In according to the Balanced Scorecard methodology, the objective of the study is to prepare the strategy map of a Starbucks Coffee company.

1. 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)

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

3. SWOT Analysis
Strengths
SWOT
The Strategy
DRIVERS
The Objectives
MEASURES
1. Customers
MEASURES
2. Financial
MEASURES
3. Internal
Process
MEASURES
4. Learning &
Growth
STRATEGIC
MAP
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 Seattle’s 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
3

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
STRATEGIC
According to the strategy Starbucks is adopting, different drivers and
MAP
objectives can be identified for each one of the four perspectives.
Group 4

5. 1. Customer Drivers and
Objectives
SWOT
The Strategy
DRIVERS
The Objectives
According to this perspective, the most important to Starbucks, it’s
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
•
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
•
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 it’s public
image.
Group 4
MEASURES
1. Customers
MEASURES
2. Financial
MEASURES
3. Internal
Process
MEASURES
4. Learning &
Growth
STRATEGIC
MAP

6. 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:
•
MEASURES
1. Customers
MEASURES
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.
2. Financial
MEASURES •
3. Internal
Process
Cost Reduction, throughout a reduction of product/service cost per unit
(huge implementation of economies of scale and scope economies) and
administration costs.
MEASURES
4. Learning &
Growth
STRATEGIC
MAP
•
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 channel for more than one final product or raw material).
Group 4

7. 3. Internal Drivers and
Objectives
SWOT
The Strategy
DRIVERS
The Objectives
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
•
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.
MEASURES
1. Customers
MEASURES
2. Financial
MEASURES
3. Internal
Process
MEASURES
4. Learning &
Growth
STRATEGIC
MAP
Group 4

8. 4. Learning & Growth Drivers
and Objectives
SWOT
The Strategy
DRIVERS
The Objectives
This fundamental perspective focuses completely on the company’s 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.
•
MEASURES
1. Customers
MEASURES •
2. Financial
MEASURES
3. Internal
Process
MEASURES
4. Learning &
Growth
STRATEGIC
MAP
•
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

9. •
1. Customer Measures
Existing Market (US)
–
•
•
•
SWOT
–
DRIVERS
–
The Objectives
1. Customers
1. Customers
–
•
4. Learning &
Growth
STRATEGIC
MAP
Increase market share
•
•
•
3. Internal
Process
MEASURES
•
Number of products per receipt
Number of purchases per week
New Market (Europe , Middle East and Asia)
–
MEASURES
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
•
•
MEASURES
Customer survey satisfaction rating
Number of complaints per year
Average time spent in the store per customer
Increase sense of community
•
•
•
MEASURES
MEASURES
Number of cards given per year
Customer survey loyalty survey
Number of accounts created on website per year
Increase satisfaction
•
•
•
The Strategy
2. Financial
Increase loyalty
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
•
•
Average time spent in the store per customer
Average duration of the connection to the store wifi
Group 4
9

10. 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)
SWOT
The Strategy
DRIVERS
The Objectives
MEASURES
1. Customers
MEASURES
2. Financial
2.Financial
MEASURES
3. Internal
Process
MEASURES
4. Learning &
Growth
STRATEGIC
MAP
•
Group 4

11. 3. Internal Process Measures
•
Enhance Customer Relationship
–
•
•
•
SWOT
•
•
•
DRIVERS
•
1. Customers
–
2. Financial
•
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
•
•
•
4. Learning &
Growth
STRATEGIC
MAP
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
•
•
•
MEASURES
MEASURES
Increase long term relationships
•
•
•
MEASURES
Percentage of complaints answered
Number of complaints received per day
Mapping of recurring complaints
Enhance Supplier Relationship
–
MEASURES
3. Internal
Process
Average number of customers served per day
Number of complaints resolved daily
Percentage of loyalty card holders coming in daily
- Improve complain resolution service
The Strategy
The Objectives
Increase service efficiency and quality
–
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 facility
Group 4
11

12. 4. Learning and Growth
Measures
SWOT
•
– Improve quality of training
The Strategy
•
•
•
DRIVERS
•
•
•
MEASURES
MEASURES
•
4. Learning &
Growth
Enhance Employee Motivation
•
•
•
•
MEASURES
MEASURES
Revenues per employee
Number of extra hours per employee
Customer satisfaction survey rate
– Maintain high level of motivation
2. Financial
3. Internal
Process
Number of hours of training per year
Training satisfaction survey rating
Employee evaluation form rates
– Attract and retain quality employees
The Objectives
1. Customers
Enhance Employee Capabilities
•
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
STRATEGIC
MAP
Group 4
12

13. Strategy Map
MISSION: “to inspire and nurture the human spirit – one person, one cup
and one neighborhood at a time”
SWOT
CUSTOMER
The Strategy
DRIVERS
•
•
•
•
The Objectives
MEASURES
FINANCIAL
1. Customers
•
MEASURES
•
2. Financial
MEASURES
3. Internal
Process
INTERNAL
PROCESS
MEASURES
4. Learning &
Growth
STRATEGIC
STRATEGIC
MAP
MAP
•
LEARNING
& 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
Enhance Customer Relationship
Increase service efficiency
and quality
•
Improve complaint resolution
service
•
•
•
•
Enhance Eployee Capabilities
•
Improve quality of training
•
Attract and retain quality
employees
•
•
•
New Market
Increase market share
Cost Reduction
Reduce product/service
cost per unit
Reduce selling/general
adminstration costs
Enhance Supplier
Relationship
Increase long term
relationship
Increase quality and
yield of cofee
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