下载

We were invited to open up a store there. We did it very well. And then all of a sudden it was reported by a local blogger that perhaps we were being disrespectful of the history and culture of China. And I think // for us as soon as that occured, you know we took a step back and said we don't wanna do anyting that will delude the integrity of the heritage and culture of the Chinese people. And if they want us to leave, we will leave. And I think we did that very respectfully and walked away. And I think many other companies probably fought it but we didn't. And there's lots of opportunities for us. We don't want to do anything that would be inconsistent with how people would view an outsider. I'd like to offer the stuff now to our audience here the Chianren International Business School and our first question today comes from Robert Zhang. Robert.

OK. Thank you. I'm Robert // CEIBS first year student. I want to ask you a question about the price. Price? Yeah. Starbucks' products are expensive but it also means a fashionable experience, right? So can you tell me the reason can you tell me why people want to keep and want to get some premium?

I wouldn't say Starbucks' coffee is expensive. I would say it's a premium product in a premium price based on what it is we deliver to the consumer. And the price of coffee that we buy significantly higher in price than most people in the coffee business. And then in terms of what it is we do to deliever on the experience, people really do feel that there is good value for the experience and what happens in the Starbucks store.

Hi, I'm Aleksandra Krainski CEIBS exchange student from Germany. And we know that China is a nation of tea drinkers. How do you make it a nation of coffee drinkers and have you ever thought of adding a tea change to your business in Starbucks view?

Another good question. Here we know where they come from.

I think it's I was talking about coming to China and being respectful of the heritage here. Starbucks is not coming to China to displace the love that people have for tea. We are coming to China to creat a complementary beverage experience. So we have been in the tea business for over 30 years, but it's less than 1% of our sales. I don't think that there's an economical model that I can see for traditional tea store in our future.

Let's go to Sher Le now. Sher Le? My question is we put up the cappucino and other products introduced I was wondering what products have not needed or any idea that it did not work?

I'll give you one idea that is a big failure, and it was my personal idea. A few years back I had the brilliant idea that we should publish our own magazine. And you know a paper look like a great opportunity. All the people coming to our store, we see them reading and we sell lots of newspapers in our stores. Why don't we just create our own magazine? You know there's hundreds magazines or thousands of magazines out there that are fantastic. Not good enough for us, we'll do // our own. And we've got great partner. And it was timing. And we invested millions of dollars. fantastic-looking magazine, great editor and no one bought it. And we lost our shirt. And I have a rack of those magazines sitting permanently in my own office to try and remind myself and others a very important I think business lesson and that is, it's one thing to learn from your mistakes but sometimes you have to celebrate them. And one thing I do not want to do at Starbucks is it has the kinda failure where we start discouraging creativity and entrepreneurship. I'm very fond of encourging our people to recognize our success is not an entitlement. It has to be earned. And we have no rights to enduring sucess unless we continue to be relevant and close to the consumer. But there's a real balance here. The world is changing so quickly and the consumer have so many choices and that the important thing is not only staying relevant but the important thing is preserving and enhancing your core business. So that it is not deluded by other things that you do. And this is an art not a science.