Why Starbucks Fought For Its Life Without Losing Its Soul

Since Starbucks entered the coffee retail business, the company has made many trade-off business decisions. The first major trade-off was made when Howard Schultz wanted to acquire present day Starbucks from three entrepreneurs Baldwin, Siegel and Bowker. Therefore, Schultz prior to the acquisition made the trade-off to open his own coffee bar in 1986 instead of staying at Starbucks as the manager of retail sales and marketing. A bold feat, Schultz was able to replicate success and was offered to buy Starbucks for $4 million. At the time of the acquisition, many investors, including the former Starbucks owners, would not expect that the American consumer would pay a premium for coffee products. Schultz, after calculating the opportunity cost, was convinced that Starbucks would become a large coffee chain not only in the United States but internationally too. Reflecting this approach, Schultz’s trade-off worked. Starbucks, according to our book has revenue exceeding $13 billion and nearly 200,000 employees. The company has also expanded to 40 countries with 17,000 stores (Hill et al., 2015).

Howard Schultz took a small three-store coffee shop and grew it into the largest specialty coffee retailer in the world. With twenty-five thousand locations, 105 million customers a week, and 191 thousand employees. Let’s start with the beginning.

“Coffee: Just an Energy Boost or a Social Atmosphere?” Masters of Media. N.p., 19 Oct.2012).This statement basically gives the whole reason why Americans enjoy so much coffee. The United States is the place where there are the most hard working individuals in the world. Everyone works almost at the same pace and non stop. They are unfamiliar with vacations. Of course, in order to be productive in this intense working atmosphere, the need for coffee is inevitable, because it keeps the person boosted and motivated. People use coffee to wake themselves up, to give themselves a jolt of energy, or in light of the fact that they like the flavor. Individuals appreciate some coffee on the beginning of a hard working day or when they have to concentrate in their studies. Drinking coffee is an unwinding and addictive day by day custom for some people, but as most individuals know, it is due to the caffeine found inside of the coffee. Coffee is a vital piece for the social part of it. Individuals relate coffee with social collaboration. Coffee Houses before were meeting places for learned people, specialists, and authors, who would share their ideas and thoughts. Today, the same process still exists. This coffee place can be called a social affair place, or the get together place. It can work as a spot where the individuals could get together with companions or appreciate a coffee inside of a serene environment. With this harmonious atmosphere, a Coffee House is the perfect spot to bring partners, friends, customers, and dates for an easygoing setting that facilitates great discussions. Now, it is not only the coffee and its great effect, but also the environment and place where the coffee is being drunk. Drinking coffee allows the person to become more acquainted with another person, get up to speed with one another’s lives, or discuss diverse sort of things. Coffee is one of

There is a funny Garfield cartoon that depicts one of many American realities about coffee, “I’m still a sleepy head, after 1 cup of coffee, To really wake up! I need at least 3 cups of coffee, and to really Rise and shine I need way too many cups”.

Dear Diary, this is Howard Schultz writing to you today. I am sitting here reminiscing about my early years at Starbucks. I remember working at Hammarplast, when my curiosity got the better of me, and I wondered why this small coffee shop was ordering so many plastic cone filters. It is worth noting, that I had no ulterior motives when visiting Starbucks in 1981. Subsequently, I was impressed with their operation, and expressed my desire to work with the company. Consequently, it took me over a year to convince them, but eventually, I was awarded the marketing director position. Then, shortly after, during a trip to Milan I discovered the romance of coffee. Interestingly, I knew that there was a way to incorporate what I learned in Milan into the Starbucks brand, I just had to convince the owners. I remember the guys rejecting some of my ideas, thinking that my style was unsuited for the laid back atmosphere. Unfortunately, I was unable to convey my vision effectively, it was never the right time or the right path for those guys. Shortly afterwards, I left to pursue my dreams, of an espresso empire. Surprisingly, a few years later, I found out Starbucks was available to purchase. Somehow, I was able to raise the capital needed to purchase Starbucks, and this is when my dream began to blossom. Thus, I always felt that, I was the only one that was able to envision what the company could be. First, I started with the employees. Moreover, I wanted the employees to feel as if

The extraordinary success Starbucks experienced during the early 1990s resulted from Howard Schultz’s passion and vision to create a coffee culture in the United States similar to the coffee culture he experienced while traveling to Italy. Schultz’s vision of the Starbucks brand evolved around providing a quality product while delivering exceptional customer service in an inviting atmosphere. Starbucks’ success can be attributable to the following factors:

Howard Schultz, ranked by Business Insider as one of the top CEO’s of the past twenty years, shaped the consumption of coffee into an experience and developed a strong brand, Starbucks, that is recognized internationally. Eight years later after resigning in 2000, Schultz saw the company going downhill and decided to take control again, as CEO. The Starbucks creator had a vision for his company and shaped the culture by putting an emphasis on quality product and implementing the motto “employees first”. From early on, Starbucks was ahead of its time. Schultz offered healthcare for part-time and fulltime employees, extending this to domestic partnerships as well. Additionally, he makes an outstanding effort to employee minority workers, reimburse partial tuition and distribute employee stock options to baristas. After returning in 2008, Schultz made a controversial move of electing to send 10,000 managers to a leadership conference, which totaled over $30 million. He claims that this move was saving point for Starbucks and without it, the company surely would have failed.

When Howard Schultz first experienced Starbucks Coffee, Tea and Spice he was immediately smitten by the operations and business culture, and actively pursued a job with them. At that time, Starbucks Coffee, Tea and Spice was an 11 year old coffee shop with six stores in Seattle specializing in high-quality coffee beans. Starbucks Coffee, Tea and Spice desired to bring fine coffee to their customers, so to that end, they imported quality coffee beans, roasted them to their own exacting specifications and sold the beans and high-end coffeemakers to their customers, so customers could make superb coffee at home. The only coffee brewed onsite was the sampling of a roast, in order for a customer to determine if they wanted to buy that

Bob Thompson, a professor of popular culture at Syracuse University, once said “You could say this nation runs on two dark liquids – petroleum and coffee”, in reference to the importance of coffee in the United States (Fernau). Personally I consume coffee nearly every day, typically in the mornings before my first class of the day. The University of Pittsburgh has coffee shops in nearly every major university building and provides students with a variety of meal plans that include coffee in it. My consumption of coffee is both for its pleasing taste and for its caffeine – which I rely on to be “awake” for my morning lectures and labs. Despite, my love of the taste of coffee I rarely ever drink it when I don’t have work to do. Coffee begins my process of doing work.

Most know Starbucks, the ubiquitous retail chain that, in the 1990’s, turned coffee drinking into a national pastime. However few know Howard Schultz, the humble chairman, CEO and mastermind behind Starbucks’. Schultz is credited with bringing Italy’s “coffeehouse culture” to the United States and packaging it for mass consumption. This maverick marketer transformed a little-known four-chain store in the leading retailer of specialty coffee in North America.

“Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” (Starbucks, 2013). That is the mission statement of Starbucks. Whenever you think about who has the most premier cup of coffee or the most mouthwatering Frappuccino, you can’t help but visualize the green twin-tailed mermaid coffee icon. With more than 21,000 locations in 66 countries and revenue upwards of US $16.44 billion (Fortune 500, 2015), something or more importantly someone is the major key to this success. And that someone would be Howard Schultz the Chairman and Chief Executive Officer of Starbucks. Schultz sees the road to his company’s success just as steps to brew the perfect cup of coffee. This essay is about how Howard Schultz is a proven effective business leader. Shown directly with his motivation techniques, strategic decision making and planning and organizational restructuring.

In 1982, Starbucks coffee changed forever. While traveling in Milan, Italy, head of marketing Howard Schultz was intrigued by the coffee shop atmosphere – patrons sitting, relaxing and chatting over café latte. Wanting to

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.

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.

The Starbucks Corporation is a roaster, marketer, and retailer of specialty coffee throughout the world, currently operating in more than 50 countries today (“Our Starbucks Mission”). Starbucks represents one of the most recognizable logos and companies across the globe today, continually expanding and diversifying their unique operations. The first Starbucks opened in Seattle, Washington in 1971 and since 1987 Starbucks has opened an average of two stores daily (Bonander). Starbucks’ success can directly be attributed to the quality and meaningfulness of their overall mission and vision for the global society. Starbucks aims to provide its customers with the highest quality coffee in the warmest and most welcoming setting; a setting where they feel embraced by their individual community and as if they belong to something or somewhere truly unique and identifiable to themselves individually. They constantly strive to engage with new markets, satisfying each community’s wants and needs with the utmost of respect for their cultures. In order to truly embrace and appreciate the quality behind Starbucks’ global strategy, it’s essential we recognize the foundation of their business and the derived successes of their worldwide contributions, their local efforts and how it applies to the Chicago area community in particular, and the ways in which Starbucks makes even the most foreign places feel local and community-oriented.