Starbucks Case

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Starbucks Case

1) How did Starbucks start? What was the original idea/goal for the stores?

Starbucks was started in March 30, 1971 by three partners that met while students at the University of San Francisco. English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker were inspired to sell high-quality coffee beans and equipment. They specialized in selling whole arabica beans to a niche market of coffee purists.

Their original goal to that of becoming the most recognized and respected coffee brand in the world. They achieved this by acquiring several cafes throughout the state of WA and now Starbucks have cafes worldwide. The idea was to create a chain of coffeehouses that would become America’s “third
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Starbucks stated, “Actual store closures may differ depending on a variety of factors including, but not limited to, risks related to finalization of third party agreements, expected costs savings, income tax and other benefits associated with the store closures in the anticipated time frame, if at all.” As they’ve lost the connection between satisfying their customers and growing the business. Starbucks had one of the lowest employee turnover rates in the industry—just 70%, compared with fast-food industry averages as high as 300%. The rate was even lower for managers, and as Alling noted, the company was always looking for ways to bring turnover down further: “Whenever we have a problem store, we almost always find either an inexperienced store manager or inexperienced baristas. Manager stability is key

4) Have the company 's fundamentals changed?

Starbucks’ fundamentals have changed since numerous amounts of their stores closed. By expanding its retail business in new markets, while geographically clustering stores in existing markets resulted in significant cannibalization, the company believed that this was more than offset by the total incremental sales associated with the increased store concentration. As Schultz readily conceded, “We self-cannibalize at least a third of our stores every day.

5) Would you focus on cleanliness? Service? Speed? How are these related to sales and/or profitability?

Yes, focusing on cleanliness, service, and

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