After announcing last week that they were closing 600 stores nationwide, Starbucks Corporation (NASDAQ: SBUX) has announced the next step in its multi-faceted plan to transform the company today. A surprise merger with the leading car safety device and vehicle security firm, Onstar, is a surprising mash-up that has investors raving about the positive effect on both companies’ stock prices.
“In January, we committed to transforming the company through a series of critical and strategic initiatives to improve the current state of our U.S. business and build the business for the long term,” stated Howard Schultz, chairman, president and CEO. “Our executive and field leadership teams conducted an extensive review of our U.S. company-operated store portfolio with a goal of enabling our organization to focus its efforts on areas where we can more effectively improve the customer experience. To that end, we proudly announce OnStarbucks.”
“Our 11 years of experience have taught us that life happens when you’re driving,” said OnStar President Chet Huber. “The value of OnStarbucks combines the powerfully-simple technology of OnStar’s in car emergency support with the leading specialty coffee store, providing added flexibility for our subscribers. In emergency situations - a car accident, being locked out of your car, being lost in strange city - stress levels of our subscribers increase. The new OnStarbucks service will allow them to order a double Mocha Frappacino to help them through these difficult times.”
With this simple announcement, the markets have seen a quick uptake on Starbucks and OnStar stocks, which has led to further product extension announcements, include PronStar (the ability to deliver adult material directly to vehicles) and FourBucks (a concept store where every coffee drink only costs $4).
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world - and now in your car. Through their unwavering commitment to excellence and our guiding principles, they bring the unique Starbucks Experience to life for every customer through every cup and every automobile. To share in the experience, please visit them in our stores, online at www.starbucks.com or just hit your convenient OnStarbucks button in your vehicle.
About OnStar by GM
OnStar, a wholly-owned subsidiary of General Motors, is the leading provider of in-vehicle safety, security and communication services. OnStarbucks is available on more than 50 MY 2008 GM models and includes one year of service and four Venti Lattes (speciality milks and flavors will cost extra). OnStarbucks will become standard on nearly all GM retail vehicles in the United States and Canada by the end of 2008. OnStar provides services to more than 4.5 million subscribers in the U.S. and Canada. More information about OnStar can be found at www.onstar.com.
Forward-Looking Statements
This release contains forward-looking statements relating to the Cappucinos delivered in an emergency, including statements regarding the timing of delivery to OnStarbucks vehicles, charges and expenses relating to the rapid response of delivery of caffienated beverages and the related impact to drivers stress levels. These forward-looking statements, as well as the underlying estimates and assumptions relating to such statements, are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. In particular, Starbucks does not acknowledge the relation of too much caffeine with actual road rage or an increase in accidents, nor short-term memory loss that relates to the increase risk of losing one’s car keys. The company assumes no obligation to update any of these forward-looking statements.
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