Starbucks Corporation is a multinational coffee and coffeehouse chain company based in the United States. Starbucks is the largest coffeehouse company in the world, with 8,505 company-owned and 6,506 licensed stores in 42 countries, making a total of 15,011 stores worldwide. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks and items such as mugs and coffee beans. Through its Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of these products are seasonal or specific to the locality of the store. Starbucks brand ice cream and coffees are also sold at grocery stores. From its founding in Seattle, Washington, by Gordon Bowker, Jerry Baldwin, and Zev Siegl as a local coffee bean roaster and retailer, Starbucks has expanded rapidly. In the 1990s, the company was opening a new store every workday, a pace that continued into the 2000s. Domestic growth has since slowed down, though the company continues to expand in foreign markets and is opening 7 stores a day worldwide. The first location outside of the U.S. and Canada was established in 1996, and they now constitute almost one third of Starbucks' stores. As of November 2007, Starbucks had 8,505 company-owned outlets worldwide: 6,793 of them in the United States and 1,712 in other countries and U.S. territories. In addition, the company has 6,506 joint-venture and licensed outlets, 3,891 of them in the United States and 2,615 in other countries and U.S. territories. This brings the total locations (as of November 2007) to 15,011 worldwide. Starbucks can be found in many popular grocery chains in the U.S. and Canada, as well as in many airports. You may be wondering what contributed to the success of this company. The answer is simple; Starbucks understood the importance in building the brand. In my opinion, most people think that the only keys to success in building a brand is to have a genius marketing strategy combined with a great advertising campaign with mass appeal to worldwide markets. While I do believe that is all true, I also understand the importance of research relative to opening any business. What good is carrying a product if its not moving of the shelves, so to speak, or if its not living up to the expectations of your customers because it lacks quality. It does nothing but hurt the product brand which means declining sales for your company.
Great quality products, customized, served in clean, convenient placed stores for everyday coffee, friendly and fast serving, everything in a pleasant atmosphere - these were just few factors that lead to the great success of Starbucks during the nineties. Their USP was a place where every American could escape from home or work, for a coffee drinking ritual; high quality coffee, according to each customer's taste, served in a special, intimate ambience. Their image was supposed to appeal to anyone, being based on the idea of community, "exploiting" the need of people to interact with each other, in a "third place", away from home or work.
Today, they have expanded lunch programs to a total of 4,150 stores and introduced the ability to warm pastries and provide hot breakfast sandwiches to stores across the nation. Starbucks retail stores are operated through a number of joint venture and licensing arrangements in South East Asia countries as well as Thailand, Singapore and China. When they do the business in foreign countries, the most important issues will have to be aware of the exchange rates. They are planning to open 2,400 stores internationally in 2007, and they have approximately set financial growth targets for total revenue 20 percent and annual earnings-per-share 20 to 25 percent for the next three to five years. In addition, they have proposed new stores count target to 40,000 worldwide (20,000 U.S. and 20,000 International) in the long-term (Starbucks Financial Release, 2007).
In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, it was announced by rival Diedrich Coffee that it would sell most of its company-owned retail stores to Starbucks.
Starbucks currently employs 191,000 employees worldwide. According to Starbucks International states website (2015), “with more than 21,000 stores in over 65 countries, it’s clear that our passion for great coffee, genuine service and community connection transcends language and culture”. 1). The adage of the adage. Starbucks employees have access to further their education and gain a higher career status if they desire.
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. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
Starbucks International has gone beyond the normal philosophy of Starbucks, to create a re-birth of their product line in foreign countries. Typically in the United States, Starbucks owns its entire line of coffee-bar stores outright with no franchise investments or partnerships. However, their international operations are quite the opposite. Starbucks International has adopted a strategy of partnerships to create its line of international coffee-bar stores. These joint ventures create an increased ease of entry into the foreign market.
There is speculation that the company was pouring too much capital into its complex system of joint ventures and licensing agreements, and could not get a hold of its operational costs. They decided to source some of their merchandise and disposables to less expensive suppliers as an immediate cost-cutting measure. They also decided to cut back on the number of new stores and shut down unprofitable ones. Starbucks has had to learn the hard way that external forces go far beyond a society's taste in coffee, and that too much growth can have negative effects.
Since its' 1992 IPO, Starbucks has continually focused on growth. Initially, the growth was targeted to enable Starbucks to achieve their goal of becoming the leading North American retailer of specialty coffee. The early success they achieved resulted in Starbucks expanding their original goal to that of becoming the most recognized and respected coffee brand in the world.
One of the major corporations today that is trying to control a large portion of the supply of coffee is Starbuck. Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world. Starbucks purchases, roasts, and sells whole bean and rich-brewed coffees, espresso beverages, cold blended beverages, an assortment of food items, coffee-related
Starbucks traces its origins to a single store opened in 1971 in Pike Place Market, Seattle, WA. In 1982, Howard Shultz joined the Starbucks team. He traveled to Italy in 1983 and experienced the environment of its coffee bars. His love and appreciation of the Italian coffee bar setting motivated him to reproduce it in the United States. In 1987, Shultz gathered a group of investors and purchased the company. Over forty years since its humble beginnings, Starbucks has expanded to 62 countries with over 18,000 stores.
Starbucks’ inception began in 1971 in Seattle, Washington, a city that is known for coffee roasting. Since opening its doors to customers in Seattle’s Pike Place Market, the company has managed to open several stores across the nation and internationally. As of June 2015, and because of Starbucks’ mounting success, they have a total of 22,519 stores (“Starbucks,” 2017). Jeremiah 29:11 states, “For I know the thoughts that I think toward you, says the Lord, thoughts of peace and not of evil, to give you a future and a hope (NKJV).” God has a plan for everyone; man was created in His image and His
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. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,
Expansion of Domestic and International retail markets: With the target of 2000 stores by year 2000, Starbucks is on an expansion mode. They are expanding into the international markets and simultaneously they are diversifying in the domestic markets also. Initiatives like Frappuccino and the Doppio cart are part of this.
In 1971, three young entrepreneurs began the Starbucks Corporation in Seattle Washington. Their key goal was to sell whole coffee beans. Soon after, Starbucks began experiencing huge growth, opening five stores all of which had roasting facilities, sold coffee beans and room for local restaurants. In 1987, Howard Schultz bought Starbucks from its original owners for $4 million after expanding Starbucks by opening three coffee bars. These coffee bars were based on an idea that was originally proposed to the owner who recruited him into the corporation as manager of retail and marketing. Overall, Schultz strategy for Starbucks was to grow slow. Starbucks went on to suffer financial losses and overhead operating expenses rose as Starbucks continued its slow expansion process. Despite the initial financial troubles, Starbucks went on to expand to 870 stores by 1996. Sales increased 84%, which brought the corporation out of debt. With the growing success, Starbucks planned to open 2000 stores by year 2000.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.