Starbucks is the most well-known coffee corporation in the world and the largest coffeehouse company. Although founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl on March 30, 1971, Starbucks was really made famous by a man named Howard Schultz.
Abstract
Starbucks started out in a “single store in Seattle’s historic Pike Place Market” (Starbucks, 2017, p. 2). Starbucks only offered fresh roasted whole bean coffees and dark roasted in small bags. In 1981, Howard Schultz stepped into his first Starbucks and had his first drink (Starbucks, 2017). Howard ended up becoming the chairman and CEO for Starbucks.
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Problem Statement
Howard Shultz and the senior management at Starbucks have to decide how to react to the opportunities that are being made available because of their rapid growth. The decision for a strategic growth plan has to be made in the near future. This will prove to be key for Starbucks reaching their long-term goal of becoming the most recognized and respected brand of coffee in the world.
Situation Analysis
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans.
Brief Background:
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations.
Schultz, Howard, and Joanne Gordon. Onward: How Starbucks Fought for Its Life Without Losing Its Soul. New York: Rodale, 2011. N. pag. Print.
In 1987, Howard Shultz purchased the Starbucks name and assets and presided as the new CEO. Three years later, he approached Smith, who was then working at Danzas (a freight shipping company) to enlist him as the company’s CFO. Smith was able to see the vision and future potential of Starbucks. It was then, that Smith began driving Starbucks through its delicate years of raising capital, becoming a public company, and developing goals for future growth (Moix 1).
However, such success requires high maintenance. In fact, due to high competition and declining revenues, in year 2005, Starbucks introduced new products to their menu, which included pastries, sandwiches, and deserts. Such strategy helped the company regain its market power. Regrettably for the investors, such static fixture provides only a short-term relief in a highly volatile and competitive market. Mr. Schultz have expressed his concern that the company is taking a route that is causing the brand to lose its well known image of friendly coffee house (Seaford, et. al, 2012). The market that was once cornered by Starbucks has started to slip away from the grips of the company once McDonald’s, Dunkin Donuts,...
Starbucks case study: background 1971-87; private company 1987-92. (1997). McGraw-Hill Companies. Retrieved March 20, 2007, from the McGraw-Hill Companies website: http://www.mhhe.com/business/management/thompson/11e/case/starbucks-1.html
Through a series of quality control system and quality in customer service; Starbucks management proved that by committing to continuous improvement, they can remain successful even during unfavorable economic times. However, what exactly did Starbucks do to go from a small coffee bean roster company to the largest coffee-house company in the world with a market cap of 85 billion dollars.
When I saw this discussion, I couldn’t help but think of Starbucks and the impact they’ve made throughout their 45 years of establishment. I worked with them for about 7 years and saw how unique they were from your everyday coffee and latte spots. A retail company with thousands of coffee shops in the US as well as in other countries, this particular retailer has been able to catch the eyes of all ages as well as locations throughout the world. For example, today college students utilize Starbucks locations to study rather than go to a nearby library. Starbucks is also known for its best coffee and espresso drinks (Latte or Frappuccino) and with one of its delicious espresso 's any student or just a person stopping in to enjoy its lounge area where there is free Wi-Fi is awesome! Starbucks lifecycle has made a 360 turn around and been revamped twice to accommodated the growing market. Customizing their brand to fit more in with everything and not just one thing. By doing this they’ve created multiple product lifecycles within their own lifecycle as a corporate company.