1. Starbucks Justin Kefal Alison Altomari Nicole O’Keefe Diane Ketler Karen Lau Nicholas Herman

2. Introduction Started 1971 Gerlad Baldwin, Gordon Bowker, Ziev Siegel Original located in Seattle, Pike Place Market Original concept was to bring Espresso bar to America “A third place”

3. Reasons for Unsatisfied Customers Focus on global expansion –Starbucks went public in 1992 - raised $25 million –Worldwide - Opening 3 stores daily on average –Optimistic growth plan - Own 10,000 stores USA Focus on product Innovation –One half day VS. 16 days working 8 hr shifts –Clientele is changing with menu –Increase of customization –“Just Say Yes”

4. Since the beginning… One store: whole coffee beans Transitioned to selling coffee drinks NOW: –Went public in 1992, opened 140 stores –5000+ stores, 20 million customers –Extensive drink menu –Starbucks outside the coffee shop

5. Competition Big Coffee Stores: –Gloria Jeans –Caribou Coffee –Dunkin’ Donuts Small, Independent Shops –More intimate/personalized –More potential product mix

6. Demand 109 million daily coffee drinkers 52 million on-occasion coffee drinkers 1/3 coffee consumption outside the home $21.5 billion total coffee market –Starbucks share – 42%

7. Consumers and the Ideal Customer Changing clientele – new demographics –Younger, less well-educated, lower incomes Highly satisfied customers = most profitable customers Key factors for customer satisfaction –Clean stores and friendly/attentive staff

8. Solutions Starbucks’ Proposal: Invest 40 million annually in the company’s 4,500 stores, which would allow 20 additional labor hours a week/per store. Our Proposal: Do invest the 40 million annually, but do not use every store. Research those stores with higher volumes and invest in those.

9. Solutions Add “bar-back” type employee Offer discounts and incentive offers Better rotation schedule to help prevent sluggish employees

10. Evaluating the Solutions We will continue evaluating the effectiveness of our plan by having monthly check-ups to determine customer satisfaction Keep checking sales with respect to customer satisfaction to make sure both stay positive Continue the Mystery Shopper Program

11. Post-situation July 1 st,2008 – decision to close 600 stores nationwide, expected to close within the next year Starbucks Value Card Iced Brewed Coffee Card