Opportunities

The specialty coffee industry had seen steady growth for years and the trend was expected to continue until at least 2015. Of the various segments within the specialty coffee industry, most of the growth was attributable to beverage retailers “Coffee and kiosks”. In 1979 there were approximately 250 specialty coffee retailers. The number quadrupled by 1989 to approx 1000 outlets, and it exploded to roughly 15000 by 2002. Nationally, specialty coffee sales totaled over $ 10 billion in 2005.

In the US, specialty coffee is a $5-billion industry with a 20% growth rate (House, 2013)

In the home segment, specialty coffee was estimated to be 3.2 billion. Starbucks only had 4% of this market. Starbuck has not obtain more of the market share verses their competitors. (Bukhari, 2012)

Transition: Now that we understand how the company started let’s take a look at how it grew during the early

In 1982 Howard Schultz joined the company as the Director of Marketing and Retail Operations. He tried to convince the coffee shop partners to expand the business by

To reach its current status as the largest coffee-house company in the world, Starbucks went through many changes, starting in 1982, when Howard Schultz joined the Starbucks team, setting the whole process in motion. Yet the coffee-house that we have come to know today is actually the result of an experiment carried out after Schultz took a trip to Milan, Italy, where he witnessed the potential of the local cafés culture and thought to introduce it in Seattle.

People love to drink coffee. Coffee shops, independently owned or chains are every corner. Statistics show that people are taking more coffee every day. It is a very profitable business.

When Howard Schultz launched Starbucks, its main targets were the competitors and the customers. Schultz’s brand aimed at gaining dominance in the coffee industry in addition creating a Italian coffee shop feel in the United States (Buchanan & Simmons, 2009). The strategy of Starbucks was based on new products, listening to customers wants and ensure future expansion (Buchanan & Simmons, 2009). In creating convenience for customers, Starbucks created stores almost on top of eachother. They hinged on the idea that, they did not want to lose out on a sale if a line was too long. This action, of placing stores in heavy populated areas, basing need on projected growth of an area caused some decline in sales during economic trouble with the economy. The 2007 recession, failure of subprime mortgages, increased competition from McDonald 's McCafe brand, and Dunkin Doughnuts all led to a decline in sales for Starbucks in the fourth quarter of 2007 (Buchanan & Simmons, 2009). To attempt to regain market share and recover after the

Howard Schultz didn’t just build a company, he built an empire. Starbucks’ Coffee is a benchmark in the coffee trade, for coffee drinkers and, even non-coffee drinkers. He nursed a small company in the big city of Seattle, to a global

2. By 1987, Schultz bought Starbucks from its original founders. It has grown from six stores to over 3300 locations. What were the critical drivers of Starbucks success?

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

Nevertheless, this was not embraced until 1987 were he would come in with several local investors to purchased Starbucks and rebrand. What a better location than Chicago. In 1991 is where Starbucks took off and became the took the position to offer to its full and part time employees. They also were able to take the lead in the coffee world by offering their Frappuccino’s. They continued to do well that in 1995 they joined forces with Pepsi-Cola and offered their consumers a ready-to-drink Frappuccino that could be purchased through local grocery stores or convenient stores. Drinks in 1996. It was also in 1996 that Starbucks opened its first store outside of North America in Japan. The company acquired Tazo Tea Company in 1998, and collaborated with Conservation International in 1999, to promote environmentally responsible methods for growing coffee. Starbucks has continued to grow over the years, launching its VIA™ Ready Brew coffee in 2009 (Starbucks Timeline, 2010). They have continue to work aggressively to serve the public as of today Starbucks has more than 15,000 stores in 50 countries, and have taken their name to be known as the world’s premier roaster and retailer of specialty coffee (Starbucks Heritage, 2010).

The Starbucks Company is a purveyor of gourmet coffee that was founded in 1971 at Seattle’s Pike Place Market (Retrieved March 10, 2015, from http://www.starbucks.com/about-us/company-information). At that time Starbucks was a single storefront that offered premium, fresh roasted whole bean coffees. Since opening that single store Starbucks has grown to an international presence with branding that is recognizable worldwide. In addition, Starbucks has increased their product line beyond hot and cold coffee beverages to include hot and cold teas, packaged whole bean and ground coffees, high quality, fresh foods and coffee making equipment and supplies. Starbucks operates a total of 19,767 company operated and licensed stores and operates in 62 countries. In addition to the Starbucks’ brand the company also owns and operates other well-known brands such as Teavana and Seattle’s Best Coffee. (Retrieved March 10, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF)

Starbucks first opened its doors in Seattle’s Pike Place Market with the name being coined from that of Moby Dick’s first mate (Schultz & Yang 1999). It has spread its shops across North America, all over Europe, the Middle East, Latin America as well as the Pacific Rim with an estimated 35 million customer weekly (Michelli, 2008). With tremendous growth from a small time coffee shop, the company has matured to an international icon that today it is one of the world’s leading retailer, roaster and brand specialty coffee (Story, 1971). The company offers whole bean coffees, espresso beverages, and confectionery and bakery items.

These days Starbucks owns more than 18,000 stores in 62 countries and is the premier roaster and retailer of exclusive coffee in the world. Back in 1971, when the first Starbucks opened, the company already had two intentions to give to people every single day till now: share specialty coffee with friends and help to make the world a little better.