Hbr Case Starbucks
Starbucks
We take Coffee seriously!
Starbucks
Problem Statement • Is this best possible way to grow? • How much to extend in the quest for growth? • How do tap / react the opportunities?
About Starbucks
• Speciality coffee company – Arabica beans • CEO – Howard Schultz • 1000 retail locations in 32 markets throughout North America and 2 stores in Tokyo
About Starbucks
Channels • Retail Outlets – Bread and Butter – An experience store (Third Place) – Contribution to revenue: 86% – Educated customers and highly trained employees – Disciplined approach to Real Estate • Mostly owned • Excellent design • Store clustering • Role of Estate Managers and “street sniffers” – Growth plans of 20 – 40 stores p.m / 2000 stores by Year 2000
– International growth Plans
About Starbucks
Channels • Specialty sales – Agreements with retailers, wholesalers, restaurants and service providers – Revenue growth potential – Increased name recognition – Partnerships with companies that are leaders in their field – Partnerships involved • Serving Starbucks Coffee • Product Development • Store Development
About Starbucks
Channels • Specialty sales – Agreements with retailers, wholesalers, restaurants and service providers – Revenue growth potential – Increased name recognition – Partnerships with companies that are leaders in their field – Partnerships involved • Serving Starbucks Coffee • Product Development • Store Development
About Starbucks
Channels • New Ventures – New opportunities for coffee based products – Exploring new channels – Dreyer’s Ice-cream – Bottled Frappuccino, with Pepsi – Penetration into the grocery channel (Portland, Chicago) Mail order – For customers away from a Starbucks retail store – For regular home users – Direct mail program – “Encore” • Monthly shipments of ground or whole bean coffee
•
About Starbucks
Business Model • Sourcing: – Diversified sourcing portfolio – Close working relationship with exporters – Purchased
We take Coffee seriously!
Starbucks
Problem Statement • Is this best possible way to grow? • How much to extend in the quest for growth? • How do tap / react the opportunities?
About Starbucks
• Speciality coffee company – Arabica beans • CEO – Howard Schultz • 1000 retail locations in 32 markets throughout North America and 2 stores in Tokyo
About Starbucks
Channels • Retail Outlets – Bread and Butter – An experience store (Third Place) – Contribution to revenue: 86% – Educated customers and highly trained employees – Disciplined approach to Real Estate • Mostly owned • Excellent design • Store clustering • Role of Estate Managers and “street sniffers” – Growth plans of 20 – 40 stores p.m / 2000 stores by Year 2000
– International growth Plans
About Starbucks
Channels • Specialty sales – Agreements with retailers, wholesalers, restaurants and service providers – Revenue growth potential – Increased name recognition – Partnerships with companies that are leaders in their field – Partnerships involved • Serving Starbucks Coffee • Product Development • Store Development
About Starbucks
Channels • Specialty sales – Agreements with retailers, wholesalers, restaurants and service providers – Revenue growth potential – Increased name recognition – Partnerships with companies that are leaders in their field – Partnerships involved • Serving Starbucks Coffee • Product Development • Store Development
About Starbucks
Channels • New Ventures – New opportunities for coffee based products – Exploring new channels – Dreyer’s Ice-cream – Bottled Frappuccino, with Pepsi – Penetration into the grocery channel (Portland, Chicago) Mail order – For customers away from a Starbucks retail store – For regular home users – Direct mail program – “Encore” • Monthly shipments of ground or whole bean coffee
•
About Starbucks
Business Model • Sourcing: – Diversified sourcing portfolio – Close working relationship with exporters – Purchased