From a Single Cafe' to Starbucks of Today

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The first Starbucks location opened in 1971 with the original location in Seattle Washington, the heart of Pike Place Market. Starting as a single shop specializing in high quality coffee and brewing products, the company grew to be the largest roaster in Washington with multiple locations until the early 1980’s. CEO Howard Schultz, recognized a great opportunity and began working with the founder Jerry Baldwin. After a trip to Italy to find new products, Schultz realized an opportunity to bring the café community environment he found in Italy to the United States and the Starbuck’s brand we all know today began to take form.
The company experienced rapid growth in 1992 by going public, and growing tenfold by 1997, with locations around the United States, Europe and Japan. Starbucks also began expanding its brand. With such a rapid expansion, Starbucks soon began facing its own struggles as sales started slipping in light of the recession. According to Melissa Allison, Starbucks’s started a new growth strategy: more revenue, lower costs. Starbucks closed 900 stores, eliminating 34,000 jobs. With this new strategy, Starbucks focus was on some of the areas that decreased risk with up-front investment.
Starbucks core competencies can be defined as high quality coffee and products at accessible locations and affordable prices, providing a community to share in the coffee drinking experience, and variety of choices. They also value ethics and good business practices and is a consistent leader, being voted number one of 2012’s most ethical businesses by Ethisphere magazine for the 4th year running (“Starbucks”). The business strategy of Starbucks' is a single business company, focusing on only coffee-related products and retail store...

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...ets that may be tempting. To avoid competitors such as McDonalds and other coffee chains, they will need to create new value innovation by enhancing the customer experience by investing in online content and interactivity. Rather than creating more new products, I think their strength lies in their brand and they should continue to grow that brand loyalty.

Works Cited

Starbucks. “Our Heritage.” Starbucks, 2010. Web. March 20 2014. http://www.starbucks.com/about-us/our-heritage
Allison, Michelle. “Starbucks has a new growth strategy — more revenue with lower costs.” Seattle Times. Seattle Times, 15 May 2010. Web. March 19 2014. http://seattletimes.nwsource.com/html/businesstechnology/2011861321_starbucksstrategy16.html
CNBC Business. (2011). How One Brand Changed the World.
Retrieved from CNBC Magazine website: http://www.cnbcmagazine.com/story

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