CASE STUDY: STARBUCKS COFFEE
BY: KATHLEEN LEE
GRC 411
CASE STUDY: STARBUCKS
Brief History:
The first Starbucks location opened in 1971. The name is inspired by Moby Dick’s first mate.
This name and the mermaid logo were inspired by the love of the sea, from Starbucks original location in Seattle Washington in the heart of Pike Place Market. Starting as a single shop specializing in high quality coffee and brewing products the company grew to be the largest roaster in
Washington with multiple locations until the early 80’s. In 1981, current CEO Howard Schultz, recognized a great opportunity and began working with the founder Jerry Baldwin. After a trip to Italy to find new products, Schultz realized an opportunity to bring
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Morningstar analyst had this to say R.J. Hottovy.:
“I’m surprised it wasn’t ramped up in earlier years. Product innovations and international expansion not only make the business potentially more profitable, but defend them against competition.”
International partnerships increase challenges but also create new ideas in new markets that can then be translated back to US markets. (Allison)
Starbucks Lifecycle
Introduction
Growth
Maturity
Decline
Starbucks in a mature stage of its lifescycle. It was founded over 20 years ago and it has experienced rapid growth in the last 2 decades. However within the last few years its growth has slowed and has even had to close locations. They are now focusing efforts on previous endeavors and international expansion.
KATHLEEN LEE
3
CASE STUDY: STARBUCKS
Value Chain
Product
Development
Bean and ingredient Selection
Product
Distribution
Storefront
Take-home products The above is the value chain for Starbucks. The upstream portion of the value chain shows the product development from adding teas and international influences, to the research that took place to develop the VIA instant coffee line. They also search the globe for Fair Trade suppliers of high quality beans. These products are then distributed to corporate storefronts, franchise locations, airport terminals, grocery stores and more, and finally offer ground coffee
* Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time.
"External factors influence a firm 's choice of direction and action and, ultimately, its organizational structure and internal processes. These factors, which constitute the external environment, can be divided into three interrelated subcategories: factors in the remote environment, factors in the industry environment, and factors in the operating environment… In combination, these factors form the basis of the opportunities and threats that a firm faces in its competitive environment," (Pearce & Robinson, 2004, p. 78). To create an experience unlike its competitors, Starbucks must constantly evaluate all areas of their business while capitalizing on economies of scale and eliminating redundancies.
Starbucks, named after the first mate in Herman Melville's Moby Dick, was founded in 1971 at Seattle's Pike Place Market by 3 atypical businessmen, Gordon Bowker, Jerry Baldwin & Zev Siegl.
There are still profits to be made. Starbucks’ revenue is growing, though its growth has
Starbucks Company was established in 1971 with their first store in Western Avenue from that same year to 1976. They started as retailers of ground coffee tea and spices with a single in Seattle’s historic Pike Place Market. Starbucks is named after the first mate in Herman Melville’s Moby Dick and their logo is inspired by the sea-featuring a twin-tailed siren from Greek mythology. Starbucks had always wanted to inspire the human spirit. They believe in serving the best coffee by growing the coffee under quality standards. Starbucks believes rendering good services to customers is very significant to the success of the company. From just a narrow storefront, Starbucks now has more than 20,000 stores in over 60 countries and
Starbucks customer satisfaction scores began to decline despite the fact of Starbucks’ overwhelming presence and convenience. There was very little image or product differentiation between Starbucks and the smaller coffee chains. However, there was a significant differentiation between Starbucks and the independent specialty coffeehouses. The brand image of Starbucks also had some rough edges. More customers were beginning to agree with the fact the Starbucks cared primarily about making money and building more stores. Also, despite the high customer snapshot scores customer satisfaction scores were declining. It was believed that there was a
The first Starbucks opened in 1971 with a simple goal to sell good hot beverages, its original name was “Starbucks Coffee, Tea, and Spices”. Back then, the company was a single store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered some of the world’s fines fresh-roasted whole bean coffees. The name, inspired by Moby Dick, evoked the romance of high seas and the seafaring tradition of the early coffee traders.
The first Starbucks location opened in 1971. The name is inspired by Moby Dick’s first mate. This name and the mermaid logo were inspired by the love of the sea, from Starbucks original location in Seattle Washington in the heart of Pike
Firstly, Tim Hortons coffee begins its value chain journey in Central and South America. Coffee beans are extracted from
Jerry Baldwin, Zev Seigl, Gordon Bowker and Zev Siegl were the ones who opened the first Starbucks in Washington in the year 1971. They sold high-quality coffee beans and equipment. The name “Starbucks” was named after the chief mate of a whaling boat, Pequod, Starbuck. The company started out by only selling roasted coffee and not brewed coffee. The coffee was bought directly from plantations.
The first "Starbucks Coffee, Tea and Spice" store was opened in 1971 in Pikes Place Market in Seattle by three academics; History teacher, English teacher and writer Zev Siegel, Jerry Baldwin and Gordon Bowker respectively. Apparently the name Starbucks came from Moby Dick, an American classic novel about the whaling industry in the nineteenth century, by Herman Melville. Instead of selling the drink that they are famous for today, Sarbucks initially only sold coffee making equipment and coffee beans. The rather brilliant idea and decision to sell drinks rather than just machines and beans was brought up by Howard Schultz who was then the Director of Retail Operations for the company after 10 years of operation. However, his idea wasn't in favour of the company entrepreneur as he wasn't successful in convincing them about the "crazy" idea. Hence in 1986, he started a chain of coffee bars which he called II Giornale as he went his own way. Just over a year after that, Siegel and the other two sold Starbucks to Howard Schultz who then renamed his coffee bar chain to Starbucks and swiftly started expanding. The Coffeehouse chain started spreading across the United States of America after conqueting Seattle and then internationally. Tokyo, Japan was the first destination outside North America that Starbucks had ventured internationally (Coffee.org, 2014).
Innovative Hybrid Supply Chain: This combination becomes powerful to capture the market because they have implemented novel supply chain strategy. Starbucks is known to create the experience but supply chain is difficult in India. So most of the coffee comes from coffee estates in Sothern part of India especially Karnataka and Tamilnadu region. It is known as “Indian Espresso Roast”. This
Starbucks’ opened its first store in 1971, at Pike Place Market in Seattle, by three partners Zev Siegel, Jerry Baldwin and Gordon Bowker. Starbucks opened with the intent of being a gourmet coffee bean retailer and coffee equipment seller. The Starbucks name and logo came from two influences; a character named Starbuck in the classic book, Moby Dick, and a mining camp on the base of Mt. Rainier called Starbo. These two influences were combined to create Starbucks.
Starbucks Corporation, generally known, as Starbucks Coffee is the leading retailer and a brand of world’s forte coffee in the world, with more than 15,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, wherever in this world where premium quality coffee is in demand. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 20737 stores in 63 countries and territories, including 11910 in the United States, 1496 in China, 1442 in Canada, 1052 in Japan and 772 in the United Kingdom. The first Starbucks was open in 1970. The name was inspired from Herman Melville’s Moby Dick, a definitive American novel regarding the 19th century whaling industry. The nautical name matches seamlessly for a store that imports the world’s finest coffees to the cold thirsty people of Seattle. In May 1998, Starbucks have finally successfully entered the European market through its acquirement of 65 Coffee Company stores initially originated from Seattle in the UK. Both companies shared a common culture, focusing on a great commitment to customized coffee, similar company values and a mutual respect.
The name Starbucks was inspired by Moby Dick’s first mate which said that, the starting letters has to be “St”, which means power. The logo of Starbucks is of a mermaid thus it was inspired by the sea.