STARBUCKS

Case Study
 INTRODUCTION

■ Starbucks Corporation is an American coffee company and coffeehouse chain.

■ Founded : Seattle, Washington in 1971.
■ Founders : Jerry Baldwin, Zev Siegl, Gordon Bowker.
■ Key people : Myron E. Ullman (Chairman)
 HISTORY
Meaning Of The Name Starbucks:
■ The name of the company was inspired in the Moby Dick’s novel; Starbuck was the first
mate of the ship Pequod.
1971:
■ The first Starbucks store was opened in Seattle, Washington. It was located at 2000
Western Avenue and later moved to the historic Pike Place Market.
The three partners that started this company were Jerry Baldwin (English teacher),
Gordon Bowker (writer), and Zev Siegl (history teacher).
At the beginning they did not sell brew coffee,
only roasted whole beans.
1982:
■ Howard Schultz started to work in Starbucks as director of retail operations and marketing.
One year later, in 1983 Schulz travels to Italy.
1984:
■ Howard convinces the founders to test the coffeehouse concept. The first Starbucks Caffe
Latte is served.
1985:
■ Schultz found the store II Giornale where he sold coffee and espresso beverages using
Starbucks coffee beans.
Expansion:
1987:
■ Starbucks was sold to Howard Schultz, who had worked for Starbucks before. Schultz had
been in Italy four years before and fell in love with the uniqueness the Italian coffeehouses
had: a place where people gather for talking and sharing experiences. He wanted to
reproduce that place in the United States. Schultz rebranded other stores he had as
Starbucks and started to expand rapidly, having stores in Vancouver, British Columbia, and
Chicago. The revenue for that year was of U$ 1.3 million. Two years later he had 46 stores
and roasted over 2,000.000 pounds of coffee.
1991:
■ Starbucks become the first privately owned U.S. company to offer a stock option program
that includes part-time employees.
1992:
■ Starbucks had 140 outlets with revenues of U$ 73.5 million and a company value of U$
271 million. That year Starbucks had its initial public offering and sold 12% of the company,
facilitating the expansion of the stores to nearly double number.
1994:
■ Starbucks opened the first drive-thru location. Total stores 425.
1996:
■ Starbucks began selling bottled Frapuccino and opened first store outside of North
America in Japan. Total stores: 1,015.
1999:
■ Starbucks acquired Tazo Tea and Hear Music. Total stores: 2,498.
2001:
■ Starbucks introduced the Starbucks card.
2003:
■ Starbucks acquired Seattle Coffee Trading Company.
2004:
■ Starbucks acquired Ethos Water. Total stores: 10,241.
2008:
■ Starbucks acquired Coffee Equipment Company and its Clover brewing system. Launches
the first Starbucks online community and joins Twitter and Facebook. Total stores: 16,680.
2009:
■ Starbucks Launched loyalty program and Card mobile payment.
2013:
■ Starbucks prices $750 million of Senior notes. Starbucks opened 1,000th stores in China
and Japan.
2014:
■ Starbucks opened stores in Brunei and Colombia.
2016:
■ Starbucks Coffee Company has over 24.000 stores in 70 countries through independent
subsidiaries, joint venture associations or franchises.
2018:
■ Starbucks revenue for the twelve months ending December 31, 2018 was $25.278B, a
11.22% increase year-over-year.
Corporate Value &
Business Decision
■ Building a company with soul.
■ Only selling coffee beans without
artificial flavours.
■ Satisfy customers by all means.
■ Employees contribution and
involvement and making starbucks
a better company.
Company’s
Mission Statement
■ “To inspire and nurture the human
spirit – one person, one cup and
one neighborhood at a time.”
■ “Establish Starbucks as the premier
purveyor of the finest coffee in the
world while maintaining our
uncompromising principles.”
 KEY ISSUES FACED
■ Attempts to expansion and creating new value innovation.
■ Over exposed.
■ Competitors in the field such as McDonalds pose a threat.
■ Porter’s 5 Forces Analysis :
High bargaining power of suppliers
The threat of new entrants is medium
The threat of Industry competitor - McDonalds creating the McCafe line.
 ALTERNATIVE ACTION TO SECURE
COMPETITIVE ADVANTAGE
■ More Customization to offer
■ Online user interface : Find the nearest Starbucks shop, Create their own drink,
Order online.
■ Social Media Campaigns : Selfie with favourite Starbucks drink, the highest likes of
the picture you get free coffee for 15 days.
 CONCLUSION

■ Need to create new value innovation by enhancing the customer experience by

investing in online content and interactivity.
■ Enhancing the connection to their loyal customers.