Transnational Strategies Current and Future Strategies: Global Growth – focused on local needs and preference, global demands, and cross-border learning in Overseas Operation Multi-brand Multichannel Source: Fiscal 2011 Annual Report

New Corporate Structure (2011) New three-region organizational leadership structure to Accelerate Global Growth : China and Asia Pacific: All Asia Pacific markets and China Americas: United States, Canada, Mexico and Latin America EMEA: Europe, U.K., Middle East, Russia and Africa Source: Fiscal 2011 Annual Report and press release July 11, 2011

Starbucks Financial Highlights – Fiscal Year 2011 Annual Report

Starbucks First Quarter Fiscal 2012 Results Consolidated net revenues reached a record $3.4 billion in Q1 FY12, an increase of 16% over Q1 FY11. The increase was primarily due to a 9% increase in global comparable stores sales, and 72% growth in the CPG segment. Starbucks opened 241 net new stores globally, reaching 500 stores in both mainland China and Latin America. Over 100 million Starbucks- and Tazo-branded K-Cup® packs shipped in Q1 following the November 1 st 2011 launch. Global expansion of our successful Starbucks- and Tazo-branded K-Cup® portion packs which were added to the lineup at the start of fiscal 2012 will not be available for sale in Brazil until a later time. Sources: 2012 Quarterly report and Form 10-K FS YR 2011

Conclusion (Lessons Learned) An American corporation trying to sell coffee to Brazilians is almost as ambitious as trying to sell sand in Sahara. However, Starbucks have managed to win a market segment that was not facilitated by the existing coffee franchises like Fran's and Ponto Caffe. Brazil is well known as the land of coffee but Brazilians do not love coffee. However, The Brazilians way of drinking coffee fits well into Starbucks' highly milk and cream based product line. Starbucks have localized their traditional cappuccino with a "doce de leite" edition. Doce de leite is a traditional Brazilian cream made out of milk and sugar, not unlike caramel syrup. This is a cream that most Brazilian where eating as kids and with which they had a lifelong relation. By linking the famous Starbucks Cappuccino with a traditional product, they created a true local touch to their product. Most Brazilian coffee shop chains you will find staff that couldn't care less about being friendly. Starbucks addressed this by hiring and training the friendliest staff from all the large coffee shop chains in Brazil. They are earning their investment in human reasoners back with the Brazilians loyalty to friendly service. Source: