SEATTLE Starbucks Announces Strategic Initiatives to Increase Shareholder Value; Chairman Howard Schultz Returns as CEO Renewed Focus

on Customer Experience and Innovation; Starbucks to Slow U.S. Store Growth and Accelerate International Expansion Conference Call with Financial Community to be Held at 5:30 p.m. EST Today The Board of Directors of Starbucks Coffee Company (NASDAQ:SBUX) today announced a series of initiatives aimed at driving shareholder value by refocusing the Company on providing customers with the distinctive Starbucks Experience and building on Starbucks legacy of innovation. To accomplish this objective, the Board has appointed Howard Schultz, chairman, to take on the additional role of chief executive officer, effective immediately, replacing Jim Donald, who is leaving the Company. Howard is the architect of the Starbucks brand and the visionary behind the unique customer experience that is at the heart of this remarkable companys success, said Craig Weatherup, chairman of the Starbucks Boards Nominating and Corporate Governance Committee. Given what the Board believes needs to be done, there is no better person to drive change and ensure that Starbucks is positioned to innovate, execute and relentlessly focus the entire organization on the customer. Schultz served as chief executive officer of the Company from 1987 to 2000. During that period, the Company went public in 1992 and enjoyed exceptional U.S. and international growth. From 2000 onward, in his role as chairman, Schultz focused on the Companys global strategies and expansion, which now includes a significant and growing presence in 43 countries. As chairman and chief executive officer, he will be responsible for the overall strategic direction of the company, with a predominant focus on everything that touches the customer. Martin Coles, chief operating officer, will work closely with Schultz and have oversight responsibility for all operational aspects of the business. I am enthusiastic about returning to the role of chief executive officer for the long term and excited to lead Starbucks and its dedicated partners (employees) to even greater heights of achievement on a global basis, Schultz said. We must address the challenges we face and we know what has to be done. Put simply, we are recommitting ourselves to what has made Starbucks and the Starbucks Experience so unique: ethically sourcing and roasting the highest quality coffee in the world; the relentless focus on the customer; the trust we have built with our people, and the entrepreneurial risk-taking, innovation and creativity that are the hallmarks of our success. Schultz stated that his agenda will include: - improving the current state of the U.S. business by refocusing on the customer experience in the stores, new products and store design elements, and new training and tools for the Companys store partners to help them give customers a superior experience; - slowing the Companys pace of U.S. store openings and closing a number of underperforming U.S. store locations, enabling Starbucks to renew its focus on its storelevel unit economics; - re-igniting the emotional attachment with customers and restoring the connections customers have with Starbucks coffee, brand, people and stores; - re-aligning Starbucks organization and streamlining the management to better support customer-focused initiatives and reallocating resources to key value drivers; and - accelerating expansion and increasing the profitability of Starbucks outside the U.S., including by redeploying a portion of the capital originally earmarked for U.S. store growth to the international business.

Taken together, these initiatives will help transform Starbucks and drive the Companys enduring success. We know that we can improve our performance by getting back to the essence of what drove Starbucks past success our passion for the business and a complete focus on the customer and our relationship with our people. In doing so, we will rely on the continued efforts and dedication of our partners all around the world, who have and will continue to contribute so much to the Starbucks success story, commented Schultz. Starbucks will provide further details about its updated store growth strategy and other actions during its 2008 first quarter earnings call on January 30, 2008. Schultz stated that there are no one-shot solutions or overnight fixes, rather success lies in rigorous execution of the objectives he outlined for the Company. The position we hold today in our customers and partners hearts and souls all around the world is not an entitlement. We must earn the trust of our customers every day by how we conduct our business, how we treat each other as people and how we act as a responsible corporate citizen. We remain committed to providing health care for all full and part-time partners, executing our best-in-class Corporate Social Responsibility efforts, and encouraging our coffee suppliers to participate in our C.A.F.E. (Coffee and Farmers Equity) practices program in our origin countries. On behalf of the Board and all Starbucks partners, I would like to thank Jim Donald for his numerous contributions to our Company. Jim was a passionate and tireless advocate for our brand, and we wish him success in his future endeavors, concluded Schultz. Widely known as the architect of Starbucks brand image, Howard Schultz joined Starbucks Coffee Company as director of operations and marketing in 1982, when the Company had only four stores. In August 1987, Schultz purchased Starbucks Coffee Company. Under Schultzs leadership, Starbucks was one of the first companies in North America to offer two unique benefits to its eligible full- and part-time partners: healthcare benefits, and grants in the form of stock options, called Bean Stock. In June 1992, Starbucks was the first specialty coffee company to become a public company and is now the leading retailer, roaster and brand of specialty coffee in the world. In addition to its retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, Starbucks sells coffee and tea products through its specialty operations, and licensed stores. Conference Call with Financial Community The Company will host a conference call for the financial community today at 5:30 p.m. (EST) to discuss the announcement. The call will be available as an audio webcast through the Investor Relations section of the Companys website at http://investor.starbucks.com. Following todays call, the Companys next conference call will be to discuss its financial results for the 2008 first quarter as well as to provide further details on its store growth strategy and other actions. The call will be held on Wednesday, January 30, 2008, following the issuance of its 1Q08 financial results press release. About Starbucks Starbucks Coffee Company provides an uplifting experience that enriches peoples lives one moment, one human being, one extraordinary cup of coffee at a time. To share in the experience, visit www.starbucks.com.

Forward-Looking Statements This release includes forward-looking statements about recent trends in the companys

business and the companys future business plans, initiatives and objectives. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors including, but not limited to, coffee, dairy and other raw material prices and availability, successful execution of internal performance and expansion plans, fluctuations in U.S. and international economies and currencies, the impact of initiatives by competitors, the effect of legal proceedings, and other risks detailed in the companys filings with the Securities and Exchange Commission, including the Risk Factors section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2007. The company assumes no obligation to update any of these forward-looking statements.

Business Opportunities Does Starbucks Franchise? Starbucks does not franchise operations and has no plans to franchise in the foreseeable future. In North America, the majority of our stores are Company-operated. As an exception, Starbucks may enter into licensing arrangements with companies who provide access to real estate which would otherwise be unavailable such as airport locations, national grocery chains, major food services corporations, college and university campuses and hospitals. For international business development opportunities please refer to the International Development section of this Web site. If you have further questions, please send us an e-mail through the Contact Us portion of the site. How can my business serve Starbucks coffee and products? Starbucks offers a variety of programs customized to meet the needs of various Food Service venues, such as cafes. For information and to submit a profile, please refer to our Foodservice section on Starbucks.com or you may contact Starbucks Business Alliances group at 800-344-1575. How can I lease property to Starbucks? If you are interested in leasing property to Starbucks, please refer to the Contact Us section of our Web site. We will direct your inquiry to the Store Development representative in your area. How can I request that a Starbucks store open in my neighborhood? Please refer to the Contact Us section of our Web site to let us know of your interest for a new Starbucks store in your community Starbucks Coffee International As we move into new markets all over the world, we continue to build our brand through the delivery of the Starbucks Experience. Our success at every market that we have entered into reiterates our commitment to become a great, enduring company with the most recognized and respected brand in the world, known for inspiring and nurturing the human spirit. Our Mission To be a global company, making a difference in peoples' lives by leveraging our brand and the coffee experience to foster human connections. International Business Development Our development strategy adapts to different markets addressing local needs and requirements. We currently use three business strategies:

joint ventures, licenses, and company-owned operations. We have developed this section of our Web site to address inquiries from individuals, organizations, and corporations interested in exploring opportunities with us in international markets. We thank you in advance for your interest in our international operations and development.

Starbucks Coffee has existing partnerships with the following markets:

Australia

Indonesia

Peru

Austria

Ireland

Philippines

Bahamas

Japan

Puerto Rico

Bahrain

Jordan

Qatar

Brazil

Kuwait

Saudi Arabia

Canada

Lebanon

Singapore

Chile

Malaysia

South Korea

Cyprus

Mexico

Spain

France

New Zealand

Switzerland

Germany

Oman

Taiwan

Greece

People`s Republic of China (Beijing)

Thailand

Hawaii People`s

Turkey

Hong Kong S.A.R.

Republic of China (Shanghai)

United Arab Emirates

People`s Republic of China (Southern China)

United Kingdom

United States

A global company The Starbucks Experience is about passion for a quality product, excellent customer service, and people. With nearly 3000 coffeehouses in 37 countries, it is clear that our passion transcends language and culture. Since our international journey began in 1996 with our first coffeehouse in Tokyo, "we have been amazed by the global acceptance and visibility of our brand in all our international markets," says Howard Schultz, chairman and chief global strategist. International Business Partnership Our global success would not be possible without our international partners, who share in our values and commitment to bringing the Starbucks Experience to customers worldwide. How we choose partners is critical to our success:

Shared values and corporate culture

Strategic fit

Seasoned operator of small-box, multi-unit retail

Sufficient Financial and Human Resources

Involved and committed top management

Real Estate Knowledge and Access

Local Business Leader

Strong track record developing new ventures

Experience Managing Licensed & Premium Brands and Concepts

Leverageable Infrastructure

Food & Beverage Experience

Local relevance "We remain highly respectful of the culture and traditions of the countries in which we do business," says Howard Schultz. "We recognize that our success is not an entitlement, and we must continue to earn the trust and respect of customers every day." A smart move. Bringing one of the world's most admired brands into your business is good for them and good for you! To offer Starbucks coffee in your break room, click here To offer Starbucks in your cafeteria, employee dining venue or catering program, click here To purchase Starbucks Cards for your employees or clients, click here

The Gift of Starbucks Whether youre thanking a faithful client or rewarding a job well done, the Starbucks Card is the perfect gift for every business occasion.

Increasing the value Enhance your customers experience with the quality of Starbucks coffee and Tazo Tea. Hotels Colleges and Universities Business and Industry Cafeterias Healthcare Other Foodservice Venues Find out more Note: Not all programs are available outside of the continental United States.

Get Starbucks coffee delivered to your office, no matter what size. Large or small, Starbucks Office Coffee has a solution for your office coffee and tea needs. Choose from a variety of Starbucks coffees and Tazo teas, in addition to other breakroom needs such as hot cocoa, Starbucks branded paper products and amenities. Find out more.

A qualified high volume/high traffic retail or foodservice operation can own and operate a Starbucks licensed store. Examples include: hotels and resorts, healthcare, college and university campus environments and business and industry. Find out more

The quality of Starbucksthe convenience of your grocery store Whether it's whole bean coffee, Frappuccino coffee drink, or our delectable ice cream, you're sure to get Starbucks superior quality wherever you shop.

Starbucks Chocolate Discover the experience of premium chocolates infused with the flavors of our coffeehouse. Starbucks Coffee Starbucks House Blend, Sumatra, Caff Verona. Just three of the many varieties of Starbucks coffees that are now available where you buy groceries. Starbucks Ice Cream Love at first bite! Made from the finest ingredients, Starbucks ice creams come in an array of flavors, and are a perfect treat any time. Frappuccino Coffee Drink We took a great thing and made it even better. Now you can have a delicious, creamy Frappuccino coffee drink any time, anywhere.

It gets you going Start your day with a Starbucks DoubleShot. Perfect for those of you who take your coffee to go. The delicious combination of Starbucks espresso and rich cream conveniently packaged for your busy lifestyle. Bring on the day!

Questions or comments? Contact us

Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.

The following six guiding principles will help us measure the appropriateness of our decisions: Provide a great work environment and treat each other with respect and dignity. Embrace diversity as an essential component in the way we do business. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time. Contribute positively to our communities and our environment. Recognize that profitability is essential to our future success.

Starbucks is committed to a role of environmental leadership in all facets of our business. We fulfill this mission by a commitment to: Understanding of environmental issues and sharing information with our partners. Developing innovative and flexible solutions to bring about change. Striving to buy, sell and use environmentally friendly products. Recognizing that fiscal responsibility is essential to our environmental future. Instilling environmental responsibility as a corporate value. Measuring and monitoring our progress for each project. Encouraging all partners to share in our mission.

Embracing our differences Aside from extraordinary coffee, Starbucks has made a business out of human connections, community involvement and the celebration of cultures. And so, its

only natural that as a guiding principle, diversity is integral to everything we do. The word diversity means many things to different people. We see diversity as all the ways we differ and are the same. This concept encompasses, but is not limited to, human differences with regard to race, ethnicity, gender, culture, and physical ability. In addressing diversity, we also consider issues like tenure, style, and our individual roles within the company. Just as critical to our success as a global company is the idea of inclusion, defined as a combination of differences and similarities in the pursuit of new ideas and individual relationships made everyday. Putting diversity into practice Talking about diversity is important. Acting on it is essential. Creating a place for customers to feel welcome, providing equal opportunities and benefits to every one of our partners (employees) and working with minority or women owned businesses are among the ways we meet and set new goals for an inclusive business. While we serve coffee to the entire world, we strive to meet and respect the interests of our local communities. Our partnership with Magic Johnsons Urban Coffee Opportunities helps introduce Starbucks to ethnically diverse communities throughout the country, providing even more places for people to connect. Partnering with Starbucks Coffee Company Starbucks strives to make a positive impact locally, nationally and globally. In fact, it's so important to us that one of our six Guiding Principles is, "Contribute positively to our communities and our environment." In this spirit, Starbucks proudly supports organizations in our local communities with cash and product contributions through corporate giving, The Starbucks Foundation, regional grant programs, regional marketing offices, and our stores. Contributing at the Regional and Local Level While we realize that there are many organizations that offer beneficial services to the community, we have chosen to only support local community organizations and events that promote one of the following: Arts and culture Education Environment If one of these describes your organization or event, please complete the Eligibility Quiz to see if your donation or sponsorship request meets our local and regional requirements. Requests must be received 12 weeks in advance of the event date. Before applying, please review the areas to which we do not contribute. It's also important to note that Starbucks only reviews and responds to unsolicited requests received through our online system. Unsolicited faxed or mailed donation or sponsorship requests will not be reviewed. Contributing Nationally and Internationally Starbucks and our partners (employees) contribute to many national and international organizations by: Matching the cash donations of partners and contributing monetarily when a partner gives of his or her time Supporting youth education programs that benefit diverse and underserved

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communities through The Starbucks Foundation Supporting environmental initiatives that help reduce our environmental impact and build awareness in our communities Leading and contributing to projects that support coffee and tea-producing communities To learn more about how we support communities around the globe, please visit our Corporate Social Responsibility page. Starbucks is not currently seeking additional opportunities for partnerships or national sponsorships.

Doing Business in a Different Way Contributing positively to our communities and environment is so important to Starbucks that its one of the six guiding principles of our mission statement. We work together on a daily basis with partners (employees), suppliers and farmers to help create a more sustainable approach to high-quality coffee production, to help build stronger local communities, to minimize our environmental footprint and to be responsive to our customers health and wellness needs.

CSR Annual Report We believe in communicating openly and honestly with our stakeholders about our business practices and our social and environmental initiatives. Please review our Corporate Social Responsibility Annual Report 2006 and share your opinion through our reader survey.

Were proud to support the following organizations:

Quick Links Good Coffee, Doing Good Promoting a sustainable model for coffee production and trade. Environmental Affairs Focused on minimizing our environmental impact.

African Wildlife Fund Promoting coffee quality, environmental sustainability and natural resources conservation in east Africa.

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Save the Children Addressing the educational needs of indigenous Mayan peoples dependent on coffee production.

In Our Communities Working to improve the communities we call home. Supplier Diversity Working with qualified diverse suppliers. Starbucks Foundation Helping to inspire discovery and opportunity in local communities. Our Investments Putting our money where our heart is.

Mercy Corps Improving childrens health in coffee- and teaproducing regions. Featured Items > Starbucks Gift Ideas > Black Apron Exclusives > Holiday/Seasonal > Kona Coffee > Syrups Equipment > Brewing Equipment > Serveware Starbucks Coffees > Starbucks Coffees > Starbucks Decaf Coffees > All Starbucks Coffees > Mild > Medium > Bold > Extra Bold > > > > > Ground Whole Bean Pods Filter Packs Portion Packs

Tazo Teas > Black Teas > Green Teas > White Teas > Herbal Infusions > Assorted > All Tazo Teas > Caffeinated > Decaffeinated > Caffeine Free

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Shipping Options & Rates At StarbucksStore.com, we understand how important it is that your packages arrive promptly. Below, you will find answers to common questions about our shipping policies and rates. 1. What are my shipping options and when will my order ship? 2. How are my shipping charges calculated? 3. Can I ship parts of my order to different addresses? 4. Can I ship my order using multiple shipping methods? 5. How long does my package take to arrive at its destination? 6. Does StarbucksStore.com service international destinations? 7. What if I live in Alaska, Hawaii, Puerto Rico or other US Territories? 8. What if I have an APO or FPO address? 9. What if I want to ship to a P.O. Box? 10. To which US territories does StarbucksStore.com ship? 11. Can I choose the carrier for my shipment?

1. What are my shipping options and when will my order ship? StarbucksStore.com offers 3 levels of delivery service to most destinations: Order Order placed: Mon - Sat Sunday Order placed: Before Noon PST After Noon PST Ships Usually ships: Next business day* Tuesday** Usually ships: Same business day* Next business day* Arrives+ 3-6 business days* (from shipping date) 2-3 business days* (from shipping date) Carrier

Standard

Express

Order placed: Before Noon PST Next Day After Noon PST

Usually ships: Same business day* Next business day*

Next business day* (from shipping date)

* Excludes weekends and holidays. * If Monday or Tuesday are holidays, order ships on Wednesday. * + Arrival time for shipments to Alaska, Hawaii, U.S. Territories, and APO/FPO addresses

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may vary. Some zip codes in the continental U.S. may also require extra time; if your shipment address will require extra delivery time we will notify you in your checkout process. 1 Not available for shipments to Alaska, Hawaii and U.S. Territories. 2 Will ship U.S. Postal Service if shipping to P.O. Boxes, Alaska, Hawaii, U.S. Territories, and APO/FPO addresses. 3 Not available to P.O. Boxes, Alaska, Hawaii, U.S. Territories (except Puerto Rico), and APO/FPO addresses.

2. How are my shipping charges calculated? Shipping charges are calculated based on the number of items being purchased. In order to provide the most economical shipping rates, orders must include a minimum of any 2 items. Please refer to the rate chart below for detailed shipping rates. Rates are as follows: Shipping to the 48 Contiguous States and APO/FPO Addresses Standard Express $6.50 Flat Rate Approximately $8.99/first pound + $1.00/each additional pound Actual shipping charges may be lower or higher. Pease check the cart for accurate information. Approximately $20.99/first pound + $1.00/each additional pound Actual shipping charges may be lower or higher. Please check the cart for accurate information.

Next Day

Shipping to Alaska, Hawaii and US Territories Standard Express Next Day $9.00 Flat Rate Please view shipping cost in the cart at checkout. Please view shipping cost in the cart at checkout.

To ensure that your packages are shipped in the most efficient manner, we use several carriers to ship our products. We take into account the weight of the packages and their destination when selecting the best carrier to use. Occasionally, we may upgrade your shipment method at no additional cost to you. 3. Can I ship parts of my order to different addresses? Unfortunately, we do not offer this option. You will need to place separate orders when needing to ship items to multiple addresses. 4. Can I ship my order using multiple shipping methods? Unfortunately, we do not offer this option. You will need to place separate orders when needing to ship items using multiple shipping methods. 5. How long does my package take to arrive at its destination? Orders are shipped Monday through Friday, excluding legal holidays. (Click here for more

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details). 6. Does StarbucksStore.com service international destinations? Currently, StarbucksStore.com ships to addresses in the United States and US Territories served by the US Postal Service and to APO/FPO addresses. 7. What if I live in Alaska, Hawaii, Puerto Rico or other US Territories? We offer three shipping methods for packages being delivered to Alaska, Hawaii and Puerto Rico (two shipping methods to other US territories) at the prices listed in the table above. However, delivery times may vary significantly from indicated times. 8. What if I have an APO or FPO address? Two shipping methods are available to APO and FPO addresses at the prices listed above. However, delivery times may vary significantly from indicated times. 9. What if I want to ship to a P.O. Box? All shipping methods except Next Business Day are available for shipments to P.O. Boxes. 10. To which US territories does StarbucksStore.com ship? Currently we ship to American Samoa, Federated States of Micronesia (Micronesia), Guam, Marshall Islands, Northern Mariana Islands, Palau, Puerto Rico, and the Virgin Islands. 11. Can I choose the carrier for my shipment? No. StarbucksStore.com uses a variety of carrier services to delivery packages, including UPS, DHL, and the US Postal Service. Unfortunately, there is no way for customers to request a specific shipper. The choice of carrier is determined by the level of service selected (Super Saver, Standard, Express, and Next Day), destination (shipping address). We will select the best carrier to keep our shipping charges as low as possible, while still maintaining the delivery expectations for the selected level of service. Once your order ships the carrier, ship date, estimated delivery date for your package(s) will be detailed in your shipment confirmation e-mail. Identifying, Applying, and Leveraging Core Competence Point Summary Books and Articles Kevin P.Coyne, Stephen J. D. Hall, Patricia Gorman Clifford, Is your core competence a mirage? McKinsey Quarterly, 1997, pp. 40-54. Core competence - the idea that a company can succeed without a structural competitive advantage by becoming the best at a few key skills or in a few knowledge areas - has enjoyed enormous popularity over the past 6 years. But despite all the attention this concept has received, its tangible impact on corporate performance has been mixed at best. To address the need for a more rigorous approach, an article proposes a clear definition of what a core competence is (and is not), and suggests how an executive in pursuit of a competence-led strategy is likely to prove worthwhile. It outlines 3 distinct paths to developing a competence - evolution, incubation, and acquisition. C. K. Prahalad and Gary Hamel, The Core Competence of the Corporation, Harvard Business Review. May/Jun, 1990, 68(3), pp. 79-91. In the 1990s, top executives will be judged by their ability to identify, cultivate, and exploit core competencies that make growth possible. They will have to rethink the concept of the corporation itself. The critical task for management is to create an

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organization capable of infusing products with irresistible functionality or creating products that customers need but have not yet imagined. Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies. A core competency has 3 identifying elements: 1. It provides potential access to a wide variety of markets. 2. It makes a significant contribution to the perceived customers benefits of the end products. 3. It is difficult for competitors to imitate. Senior management should spend a significant amount of time developing a corporate wide strategic architecture that establishes objectives for competence building. The location, number, and quality of the people who embody competence should be identified. Briance Mascarenhas and Alok Baveja, and Mamnoon Jamil, Dynamics of Core Competencies in Leading Multinational Companies, California Management Review, Summer, 1998. This article examines the core competencies of twelve leading multinational companies. It explores their competencies, how they were developed, and how they are shifting over time. Successful companies rely on three types of competencies: superior technological know-how, reliable processes, and close external relationships. Different approaches are needed to develop each types of competency. While these firms have historically relied on technological know-how and reliable processes, they are planning more close external relationships for the future. External relationships help these firms strengthen and extend their traditional competencies while responding to the demands of globalization, mass customization, enhanced quality, and rapid technological change. James Brian Quinn, Outsourcing innovation: The new engine of growth, Sloan Management Review, Summer, 2000, 41(4), pp. 13-28. Innovation calls for the complex knowledge that only a broad network of specialists can offer. That is why many companies are starting to outsource innovation. Four forces are enabling this change: 1. Demand is doubling every 15 years. 2. The supply of knowledge workers is skyrocketing. 3. Interaction capabilities have grown. 4. New incentives have emerged. The most effective companies, however, keep corecompetence activities in-house, outsourcing the rest to best-in-world suppliers. The challenges facing companies that outsource innovation are discussed. Helen Rheem, Technology: Core competence or diverse competencies? Harvard Business Review. Mar/Apr, 1995, 73(2), pp. 11. Professor Keith Pavitt and Senior Research Fellow Pari Patel of the Centre for Science, Technology, and Energy and Environment Policy at the University of Sussex, question whether large companies can even have core competencies when it comes to technology. Case Studies Mary M. Crossan and Ariff Kachra, Starbucks, HBS Case, 9-98M-006, 1999. Starbucks is faced with the issue of how it should leverage its core competencies against various opportunities for growth, including introducing its coffee in McDonalds, pursuing further expansion of its retail operations, and leveraging the brand into other product areas. The case is written so that students need to first identify where Starbucks' competencies lie along the value chain, and then assess how well those competencies can be leveraged across the various alternatives. Also

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provides an opportunity for students to assess what is driving growth in this company. Starbucks has a tremendous appetite for cash since all its stores are corporate, and investors are betting that it will be able to continue its phenomenal growth so it needs to walk a fine line between leveraging its brand to achieve growth and not eroding it in the process. More on Music and Mochas Mark, Scott, Hugh, Nathan, Simon, and Brand Examiner Paul's Mom all added interesting perspective with their comments to my original post regarding the Fast Company article on Starbucks reinventing itself through revolutionizing the retail music industry. With their comments in mind, further exploration of "Music and Mochas" is in order. Please don't misunderstand me, I applaud Starbucks for trying new things to make sure the brand stays relevant. The culture of Starbucks will never allow for complacency to seep in ... and that is a very good thing. What I find presumptuous is that burning music CDs will reinvent the Starbucks brand and that Starbucks believes they are poised to revolutionize the retail music business. It is still my contention that the brand does not need reinventing. However, the Starbucks brand does need to remain relevant and I suggest Starbucks do this through evolutionary means and not through revolutionary ways. There is still plenty of opportunity for the Starbucks brand to remain relevant and to further evolve the Starbucks experience by focusing on their core competency of coffee. I am not convinced that Starbucks should fall victim to lifestyle brand mentality and attempt to reinvent the brand by revolutionizing the retail music industry. Starbucks has fallen victim to lifestyle brand mentality before. In the mid-to-late 90s, the thinking throughout Starbucks upper management was, "our customers have given us permission to branch out into lifestyle areas beyond coffee." This thinking lead to disastrous results including: Mazagran - a failed carbonated coffee soda beverage from Pepsi and Starbucks. Joe Magazine - a lifestyle magazine from Time and Starbucks that lasted three issues. Caf Starbucks - a full scale restaurant that never expanded beyond three locations in Seattle. Circadia - a radically hipper version of a 'Starbucks' complete with a performance stage and alcohol coffee drinks. Circadia never connected with customers. E-Commerce and Internet Portals - Starbucks forged online and offline partnerships with Cooking.com, Living.com, Kozmo, and a handful of other internet companies. (Of course, Starbucks wasnt the only major 'bricks and mortar' retail chain to get caught up in the dot-com craze.) Books - Starbucks partnered with Oprah Winfrey to sell Oprahs Book Club selections as well as other books consistent with the 'Starbucks lifestyle.' After two years of sluggish sales, the partnership ended and Starbucks stopped selling books. Reading, Writing, Rhythm merchandise assortment - a failed attempt to reinvigorate slumping coffee-related merchandise sales by focusing on odd lifestyle products such as pencil sharpeners, leather bound journals, desk clocks, and other fancy office accessories. This merchandise approach lasted 10 months. Compare those failed revolutionary attempts to reinvent the brand with these evolutionary initiatives that have helped to bring new relevance to the Starbucks brand.

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 Frappuccino - Without cold blended coffee, Starbucks wouldnt be the success it is today. Frappuccino created an entirely new coffee category for Starbucks that helped to drive coffee sales and increase traffic during the hot summer months where previously the business was soft. Starbucks coffee on United Airlines - Before Starbucks was commonly available on every street corner, Starbucks partnered with United Airlines to not only improve airplane coffee, but also to sample the signature taste of Starbucks with millions of people who previously never had the opportunity to taste a richer, bolder cup of Starbucks coffee. (Admittedly, the relevance and importance of this partnership has faded since Starbucks has grown to nearly 10,000 locations world-wide.) Bottled Frappuccino - Taking the lessons learned from the failed Mazagran soda experiment, Pepsi and Starbucks went back to the drawing board and developed a ready-to-drink milk/coffee beverage that tasted more like a familiar iced latte than an unfamiliar ice-cold carbonated coffee soda. Whole Bean in Grocery stores - In the late 90s, Starbucks partnered with Kraft to offer whole bean coffee in the grocery channel a retail channel where something like 95% of all coffee is purchased. All of these successful initiatives clearly leveraged Starbucks core competency of coffee to bring new relevance to the Starbucks brand. And, they did it through evolutionary means and not by revolutionary ways. "Sometimes you have to leave home to realize how sweet home really is." That was a quote from a senior Starbucks executive following the companys last foray into failed lifestyle branded ventures. Which leads me to ask this question ... how far is Starbucks straying from home in their attempt to reinvent the brand by revolutionizing the retail music business?

I hope Starbucks remembers to bring some bread crumbs with them on their journey away from home

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