.
 The company does not buy freestanding
structures, and there fore each store is a different shape and size.
 Most stores range in size from 1,000 to 1,500
square feet.
 Most stores are located in high-trafficked, high-visibility areas, such as:
 Office buildings
 Downtown and suburban retail centres
 Airport terminals
 University campuses
 Busy neighbourhood shopping areas convenient to pedestrian traffic.
 International expansion
 As of 2004, the company operated over 300 company-owned stores in
the United Kingdom, Australia, and Thailand, as well as 900 licensed
stores in Asia, Europe, the Middle East, Africa, and Latin America.
 Goal: Have 15,000 international stores
 Other things to consider:
 Kiosks
 Drive-through windows

5.5 Positioning
 Store Ambience
 Goal: to make customers want to linger
 Social Appeal – Offer a sense of community, a place where
people can come together.
 Physical layout
 Seating areas to encourage lounging
  Appear upscale yet inviting
 Aromas
 Smoking is banned in all stores
 Employees are asked to refrain from wearing
perfumes or colognes, and prepared foods are kept covered so
customers would only smell coffee aromas.
 Sounds
 Play soothing CDs that are also for sale
 Often offer live music
 Customer Service
 The company sees a direct link
between customer satisfaction and customer loyalty.
 The company believes that employee
satisfaction leads to customer satisfaction.
 Voted onto Fortune’s Top 100 Places to Work
 Employee satisfaction remains consistently around 80% - 90%
 Turnover rate is 70%, one of the lowest in the industry.
 Focuses on manager stability in order to decrease employee
turnover, but also to help recognize regular customers and provide
personalized services.
 Employees are trained to connect with customers and focus on
“customer intimacy.”
 Greet customers with a smile.
 Enthusiastically welcome customers into the store.
 Establish eye contact.
 Try to remember customers’ names and orders if they are frequent
customers.

 “Just Say Yes” policy, in order to keep customer happy, which may go
beyond stores rules.
  Example: Always compensate dissatisfied customers with a
Starbucks coupon entitling them to a free drink.
 Example: Give a customer a free refill if he/she spills their drink.
 Advertising – The Company spends very little on advertising
and depends on word – of – mouth promotion.
 Involvement in the Community
 Contributing positively to surrounding communities is one
of Starbucks’ guiding principles in the company’s mission statement.
 Howard Schultz had the plan to “build a company with soul
(student)”.
 Starbucks has been the largest corporate contributor in
North America to CARE, a worldwide relief and development
organisation to help Third World countries where Starbucks purchases its
coffee supplies.
 The company has an Environmental Committee that looks
for ways to reduce, reuse, and recycle waste, as well as contribute to
local community environmental efforts.
 The company donated almost $200,000 to literacy
improvement effort (student).
 Starbucks has many community building programs to
“contribute positively to the communities where our partners
(employees) and customers live, work and play” (Corporate).
 “As part of Starbucks ongoing commitment to share the
comfort of coffee during times of crisis, the company continues to
demonstrate our support of the men and women serving in the U.S
military overseas”(Company).
 The Starbucks Foundation (Company)
 Established in 1997 by Howard Schultz
 Inspired by Schultz’s childhood experiences and those of
other inner city children
  Dedicated to creating hope, discovering, and opportunity in
the communities of Starbucks

6.0 CONTROLS
 Problems and Solutions
 In 2002, our felloe associates, including Christine
Day, recognized that customer service needed to be improved upon, and
one idea to conquer this problem was to invest $40 million annually in
4,500 stores.
 By adding almost $9,000 to each store, this would
allow an additional 20 hours of labour per week.
 Day, said” the idea is to improve speed-of-service
and thereby increase customer satisfaction.”
 According to survey of customers, 65% believed
fast services was a key attribute to their satisfaction.
 In the past when we thought of adding more labour
hours to our retail stores, we decided against it due to the struggling
economy, especially since labour was already our biggest expense.
 Another option instead of increasing labour hours
is to increase the efficiency of the tasks, simplified the production
process, and manipulated the stores layout to take better advantage of
store space.
 Additionally, we installed an automatic espresso
machine that was faster, reduced waste, and improved consistency while
still fulfilling our customers’ needs. We want to continually implement
the use of thse machines in more of our stores.
 Furthermore, we want to add more drive-thru lanes
to our stores. In doing so, we can still serve our customers who want to
taste of Starbucks on-the-go.
6.1 MARKET ORGANIZATIONS
 Although we have been considered one of the
world’s most effective marketing organisations, we still lask of a strategic
marketing group.
 Instead, we have smaller divisions:
 Market research group – garthered and
analyzed market data
 Category group – developed new products
and managed the menu
 Marketing group – developed quarterly
promotional plans
 However, we need to find a way to
get these divisions to collaborated so all the information about the market and
customer trends is not overlooked like it has been in the past and we can make
better decisions about dring our business in the future.

REFERENCES:
“Company, The” Starbucks, 2006 www.starbucks.com
“Corporate Social Responsibility” Starbucks Coffee, 2006 Starbucks Corp.
http://www.starbucks.com/
Moon, Youngme and John Quelch, Starbucks Delivering Customer Service. Barvard
Business School, 2006
Simmon, John. “Starbucks: Supreme Bean.” Brand Channel 2005.
www.brandchannel.com
“Starbuck Corp”, Hoovers Inc, 2006 www.hoovers.com/xtarbucks
“Starbucks Corp” Student Resources, 2006. MsGraw Hill 2006
Http://www.mhhe.com/starbucks
Thompson, Arthur A., and John E. gamble. “Starbucks Corp”, McGraw Hill Com,
2006 http://www.mhhe.com
“Starbucks Corp” DataMonitor, 2005 http://wwwalacrastore.com
“SWOT Analysis Starbucks”, 2006 Marketing Teacher Ltd 2006.
<http://www.marketingteacher.com>