National Teachers College

Quiapo, Manila

Global Institution
“Starbucks Coffee Company”

Submitted By:
Duran, Marielle Ruby D.
Satira, Princess Nicole
Pasuquin, Sophia
Abiertas, Margie

Submitted To:
Ms. Paulynne Ericka Miguel
Starbucks Coffee Corporation is an international coffee and coffee house chain based in Seattle,
Washington, United States. It opened as a single small store opened in 1971 and became a coffee
giant at the end of the millennium. Starbucks has led a coffee revolution in the United States and
beyond. The store was opened by 3 men: Jerry Baldwin, Zev Siegl and Gordon Browker.
Starbucks for first nine months bought coffee from Peet’s Coffee. Within first decade Starbucks
opened five stores.

In 1983, Starbucks bought Peet’s Coffee the same year, Howard Schultz who was hired in 1982
to manage the company’s retail sales and marketing, took a buying trip to Italy, where another
coffee revelation took place. He visited Milan’s famous espresso bars and captivated by the
culture of coffee and the romance of Italian coffee bars. He returned home determined to bring
that type of culture to the United States but the higher authorities didn’t support him. As a result
he left the company and decided to write business plan of his own. His parting with Starbucks
was so amicable that the founders invested in Schultz’s vision, he then returned to Italy to do
research, visiting coffee and espresso bars.

In 1986, he opened his first coffee bar in the Columbia Seafirst Center second was soon opened
in Seattle and third in Vancouver. He also hired Dave Olsen, as a coffee consultant and employee
trainer; he was the proprietor of one of the first bohemian espresso bars in Seattle. A year later
Schultz was thriving while Starbucks was encountering frustration. Schultz then approached his
old colleagues with an attractive offer: “how about $4 million for the six-unit Starbucks chain?”
They sold, with Olsen remaining as Starbucks coffee buyer and roaster. He merged and changed
the name to Starbucks; the company then became Starbucks Corporation and prepared to go
national.

In August 1987 Starbucks Corporation had 11 stores and fewer than 100 employees. In October
of that year it opened its first store in Chicago, and by 1989 there were nine Chicago Starbucks.
Starbucks market was growing rapidly, in the United States sales grew from $50 million in 1983
to $500 million five years later. In 1988 Starbucks introduced a mail-order catalog; the company
was serving mail-order customers in every state and operating 33 stores. By then the company’s
reputation had grown steadily by word of mouth.
Starbucks installed a costly computer network and hired a specialist in information technology
from McDonald’s Corporation to design a point-of-sale system via PCs for store managers to
use. Every night all the information pass to Seattle headquarters. In 1990 the headquarters
expanded and a new roasting plant was built.

Starbucks also developed a reputation for treating its employees well which results in low
turnover in the food service industry. The company went public in 1992, the same year it opened
its first stores in San Francisco, San Diego, Orange County, and Denver. By the year’s end there
were total 165 stores. In 1993 Starbucks opened first East Coast store, in a premier location in
Washington D.C. At the end of 1993 the chain had 275 stores and 425 one year later. Over the
previous three years, sales had grown an average of 65 percent annually, with net income
growing 70 to 100 percent a year during that time. Starbucks broke into important new markets
in 1994, and purchased a 23-store rival based Coffee Connection. There was unexpected increase
in sales when in 1995 Starbucks launched a frozen coffee drink called Frappuccino in its stores.
That same year, Starbucks began supplying coffee for United Airlines flights.

For the first time, the company ventured overseas the following year. They initially started by
joint venture and licensing with local retailers. In Japan the first foreign market was developed
with the help of SZABY Inc., a Japanese retailer and restaurateur, through other partnerships
they also opened in Hawaii and Singapore the same year and in 1997 they also opened in
Philippines. They in 1996 partnership with Dreyer’s Grand Ice Cream, Inc. to develop and sell
Starbucks Ice cream. Within eight months of introduction, the number one coffee ice cream in
the United States. When they expanded in 1997 into Florida, Michigan and Wisconsin the total
number of branches were 1,412 by the end of year. Sales reached up to $1 billion and net income
hit $57.4 million. Critics complained that the company was deliberately locating its units near
local coffee merchants to siphon off sales, sometimes placing a Starbucks directly across the
street. In 1996 and 1997 residents in Toronto, San Francisco, Brooklyn, and Portland, Oregon,
staged sidewalk protests to attempt to keep Starbucks out of their neighborhoods. In late 1999 the
protesters took their anger out on several Starbucks stores which were then temporarily closed in
the company’s hometown of Seattle.

Growth in the Pacific Rim continued with the opening of locations in Taiwan, Thailand, New
Zealand, and Malaysia in 1998 and in China and South Korea in 1999. By early 2000 the number
of Starbucks in Japan had reached 100. The company aimed to have 500 stores in the Pacific
Rim by 2003. The Middle East was another target of global growth, but it was the United
Kingdom that was the object of the company’s other big late 1990s push. In 1998 Starbucks
acquired Seattle Coffee Company, the leading U.K. specialty coffee firm, for about $86 million
in stock. There were more than 100 branches in United Kingdom by late 1999. Starbucks hoped
to use its U.K. base for an invasion of the Continent, aiming for 500 stores in Europe by 2003.
Starbucks in 1998 entered into a long-term licensing agreement with Kraft Foods, Inc. for the
marketing and distribution of Starbucks whole bean and ground coffee into grocery, warehouse
club, and mass merchandise stores. The company also began experimenting with a full-service
casual restaurant called Café Starbucks. In early 1999 through the purchase of Pasqua Coffee
Co., a chain of coffee and sandwich shops with 56 units in California and New York. Starbucks
had already developed its own in-house tea brand, Infusia, but it was replaced following the early
1999 acquisition of Tazo Tea Company, a Portland, Oregon-based maker of premium teas and
related products with distribution through 5,000 retail outlets. In early 2000, the company did an
agreement with Kozmo.com Inc., an operator of an Internet home-delivery service providing its
customers with videos, snacks and other items.

In the early 21st century, Starbucks was working to achieve Schultz’s ambitious goals of 500
stores in both Japan and Europe by 2003, as well as his ultimate goal of 20,000 units worldwide.
In June 2000 he stepped down as CEO of the company to become its chief global strategist,
while remaining chairman. In the early 21st century, Starbucks was working to achieve Schultz’s
ambitious goals of 500 stores in both Japan and Europe by 2003, as well as his ultimate goal of
20,000 units worldwide.

UNDER WHAT ASPECT OF GLOBALIZATION:

Industrial globalization is a key trend in the business world today. The evolution of supply,
demand, and environmental factors is driving companies toward operating as if a homogeneous
worldwide market existed in their industries.

Starbucks Corporation is under the industrial globalization because they are having their markets
around the world, offering a broad array of services and increases multinational presence in
many markets and more cross-border activities. They can be able to provide the wants of the
customers having this high quality coffee within their place. Today various worldwide standards
have been developed which ensure that the products of all the country around the world
including Starbucks coffee that is originally from Seattle, Washington, United States meet
certain quality requirements for the satisfaction of the consumers. The markets of the entire
world have united and Starbucks coffee can be bought anywhere that has their branch locations
without any hindrance.

In an industrial globalization, power is the ability of a company to command both tangible

and intangible assets that create customer loyalty, regardless of location. Independent of size or
geographic location, a company can meet global standards and tap into global networks, thrive
and act as a world class thinker, maker and trader, by using its greatest assets: its concepts,
competence and connections and this is what Starbucks coffee have done for them to be a
successful business nowadays.
INTERNATIONAL CONNECTIONS:

With 29,865 Starbucks locations in more than 75 countries, you're never far from a Blonde roast
or Pumpkin Spice Latte. And the Seattle-based coffee chain’s reach is only expected to grow as
it recently announced plans to priorities initiatives such as the expansion and growth of
international markets.
This means that in countries such as France, where there are just 177 Starbucks locations, or
Australia, which has just 42, there may soon be many more of the coffeehouses.

However, the company still faces competition when it comes to markets known for their coffee,
such as Italy, where there are only three Starbucks locations. In 2018, Italy became the chain’s
78th global market when the Reserve Roastery opened in Milan - 20 years after Starbucks
opened its first store in Europe. Although the global coffee company has made strides towards
improving both the coffee offered and the overall coffee shop experience with the inception of its
more high-end Starbucks Reserve locations, it will likely be a long time before Starbucks sees
growth similar to that of its United States market.

Currently, the US leads by more than 11,000 Starbucks locations - these are the 10 countries with
the most Starbucks coffee shops.
1. United States - 14,758 6. United Kingdom - 1,002
2. China - 3,684 7. Mexico - 715
3. Canada - 1,542 8. Turkey - 457
4. Japan - 1,415 9. Taiwan - 454
5. South Korea - 1,260 10. Indonesia - 378
MAJOR COUNTRY LEADERS:

The top individual shareholders of Starbucks include financial giants, along with insider
executives and former senior employees. Here are the four largest individual shareholders of
Starbucks Corporation.

Howard Schultz, Founder, and Former Chief Executive

Howard Schultz is the founder, former chief executive officer (CEO), and single-largest
shareholder of Starbucks. Schultz holds 33 million shares directly and 1.7 million shares
indirectly through trusts as of Jun. 26, 2018. Schultz joined the Starbucks Coffee Company as the
director of retail and marketing in 1982. In 1983, Schultz traveled to Italy and became enchanted
with the tradition of Italian coffee roasting. He briefly left Starbucks to form his own coffee
company, called Il Giornale Coffee Company, but returned to Starbucks in August 1987 — this
time with a team of investors.

At that point, Schultz purchased all of Starbucks Coffee Company's assets and became the
company's chief executive officer. At the end of 2016, Schultz announced that he would be
turning over the CEO role to Kevin Johnson. According to Schultz's most recent filing with the
SEC on June 26, 2018, Schultz owns 33 million shares of Starbucks directly and another 1.7
million shares indirectly through trusts.
Mellody L Hobson, President of Ariel Investments
Mellody Hobson is the president of Ariel Investments LLC, a Chicago-based investment firm,
and the second-largest shareholder of the company. Hobson owns 246,000 shares of the
company directly and another 283,146 shares indirectly through a trust as of Aug. 15, 2018. She
has served on the Starbucks board of directors since February 2005 and amassed enough shares
to make her the company's second-largest individual shareholder. Hobson has also served on the
board of directors of JP Morgan Chase & Co since March 2018 and formerly sat on the board of
directors of DreamWorks Animation SKG, Inc.

John Culver, Group President of Global Retail

John Culver is the group president of Global Retail at Starbucks and the company's third-largest
shareholder with 366,402 shares held directly as of Nov. 16, 2018. Since joining the company in
August 2002, Culver has held many positions, including president of Starbucks' China and Asia-
Pacific business, president of Starbucks Coffee International, and other senior executive roles
with the company's Global Consumer Products segment.

Clifford Burrows, Group President of Siren Retail

Clifford Burrows is Starbucks' group president of Siren Retail and the company's fourth-largest
individual shareholder with 248,225 shares as of Nov. 16, 2018. As group president, Burrows is
responsible for overseeing Starbucks Roastery, Reserve, Teavana and Princi operations. Burrows
has worked with Starbucks since April 2001 and previously served as vice president of U.K.
Starbucks in 2006 and president of the company's Europe, Middle East and Africa business from
2006 to 2008. He managed Starbucks Coffee U.S. from 2008 to 2011 and took over supervision
of the Americas in 2011.

HOW STARBUCKS INFLUENCE THE GLOBAL ECONOMIC ACTIVITY:

Trading between countries positively affects the country doing the exporting. The country
doing the exporting creates a positive impact on the country’s GDP, making their economy better
and healthier. The healthier that country gets the lower the unemployment rate gets and the
higher the wage rate gets. For this reason the country is bringing in more money increasing the
revenue. An example of this for Starbucks is the importing from Latin America helps their
economy become healthier by making more capacity for employment and increases the country’s
wages bringing in more money.
Starbucks does a lot to help the planet, which also in ways can affect the economy. In
Starbucks stores recycling is being done. When people recycle and reuse items it lowers the
demand for raw products and therefore costs less for the people and for the company. By 2015
all Starbucks cups will be 100 percent reusable or recyclable. A lot of coffee sold by Starbucks is
responsibly grown and purchased, meaning it is a fair trade item helping the poverty stricken
countries exporting the beans. By 2015, all Starbucks coffee will be fair trade items. Several
people throughout the world help with Starbucks community service helping the environment
and community from building houses for the poor or cleaning a park. By 2015, Starbucks will
total about one million hours of community service each year.
HOW IT AFFECTS THE ECONOMICS IN THE PHILIPPINES:

Starbucks is one potential example of the experience economy through its way of delivering
products and services. In the Philippines, Starbucks is becoming more and more phenomenal
thus, it is timely to study the reasons of its emergence and seek to understand its underlying
Filipino culture. The customer satisfaction towards the service quality of Starbucks will be
studied together with the factors that contribute to being an example of experience economy. It is
also intends to create a general understanding on how experience economy works.

PHILIPPINE MAP INTERCONNECTIONS:

METRO MANILA Gateway Center - Upper G/F

6750 Ayala Ave. 515 Shaw
Robinson's Place Manila - Level 1 SM Mall of Asia 2
Festival Mall - Level 1 The Portal
Alabang Town Center - Level 1 Robinsons Cybergate
Greenbelt 1 - Level 1 Bonifacio High Street - Block 3
Easton Place - Valero SM Manila - Level 1
SM North EDSA - Level 1 Trinoma - Level 2
Shangri-La Plaza - Level 1 The Landmark - Trinoma
Robinsons Galleria - Level 4 Fastbytes Northgate Cyberzone
Greenhills Theater SM Southmall - GF
Powerplant Mall - Level 1 Sta. Lucia East Grand Mall Level 1
Bayview Park Hotel SM Marikina - Level 1
ABS-CBN UP Ayalaland Technohub - L1 Retailer Ctr.
Madrigal Ave., Alabang SM North Sky Garden
Pacific Star Building St. Luke's BGC
Greenbelt 3 - Level 1 Mezza Residences
RCBC Plaza - Podium 3 Drive-Thru 32nd & 7th Ave.
Shell SLEX - Muntinlupa 1880 Eastwood City
6788 Ayala Ave. Glorietta 5 G/F Makati
Tomas Morato cor Dr. Lazcano St. Crescent Park Residences, BGC
Eastwood City Walk JP Laurel Building, Roxas Blvd.
Glorietta 4 - Level 1 St. Charbel Mindanao Ave.
SM Mega Atrium - Level 4 Robinson's Magnolia Town Tower
Market Market - Level 1 Citibank Eastwood City
SM Fairview - Level 1 The Block SM North Edsa Level 2
Shell SLEX - Biñan Blue Bay Walk
Waltermart - Chino Roces Ave. Capitol Commons
Marquinton Commercial Complex Dona Soledad
Greenhills Promenade 8 Forbestown - GF - BGC
Aegis People Support Center Signa Designer Residences
SM San Lazaro - Level 1 UP Town Center
SM Mall of Asia 1
NORTH LUZON
Petron North Luzon Expressway
Shell NLEX - Balagtas
Petron NLEX - Marilao
SM Baguio
SM San Fernando Pampanga
Marquee Mall Street Mall Level 1
SM City Tarlac
Baguio Session Road
Baguio Technohub Camp John Hay
Harbor Point Subic
SM City Clark 1
Robinson's Place Malolos
SOUTH LUZON
Petron South Luzon Expressway
Aguinaldo Highway - Tagaytay
Paseo de Sta. Rosa
Summit Ridge Tagaytay
SM City Calamba G/F
Calamba Road –Tagaytay

VISAYAS-MINDANAO
Ayala Center - Cebu
SM Cebu - Level 1
i2 Point Bldg., Cebu
Ayala Center - Cebu Annex Level 4
Crowne Regency - Cebu
SM Cebu Northwing - Level 1
Lacson St. cor. 18th St. - Bacolod City
Mito's Place - Boracay Station 1
Limketkai Center, CDO
Mactan Marina Mall, Cebu
South Point SM City Iloilo
Abreeza Mall - Level 1 Davao City
SM City Davao - G/F
E Bloc 2 - Cebu
Centrio - G/F - Cagayan de Oro
SM Lanang - 2F Davao City
Science Hub Tower 4 - Mckinley Hill
Cyberpark
Robinson's Place Iloilo