Performance Measurement

Assignment 2
Strategic Map of Starbucks
Coffee Company
Group 4: Alessia Bianchi (1381946), Valentina Chiarini (1573971),
Claudia Klapproth (1574367), Federico Nardini (1343623), Andrea
Padovani (1347780)

Starbucks Operating Segments

1. United States:
The Strategy
Contains company-operated retail stores and
DRIVERS
specialty operations within the US (e.g. licensed
The
Objectives
retail stores)
MEASURES
2. International:
1. Customers
MEASURES Contains retail store licensing operations in
2. Financial
almost 50 countries and foodservice (primarily
MEASURES in Canada and UK)
3. Internal
Process
3. Global Consumer Products Group (CPG):
MEASURES Contains packaged coffee and tea, Starbucks
4. Learning &
VIA Ready Brew and other branded products
Growth
STRATEGI sold worldwide
SWOT

C MAP

SWOT Analysis
SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

MEASURES
2. Financial

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

Strengths

Weaknesses

Internationally known, strong, valuable

brands
Efficiency and effectiveness in supply
chain
High quality of products and service
Starbucks Experience
High accessibility (Starbucks at every
corner)
Strong relationship with suppliers, i.e. low
risk of non-delivery
Starbucks Global Responsibility strategy

Dependent on relationship with suppliers

Health effects of consuming Starbucks
products
Natural disasters may largely affect supply
Dependent on US operating segment (75%
of total revenues in 2010)
Future growth is increasingly dependent on
International operating segment (might not
work due to taste differences)
Regional or global health pandemic could
affect business

Opportunities

Threats

Leverage Starbucks brand even more

outside the company-operated store base
Product innovation and new growth
platforms
Expand international operating segment
Expand in Chinese market (believed to
become largest market after North
America) and Brazilian market
Global Consumers Product Group (e.g.
Starbucks VIA and Seattles Best Coffee)

Supply and price of coffee is

subject to significant volatility
Large number of competitors in
specialty coffee beverage business
can lead to low profitability
Economic conditions in US and
certain international markets
might decrease customer spending

Group 4

Mission and Strategy

SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

Mission
to inspire and nurture the human spirit one person, one cup and one
neighborhood at a time
Strategy
It mainly touches four specific fields:
Social
3 place between home and work with the Starbucks Experience
Social community (online and around the physical store)

MEASURES Markets & Products

2. Financial

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

Introduction of new products in the existing market (Product development)

Expansion in to new markets with existing products (Market development)
Diffusion of existing products in existing market (Market penetration)

Public Responsibility
Environmental responsibility
Giving back to the community served both on the local and international level

Service
High quality service

STRATEGI According to the strategy Starbucks is adopting, different drivers and

C MAP
objectives can be identified for each one of the four perspectives.
Group 4

1. Customer Drivers and

Objectives
SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

MEASURES

According to this perspective, the most important to Starbucks, its

easy to identify 3 main drivers, all of them obviously related to the
first point of Starbucks strategy, the social side of its activity.
With the customer as main reference, the company focuses its effort
on the existing market, the US one, looking for a diversification in
its product offer, in order to increase the customer profitability and
the brand loyalty through a higher client satisfaction, in order to
maintain and enhance its customers sense of community

2. Financial

MEASURES
3. Internal
Process

Taking into consideration the new market (Europe and Asia), the
main goal for Starbucks is the expansion of its market share,
through the acquisition of new customers and the increment of the
sales per customer

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

Talking about reputation the company cares about 2 main aspects

of its strategy: the awareness of the public about its environmental
effort and the creation of the Third place, between work and
home, both oriented to the improvement of its public image.
Group 4

2. Financial Drivers and

Objectives
SWOT
The Strategy

DRIVERS
The
Objectives

Since Starbucks main goal is customer and product profitability

3 main drivers can be identified:

Revenue Growth, reached by increasing the number of

new products throughout differentiation (product
development, not only coffee and bakery, but also salads,
sandwiches, bottled drinks sold in supermarkets), reaching
new customers and markets and changing to more
profitable product or service mix.

Cost Reduction, throughout a reduction of product/service

cost per unit (huge implementation of economies of scale
and scope economies) and administration costs.

Asset utilization. With higher availability, it is possible to

produce and sell more products with the same invested
capital, generating more income while the fixed costs
remain the same (economies
of scale -> same distribution
Group 4
channel for more than one final product or raw material).

MEASURES
1. Customers

MEASURES
2. Financial

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

3. Internal Drivers and

Objectives
SWOT
The Strategy

Starbucks wants to improve on every aspect of its business, from

suppliers to operations to customers. This allows us to focus on three
drivers, namely

DRIVERS
The
Objectives

MEASURES
1. Customers

MEASURES
2. Financial

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

Enhancing consumer relationships, since, as previously mentioned,

customers are the most important aspect of Starbucks strategy. This
could be done through an increase in service efficiency and quality, as
well as an improvement in the complaints resolution service.
Enhancing supplier relationship, since Starbucks supply of fresh
coffee is one of its major point of strength. This necessitates an
increase in its long-term supplier relationships, which would go hand in
hand with an increase in quality and yield of coffee.
Regarding its operations, Starbucks has to work on decreasing process
cost and time, as well as increasing process efficiency and quality, in
order to be more responsive and rapid and further give consumers an
improved experience.

Group 4

4. Learning & Growth Drivers

and Objectives
SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

MEASURES
2. Financial

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

This fundamental perspective focuses completely on the companys

employees. Starbucks main goal is to have the best possible staff and be an
employer of choice in order to grow in the long-run. To do so, this perspective
is divided into 3 main drivers.
All the employees have to be skilled and prepared to reach their goal, and
the company tries to enhance employee capabilities mainly through its
training and formation program. This way, Starbucks is also able to retain
and attract the employees who have the best qualities and skills.

The employee motivation is fundamental for a good performance on the

job and therefore customer satisfaction. The company's goal is to maintain
the level of commitment as high as possible, through bonuses and career
opportunities.

The last driver is the alignment of objectives. It's important that the
personal goal of each worker is aligned with the company's strategy, giving
them a common objective. Starbucks is able to align the objectives thanks
to the organization of committees and the distribution of stock options for
the manager staff.
Group 4

1. Customer Measures
Existing Market (US)
Increase loyalty

SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
MEASURES
1. Customers
1. Customers

MEASURES
2. Financial

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

Number of cards given per year

Customer survey loyalty survey
Number of accounts created on website per year

Increase satisfaction
Customer survey satisfaction rating
Number of complaints per year
Average time spent in the store per customer

Increase sense of community

Number of new accounts on website per year
Number of participants to events organized by Starbucks
Number new fan on facebook per year

Increase customer profitability

Number of products per receipt
Number of purchases per week

New Market (Europe , Middle East and Asia)

Increase market share
Percentage market share
Total sales to new customers
Total sales per new store

Reputation
Environmental effort *
Percentage of stores built following the LEED certification*
Percentage of beverages served in reusable cups (objective: 25% by 2015)
Percentage of water consumption reduction (objective: 25% by 2015)

Create the 3rd place

Group 4

Average time spent in the store per customer

2. Financial Measures

Revenue growth
- Increase the number of new products
% of revenues from new products introduced in 2010
% of revenue from licensed branded products (4% in 2010)
% of revenue from food (23% in 2010)
Number of pruduct in product portfolio
- Attract new customers and enter new markets
% of revenues from new stores in US
% of revenues from new stores abroad
revenues resulting from new customer loyalty cards issued
- Change to a more profitable product /service mix
Store sales growth % (open 13 month or longer)
Operating income by segment(US, International and Global CPG)
Gross profit margin (sustainability of business, success of pricing strategy and
market acceptance of product-differentation strategy)

Cost reduction
- Reduce product/service cost per unit
% reductions in cost per unit(cost of features, cost of quality, efficency of internal
process ,customization, investment in R&D and investment in plant and
equipment)
- Reduce selling/general adminstration costs
% reductions in selling and administration costs
Asset utilization
- Improve asset utilization
ROI
Residual income
Economic value-added (EVA)
Group 4

SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

MEASURES
MEASURE
2.
Financial
S2.
Financial
MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

3. Internal Process
Measures
Enhance Customer Relationship
Increase service efficiency and quality

SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

MEASURES
2. Financial

MEASURES
3.
3. Internal
Internal
Process
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

Average number of customers served per day

Number of complaints resolved daily
Percentage of loyalty card holders coming in daily

- Improve complain resolution service

Percentage of complaints answered
Number of complaints received per day
Mapping of recurring complaints

Enhance Supplier Relationship

Increase long term relationships
Number of suppliers
Average length of contract
Increase in price in specific countries due to bad weather conditions

Increase quality and yield of coffee

Volatility of coffee price
Quantity sold by each supplier
Number of experts in each Farmers Support Centers
Difference in productivity by farm with Farmers Support Centers and other farms

Operations
Decrease process cost and time
Average cost of processing
Quantity of coffee processed daily
Average time of processing

Increase process efficiency and quality

Percentage of samples not compliant with our quality standards after processing
Amount of coffee processed per roasting facility
Number of employees per roasting Group
facility 4

11

4. Learning and Growth

Measures
SWOT
The Strategy

DRIVERS
The
Objectives

MEASURES
1. Customers

Enhance Employee Capabilities

Improve quality of training
Number of hours of training per year
Training satisfaction survey rating
Employee evaluation form rates

Attract and retain quality employees

Revenues per employee
Number of extra hours per employee
Customer satisfaction survey rate

MEASURES
Enhance Employee Motivation
2. Financial
Maintain high level of motivation

MEASURES
3. Internal
Process

MEASURES
4. Learning &
Growth

STRATEGI
C MAP

Employee satisfaction survey

Career opportunities
Average bonuses and rewards per employee
Stock option per manager

Alignment of Objectives
Alignment of employees objectives with overall strategy
Stock options
Number of committees meetings per year
Group 4

12

Strategy Map
MISSION: to inspire and nurture the human spirit one

person, one cup and one neighborhood at a time

SWOT
The Strategy

CUSTOM
ER

DRIVERS
The
Objectives

MEASURES
1. Customers

FINANCIA
L

MEASURES
2. Financial

MEASURES
3. Internal
Process

MEASURES

INTERNA
L
PROCESS

4. Learning &
Growth

STRATEGI
STRATEGI
C MAP
C MAP

LEARNIN
G&
GROWTH

Existing Market
Increase loyalty
Increase satisfaction
Increase sense of
community
Increase customer
profitability
Revenue Growth
Increase number of
new products
Change to a more
profitable product
/service mix
Attract new customers
and enter new markets

New Market
Increase market
share

Cost Reduction
Reduce
product/service cost
per unit
Reduce
selling/general
adminstration costs

Enhance Customer
Relationship
Increase service
efficiency and quality
Improve complaint
resolution service

Enhance Supplier
Relationship
Increase long term

relationship
Increase quality

and yield of cofee

Enhance Eployee
Capabilities
Improve quality of
training
Attract and retain
quality employees

Enhance Employee
Motivation
Maintain high level

of motivation

Reputation
Environmental
effort
create the third
place

Asset Utilization
Improve asset
utilization

Operations
Decrese process
cost and time
Increase process
efficiency and
quality

Enhance Employee
Alignment
Alignment of

employees