Company Overview

1
Starbucks Balanced Scorecard Project
2
Starbucks BSC - Agenda

• Company Overview
• Purpose of Starbucks BSC
• Starbucks Strategy at the Store Level
• Starbucks BSC
• Causality Relationships for the Proposed BSC
• Consequences of New BSC
• Feasibility of Proposed Metrics
• Conclusion

3
Company Overview

• Established in 1971, since then have grown to
  become the leading retailer, roaster, and brand
  of specialty coffee in the world with locations
  in North America, Latin America, Europe, Middle
  East, and Asia Pacific.
• AS OF 2006
• Net revenue 7.8 Billion
• Net earnings 564 Million
• Earnings per common share diluted 0.71
• Number of countries Starbucks is located in 37
• Total retail stores world wide (excluding
  franchises) 12,440
• Number of partners (employees) worldwide 145,800

4
BSC Purpose

• The purpose of this BSC is to develop metrics
  that allow individual Starbucks stores to
  measure current performance as they align with
  the overall store strategy. This scorecard
  incorporates both lagging and leading metrics to
  create a holistic view of performance as it
  pertains to the Cybernetic Feedback Model.

5
Starbucks Individual Store Strategy

• To provide a clean and comfortable store
  experience with consistent quality products and
  service
• Contribute positively to our communities
  environment
• Provide a great work environment and treat each
  other with respect and dignity
• Recognize that profitability is essential to
  success
• Source Starbucks CSR brochure, tailored to the
  store level

6
Balance Scorecard
7
LEARNING GROWTH
LEGEND


Starbucks Store Strategy 1.
Quality products/service 2. Contribute to
communities 3. Great work environment 4.
Profitability
8
CUSTOMER PERSPECTIVE
LEGEND


Starbucks Store Strategy 1.
Quality products/service 2. Contribute to
communities 3. Great work environment 4.
Profitability
9
INTERNAL OPERATIONS
LEGEND


Starbucks Store Strategy 1.
Quality products/service 2. Contribute to
communities 3. Great work environment 4.
Profitability
10
FINANCIAL PERSPECTIVE
LEGEND


Starbucks Store Strategy 1.
Quality products/service 2. Contribute to
communities 3. Great work environment 4.
Profitability
11
Causality Relationships for Strategic Objectives

• Contribute positively to our communities and
  environment

Contribution to the community
Profitable Growth
Financial
Continuous Community Involvement
Customer
Minimize Solid Waste
Internal
Employee Satisfaction
Learning/Growth
12
Causality Relationships for Strategic Objectives

• Provide a great work environment and treat each
  other with respect and dignity

Profitable growth
Financial
Customer Satisfaction- Service
Customer
Maintain a clean, safe, and orderly store
Internal
Knowledgeable employees
Employee Satisfaction
Learning/Growth
13
Causality Relationships for Strategic Objectives

• To provide a clean and comfortable store
  environment with consistent quality products and
  service

Profitable growth
Financial
Customer Satisfaction- Product
Customer Satisfaction- Service
Customer
Maintain a clean, safe, and orderly store
Minimize Solid Waste
Initialize Quality Assurance
Internal
Knowledgeable employees
Employee Satisfaction
Learning/Growth
14
Causality Relationships for Strategic Objectives

• Recognize that profitability is essential to
  success.

Profitable growth
Financial
Customer Satisfaction-Service
Customer
Product Mix
Maintain a clean, safe, and orderly store
Minimize Solid Waste
Initialize Quality Assurance
Internal
Knowledgeable employees
Learning/Growth
15
Consequences and Behavior Changes

• RELEVANT STAKEHOLDERS
• PARTNERS/EMPLOYEES
• Conflict between commitment/expectations of
  employees and compensation
• ex. A barista getting paid minimum wage may not
  feel the need to put forth extra effort/time into
  community service
• SHAREHOLDERS
• Setting profitability as a strategy illustrates
  to shareholders that Starbucks is keeping them in
  mind
• CUSTOMERS
• BSC will ensure consistent quality for the
  customer for each visit

16
Questions