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0 Starbucks Fights French Resistance [Special] February 4, 2004

David and Tom Gardner recently interviewed Starbucks (Nasdaq: SBUX) CEO Orin Smith onThe Motley Fool Radio Show on NPR. Starbucks' stock has risen 60% over the last three years, a period in which the S&P 500 dropped 15%. This is the third of five parts. All previous parts are linked to the right.

TMF: Many people might say that the soul inside of the company machine is Howard Schultz, the founder of Starbucks in its modern incarnation. Howard is a past guest on The Motley Fool Radio Show. I am curious, what is Howard's relationship? Is he still doing international? What is his role at Starbucks today?

Smith: Howard's role is not really all that much different than it has been in the last 10 years. He has spent in recent years a little more time on the international markets because there is a lot of travel involved and it consumes a lot of time. So that has changed, but generally speaking, Howard involves himself in the creative side of this business and in some of the new ventures and opportunities where we have to continue to drive and grow the business.

TMF: You just opened your first two locations in France. France has a unique coffee culture. U.S.-Franco relations have been a little bit poor lately. Why do you think Starbucks will be a hit in France?

Smith: It is something that we are very cautious about. I don't think that there are ever any guarantees as we enter a market. We don't take anything for granted. We know that we have to deliver a superior experience as well as a great coffee in each and every market that we go into.

The challenge in France is that they tend to be more discerning than customers are in some markets and cynical about the kinds of food products that America can bring to France. What we know is that the French who have been here and who have experienced Starbucks would say it is a very good cup of coffee. We have that to bring to France, and we think we can offer the superb service levels and superb product we have every place else and that there is a place for us there amidst all the rest of the coffee alternatives that the French people have.

TMF: Orin, you are the president and CEO of Starbucks. Presumably there are other retail and food companies you admire and maybe learn from. Do you learn anything from McDonald's(NYSE: MCD), for example? Do you actively study other retail operations? Whom do you admire?

Smith: We do watch. We look at not only food companies, but we look at consumer products companies. Disney(NYSE: DIS) is a company that we admire. It is a brand we admire. Gap(NYSE: GPS), although it has fallen on hard times recently, is also a company whose innovativeness and retailing merchandising expertise is superb. Target(NYSE: TGT) is a company that has done extremely well. I have to say there is a vast difference between what Wal-Mart(NYSE: WMT) is and does and what we do -- I have to admire them as superb retailers in a lot of different ways. Those are just a few. Some of the brands that I think are similar to ours -- Nike(NYSE: NKE) is another one, by the way, that I also admire a lot. They have been extraordinarily innovative in a lot of the dimensions of their business. Those are ones I think come to mind immediately.

Tomorrow: Smith on drive-thrus and oversaturation.

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