8/5/2012

Starbucks Balanced
Scorecard Project

Starbucks BSC - Agenda

•Company Overview
•Purpose of Starbucks BSC
•Starbucks Strategy at the Store Level
•Starbucks BSC
•Causality Relationships for the Proposed BSC
•Consequences of New BSC
•Feasibility of Proposed Metrics
•Conclusion

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Company Overview
Established in 1971, since then have grown to become the leading retailer,
roaster, and brand of specialty coffee in the world with locations in North America,
Latin America, Europe, Middle East, and Asia Pacific.

AS OF 2006
•Net revenue 7.8 Billion
•Net earnings 564 Million
•Earnings per common share diluted $0.71
•Number of countries Starbuck’s is located in 37
•Total retail stores world wide (excluding franchises) 12,440
•Number of partners (employees) worldwide 145,800

BSC Purpose
The purpose of this BSC is to develop
metrics that allow individual Starbuck’s
stores to measure current performance as
they align with the overall store strategy.
This scorecard incorporates both lagging
and leading metrics to create a holistic
view of performance as it pertains to the
Cybernetic Feedback Model.

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Starbuck’s Individual Store Strategy

1. To provide a clean and comfortable store

experience with consistent quality products
and service
2. Contribute positively to our communities &
environment
3. Provide a great work environment and treat
each other with respect and dignity
4. Recognize that profitability is essential to
success

• Source: Starbucks CSR brochure, tailored to the store level

Balance Scorecard

FINANCIAL
PERSPECTIVE

CUSTOMER Starbuck’s INTERNAL PROCESS

PERSPECTIVE PERSPECTIVE
Strategy

LEARNING AND GROWTH

PERSPECTIVE

3

LEARNING & GROWTH
GOAL
Knowledgeable Employees •Test scores on completed training units
Employee Satisfaction
1. Quality products/service
CUSTOMER PERSPECTIVE
GOAL
Customer Satisfaction-
Product Mix
Customer Satisfaction-
Product (Drinks,
pastries, etc.)
Customer Satisfaction-
Service
Continuous Community
Involvement
1. Quality products/service
8/5/2012
MEASURE STRATEGY
ALIGNMENT
•Strategy 1, 3, 4
(Leading)
• Number of products tested (Leading)
•Number of training sessions completed
(Leading)
•Number of employee suggestions
submitted (Lagging)
•Employee work referrals (Leading) •Strategy 1, 2, 3, 4
•Length of employee tenure (Lagging)
•Percent employee absenteeism (Lagging)
•Employee satisfaction surveys (Lagging)
LEGEND
Starbucks Store Strategy
2. Contribute to communities 3. Great work environment 4. Profitability
MEASURE STRATEGY
ALIGNMENT
•Survey (Lagging) •Strategy 1, 4
•Percent total sale of new
products (Lagging)
•In Store audits (Leading) •Strategy 1, 4
•Number of returned drinks
(Lagging)
•Number of complaints •Strategy 1, 3, 4
(Lagging)
•Number of projects/month •Strategy 2, 4
(Leading)
•Number of volunteer
hours/month (Leading)
LEGEND
Starbucks Store Strategy
2. Contribute to communities 3. Great work environment 4. Profitability
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INTERNAL OPERATIONS
Goal Measure Strategy
Alignment
Minimize Solid Waste •Number of customers using their own •Strategy 2
mug (Both)
•Internal audit of solid waste (Lagging)
•Percentage of products packaged in
recycled/recyclable materials (Leading)
Initialize Quality Assurance •Randomly take temperatures of hot •Strategy 1, 4
drinks (Both)
•Test employees product knowledge
(Leading)

Maintain a Clean, Safe, and •Perform and document cleaning and •Strategy 1, 4
Orderly Store maintenance inspections hourly (Leading)
•Injury rate per hours worked (Lagging)

LEGEND
Starbucks Store Strategy
1. Quality products/service 2. Contribute to communities 3. Great work environment 4. Profitability

FINANCIAL PERSPECTIVE
Goal Measure Strategy Alignment

Achieve Profitable YoY •YoY net revenue growth •Strategy 1, 3, 4

Growth (Lagging)
•YoY Operating Margin
Growth (Lagging)
•Revenue per employee
(Lagging)

Make a Meaningful •Measure % of net revenue •Strategy 1, 2, 3

Contribution to the going to community
Community (Leading)

LEGEND
Starbucks Store Strategy
1. Quality products/service 2. Contribute to communities 3. Great work environment 4. Profitability

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Causality Relationships for Strategic

Objectives

Contribute positively to our communities and environment

Contribution Profitable
to the
Financial Growth
community

Continuous
Customer Community
Involvement

Internal Minimize
Solid Waste

Employee
Learning/ Satisfaction
Growth

Causality Relationships for Strategic

Objectives
Provide a great work environment and treat each other with respect and dignity

Profitable
growth
Financial

Customer
Customer Satisfaction-
Service

Maintain a
Internal clean, safe, and
orderly store

Learning/ Employee Knowledgeable

Growth Satisfaction employees

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Causality Relationships for Strategic

Objectives
To provide a clean and comfortable store environment with consistent quality
products and service
Profitable
growth
Financial

Customer Customer
Customer Satisfaction- Satisfaction-
Product Service

Maintain a
Internal Minimize Solid Initialize Quality clean, safe, and
Waste Assurance orderly store

Learning/ Employee Knowledgeable

Growth Satisfaction employees

Causality Relationships for Strategic

Objectives

Recognize that profitability is essential to success.

Profitable
growth
Financial

Customer
Customer Satisfaction- Product Mix
Service

Maintain a
Internal Minimize Solid Initialize Quality clean, safe, and
Waste Assurance orderly store

Learning/ Knowledgeable
Growth employees

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Consequences and Behavior Changes

RELEVANT STAKEHOLDERS

• PARTNERS/EMPLOYEES
– Conflict between commitment/expectations of employees and
compensation
• ex. A barista getting paid minimum wage may not feel the need to
put forth extra effort/time into community service
• SHAREHOLDERS
– Setting profitability as a strategy illustrates to shareholders that
Starbucks is keeping them in mind
• CUSTOMERS
– BSC will ensure consistent quality for the customer for each visit

Questions…

FINANCIAL INTERNAL

• Achieve • minimize solid waste

Profitable YoY • initialize quality assurance
Growth • maintain a clean, safe, and
• Make a orderly store
meaningful
contribution to
the

community

CUSTOMERS LEARNING & GROWTH

• customer satisfaction - product mix • knowledgeable employees
• customer satisfaction - product • employee satisfaction
(drinks,
pastries, etc.)
• customer satisfaction - service
• continuous community involvement