Starbuck’s Strategy and Internal Initiatives to Return to Profitable Growth

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Case Summary In 1971, three academics, Jerry Baldwin, Zev Sigler, and Gordon Bowker, opened Starbucks Coffee, Team, and Spice in Seattle, Washington. They were inspired by the success of Peet’s Coffee and Tea in Berkeley, California. However, they focused on selling high-quality whole beans and coffee products, making the store was consistently profitable. By 1980, Starbucks had four locations in the Seattle area. In 1981, Howard Schultz, vice president and general manager of U.S. operations for a Swedish maker of coffee and kitchen equipment, visited Starbucks and was immediately enamored by the business philosophy and opportunity. For over a year Schultz pressed for a position at Starbucks and was finally hired in September 1982. However, Schultz’s vision to expand and reconstruct Starbucks conflicted with the owner’s desire to retain a retail focus. So, in 1986, Schultz struck out on his own and founded Il Giornale Coffee Company. The following year, Schultz acquired Starbucks for $3.8 million dollars when the owners decided to focus their attention on running Peet’s Coffee and Tea, which they had acquired in 1984. Howard Schultz names the new company Starbucks Corporation and became the company’s first CEO. By April 2010, Starbucks had become the world’s premier roaster and retailer of specialty coffees, with 8,812 company-owned stores and 7,852 licensed stores in more than 50 countries. Schultz stepped down as CEO in 2000. Nonetheless, declining stock prices, eroding customer traffic, and perceived dilution of the Starbucks brand caused the Board of Directors to ask Schultz to return to his role as CEO and lead a major restructuring and revitalization initiative. Between 2008 and 2010, Schultz drove a transformation of the... ... middle of paper ... ...arket/community. They must stay true to their concept of providing visually appealing stores that are designed to reflect the unique character of the neighborhood they serve in and environmentally friendly. Starbucks Corporation is a premier roaster, marketer and retailer of specialty coffee around world and needs to continue its global recognition. Works Cited Hottovy, R.J. "SBUX : Starbucks Corp Analyst Report | Analyst Report." Starbucks Is Well Positioned to Leverage Its Brands into a Global Multichannel Growth Story. Morning Star, 25 Apr. 2014. Web. 29 Apr. 2014. Peterson, Kim. "Starbucks' Growth Strategy? Open More Starbucks." Starbucks' Growth Strategy? Open More Starbucks. CBS Interactive, 28 Apr. 2014. Web. 29 Apr. 2014. Starbucks Corporations, Fiscal 2013 Annual Report. Retrieved from… http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome

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