Starbucks Balanced Scorecard

BSC implementation for Starbucks

1. THE BALANCED SCORECARD I Starbucks Inc. Efe Abighe - Yasin Gonenc - Panagiotis Panas - Chenyang Shao - Ding Wang

2. Starbucks Inc. 1 INTRODUCTION Mission - To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time Background - Premier roaster, marketer and retailer of specialty coffee - Founded in Seattle, Washington in 1971 - 23,768 retail stores in 68 countries 17/03/2016 2

3. 3 Starbucks Inc. 2 BSC l HIERARCHY

4. Starbucks Inc. 3 BSC l IMPLEMENTATION OF BSC People do not know, what they do not know. - Methods of order and meetings guide people to continuously question our strategy, keep our core values in their mind, and in the end employees figure out what they don’t know 17/03/2016 4 Executive Meetings 6 & 2 Month Frequency Operational Meetings Weekly Frequency Informal Meetings Potlucks and Happy Hours - Monthly

5. Starbucks Inc. 4 BSC l OBJECTIVE OF BSC BSC, to be able to deliver our strategy to the lowest level of our organization - Balanced way. Through Classification - Ordered of Assessment We believe in constant development and flexibility. 17/03/2016 5 Integrating people and give them chance to act.

6. Strategic Imperatives 5 BSC l STARBUCKS Inc . Financial Perspective Internal Business Perspective Customer Perspective Innovation, Learning & Growth Perspective Corporate Strategic Imperatives Penetrate Global Markets Leveraging Brand Social Gathering Place Environmental Leader Invest in our People 17/03/2016 6

7. Can we continue to Improve and Create Value? 6 Innovation Objectives Measures Social Digital Growth (Mobile Order and Pay, My Starbucks Reward Loyalty Program) Number of Mobile Application Users Number of Orders placed using the Mobile App Number of Sign ups on the Loyalty Program Rate of Increase in Revenue from mobile orders Total contribution of Mobile orders to revenue BSC l INNOVATION, LEARNING AND GROWTH PERSPECTIVE 17/03/2016 7

8. Can we continue to Improve and Create Value? 6 Innovation Objectives Measures Store Design experimentation (Express Stores and Drive thrus ) Number of New designed stores launched Number of customer visits to new stores Processing time of customer orders at new designed stores Retail Tea Ambitions- ( Teavana Brand Tea, Oprah Chi Tea) Increase in Number of Teavana Stores in tea drinking countries in the Asia Pacific- India, China BSC l INNOVATION, LEARNING AND GROWTH PERSPECTIVE 17/03/2016 8

9. Can we continue to Improve and Create Value? 6 Improving Operating Efficiencies Objectives Measures Employee (Partner) Satisfaction Rate of employee turnover Length of employee tenure Rate of employee absenteeism Empower employees (College Achievement Plan) Number of training sessions completed Number of employees completing their Undergrad degree while in Starbucks BSC l INNOVATION, LEARNING AND GROWTH PERSPECTIVE 17/03/2016 9

10. What must we excel at? 7 BSC l INTERNAL BUSINESS PERSPECTIVE Consumer satisfaction Objectives Measures Improve product quality Coffee beans quality Improve service quality Numbers of employees’ training session Percentage of trained staff 17/03/2016 10

11. What must we excel at? 7 BSC l INTERNAL BUSINESS PERSPECTIVE Consumer base Objectives Measures Product diversification Number of new products Number of Starbucks Reserve Roastery & Tasting Room Geography diversification Number of new stores in key emerging markets Strategic alliance and acquisitions Percent of revenue from acquisition Success rate of acquisition 17/03/2016 11

12. What must we excel at? 7 BSC l INTERNAL BUSINESS PERSPECTIVE Resource utilisation Objectives Measures Increase employee productivity Net revenue per labour hour per employee Number of coffee processed per hour Improve asset utilisation Average using life of machines 17/03/2016 12

13. How do Customers see us? 8 BSC l CUSTOMER PERSPECTIVE Markets Objectives Measures Increase customer’s loyalty Regular customer Percentage of l oyal member Expand into new market New type of selling/market Increase Market share Percentage of market share New stores Promotion to new customers 17/03/2016 13

14. How do Customers see us? 8 Customer Satisfaction Objectives Measures Pre-purchase & Service satisfaction Time spent in the waiting line Explanation for the products Number of complaints per year Post-purchase & Product satisfaction Tailored product, customization Sales of new product Number of returned drinks Environmental effort Clean, safe stores Tables, Wi-Fi connection BSC l CUSTOMER PERSPECTIVE 17/03/2016 14

15. How do we look to Shareholders? 9 Growth Objectives Measures Increase in Sales YoY % Increase in Sales Increase in Market Share % Increase in Market Share New Stores New Products Profitability EPS ROE BSC l FINANCIAL PERSPECTIVE 17/03/2016 15

16. How do we look to Shareholders? 9 Cost Reduction Objectives Measures Administration Costs YoY % Reduction Cost per Unit/Services % reduction in cost per unit BSC l FINANCIAL PERSPECTIVE Objectives Measures Improve Asset Utilisation ROI/AT 17/03/2016 16 Asset Utilisation

17. 17 Asset Utilization Cost Eff . Customer Loyalty Social Digital Growth Employee Satisfaction Empower Employees Store Design Experimentation Product Diversification Geography Diversification Improve Product &Service Quality Increase Consumer Base Customer Satisfaction Environmental Effect Net $ Growth Resource Utilization 10 ACTING STAGE OF MIDDLE MANAGERS Penetrate Global Markets – $ Leveraging Brand Social Gathering Place Environmental Leader Invest In Our People 17/03/2016

18. 11 BALANCED SCORECARD l STARBUCKS Inc. CORPORATE STRATEGIC IMPERATIVES Penetrate Global Markets Leveraging Brand Social Gathering Place Environmental Leader Invest in our People INNOVATION, LEARNING & GROWTH PERSPECTIVE FINANCIAL PERSPECTIVE CUSTOMER PERSPECTIVE INTERNAL BUSINESS PERSPECTIVE Net Revenue Growth Cost Reduction Asset Utilisation Customer loyalty Increase Consumer Base Customer Satisfaction Environmental Effect Product Diversification Geography Diversification Improve Product & Service Quality Resource Utilisation Employee Satisfaction Store Design Experimentation Mobile App Growth Retail Tea Ambition Empower Employees 17/03/2016 18

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