Starbucks Case Study : Starbucks Case Analysis

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.

Gordon Bowker, Jerry Baldwin and Ziv Siegl founded Starbucks in 1971. Their goal was to sell the finest quality whole beans and ground coffees (Starbucks timeline and history, 2004). In 1982, Starbucks had grown to five stores and started serving coffee to restaurants and espresso bars. Harold Schultz was employed as the director of retail operations and marketing. Harold Schultz convinced the founders of Starbucks to open a downtown Seattle coffee bar, which opened in 1984. With the success of Seattle coffee bar, Schultz left Starbucks to start his own company named Il Giornale. In 1987, Il Giornale acquired Starbucks retail operations for 4 million dollars. In addition,

1. Starbucks Corporation's rise seems to be out of a storybook for Howard Schultz. Starbucks began selling whole bean coffee in 1971 under Jerry Baldwin, Zev Siegl, and Gordon Bowker. Business grew at a slow and steady pace until Schulz joined the company as manager of retail sales and marketing. After a visit to Milan, Italy, Schultz was inspired by a vision. He saw how important coffee was to the romantic culture of Italy. He believed that if Americans had such places to socialize over a cup of coffee, espresso, cappuccino, etc., that they would pay good money for his quality product. The owners of the Starbucks Corporation were not as excited and did not want to operate in the restaurant business. Schultz filmed these coffee bars and

They generally chose exceedingly obvious areas and opened stores as groups. As interest developed, these store bunches made them ready to deal with the expanded movement and to keep their focused position. In the same way, they took think about the administrations gave in the stores. Howard Schultz expected to open the sentiment and secret of coffee in coffee bars, and he knew how vital the part of baristas in attaining

Back in Seattle, his proposal to recreate this Italian coffee bar experience was turned down by Starbucks founders. He later left the company and opened up his own shop, called Il Giornale, where he was able to live that dream and a year and a half later he purchased his former employer’s company, allowing him to keep the name, Starbucks. As the business grew, it became more than just a coffee shop, but a promising investment for its stockholders. Stores were opening up at an increasingly fast rate, making big profits; there was no reason for Starbucks to change. In the year 2000, Howard stepped down as ceo and handed the position to Jim Donald who will oversee day-today operations. Howard stayed on board as chairman where he focused more on Starbucks’ global strategies. However, with all its financial success, Starbucks was losing its soul. Like other companies that were doing great financially, Starbucks did not see the cracks that started to form. That all changed with the economic downturn. Starbucks started to lose financially; stocks plummeted and came embarrassingly short of investor expectations. Because of this stumble, Howard Schultz makes an intuitive decision to go back into the ceo role in 2008.

Starbucks entered the coffee market in 1971 as a single store in Seattle’s Pike Place Market as a retailer and roaster of whole beans, ground coffee, tea, and spices. In 1982, Howard Schultz was appointed the director of retail operations and marketing. After visiting Italy in 1983, Schultz fascination with the Italian coffee bars inspired him to bring a similar type of coffeehouses to the Seattle area. Schultz idea was to offer a place where customers can relax, enjoy coffee, and engage in conversations. After several years, Schultz decided to leave Starbucks and open his own coffee company called II Giornale that offered brewed coffee and espresso beverages made from Starbucks Arabica coffee beans. In 1987, Schultz acquired

Starbucks entered the coffee market in 1971 opening their first retail store in Seattle’s Pike Place Market as a roaster of ground coffee, tea, whole beans, and spices. In 1982, Howard Schultz was appointed operation and marketing retail director. After visiting Italy in 1983, Schultz fascination with Italian coffee bars inspired him to bring a similar type of coffeehouses to the Seattle area. Schultz idea was to offer a place where customers can relax, enjoy coffee, and engage in conversations. After several years, Schultz decided to leave Starbucks and open his own coffee company called II Giornale that offered a variety of espresso drinks and brewed coffee made from Starbucks Arabica coffee beans. In 1987, Schultz merged II

Starbucks was bought over in 1987 by now existing Chairman and Chief Executive, Howard Schultz, who had a dream to bring the Italian coffee house style back to United States when he visited Italy in 1983. It was there that he was captivated by the Italian style of coffee stores and the aroma smell of the coffee experience and so, he set a mission, to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.

Three Seattle academics and entrepreneurs, English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker, started the Starbucks Corporation in 1997. Their primary product was the selling of whole bean coffee in one Seattle store. By early 1980's, this business had grown into four stores selling the coffee beans, a roasting facility, and a wholesale business for local restaurants. "There store did not offer fresh-brewed coffee sold by the cup, but tasting samples were sometimes available" (Thompson, Jr. et al, 2005). In 1982, Howard Schultz left his job as vice president and general manager of a Swedish company and assumed his new responsibilities as head of marketing and overseeing Starbucks

Baldwin and Bowker had a different strategy: they intended to purchase Peet’s Coffee and Tea enterprise in San Francisco, and pursue along the line of local stores providing high quality coffee beans and teas. The cost of this acquisition would leave very little for Schultz’s plans anyway. But the operations didn’t go smoothly after that for Baldwin and Bowker; managing the stores back and forth between Seattle and San Francisco caused the employees to feel neglected, even more as their bonus was not paid due to the tight financial situation of Starbucks at that time. Starbucks suffered from a lack of confidence from its employees, and the business was in danger, calling for an action from the management to regain trust. Schultz kept pressuring Baldwin to let him do a market test of selling beverages in one Starbucks store. Although the experience was a success,

By choosing Starbucks, customers can customize their drinks to perfection by selecting one of its 30 different options of premier coffee blends. Following the order process, customers can enjoy the great atmosphere by listening to music or perhaps enjoy taking part in friendly conversations with pleasant workers and patrons. Simply put, Starbucks thrives on a connected customer experience that differentiates them from the rest of the industry. Also, retail storefronts. In the U.S., Starbucks kindly takes advantages of the fact Americans tend to have morning rituals. As a result, they have the opportunity not only to serve loyal customers, but also essentially to become part of their lives (Krikorian, 2014).

Throughout the United States and Asia, Starbucks is renounced for their expertly crafted coffee, so much so that an immensely large portion of the nation at least recognizes the logo and the name. This success to this day keeps producing higher returns for investors especially over this last third quarter of 2016. The third quarter had set many new records with Starbucks for both the American markets as well as the Asian markets causing a big boom for the company and sparking excitement within the investors. This record increase “was primarily driven by the opening of 1,876 net new stores over the past 12 months” (Doraisamy 2016). As far as the growth due to the other stores open for more than 13 months, those stores had also seen a hefty revenue increase due to the increased memberships for Starbucks Rewards which “increased 18% year-over-year to 12.3 million active loyalty members in the U.S.” (Doraisamy 2016). This increase in memberships had proven strong towards the likelihood that customers will return at a higher frequency. Recently there has been an increase of 9% profitability in the third quarter which has noticeably been due to the consolidation of their operating margins “due to sales leverage and lower commodity costs” (Doraisamy 2016). This recent success throughout America and Asia along with the mass quantity of stores being opened, has been the main direct cause that lead to the major EPS jump this third quarter. Among the astounding

In 1981, Starbucks hired Howard Schultz as the Director of Retail Operations. He tried to convince the owners to sell coffee verse beans and machines. Unfortunately, he did not convince them and he branched off and opened his own café. Howard opened his chain of coffee shops in 1986 and later bought the name Starbucks from Baldwin.

Starbucks has also peaked consumer’s interests by offering a variety of ways to upgrade your coffee, espresso, latte, etc. According to Cathleen Caleda, an employee at the Moanalua Shopping Center 's Starbucks, “Every season, we (Starbucks) offer several unique seasonal drinks.” The expansion of these new products are not only increasing sales, but are unfortunately placing more time between when customers enter the store and actually leave with a drink in their hand. With this increasing time gap, it is more unlikely for that customer to, indeed, leave completely satisfied with their Starbucks experience.

In 1981, Howard Schultz, the chairman, president and chief executive officer of Starbucks, walked into a Starbucks store for the first time. Highly impressed of the great coffee and the company’s concept, he joined Starbucks a year later. In 1983 he traveled to Italy, where he became fascinated with the coffee culture in