Growth of Starbucks

Get ready, set, GROW!!! That really seemed to be Starbucks mission in life. From 1998 to 2002 they tripled the number of stores that they either operated or licensed. They wanted to penetrate every possible market and they seem to have been pretty successful at achieving this. Starbucks also had defined what they wanted to be when they grow up, in that they wanted to be the third place in a person’s life after their work and home. Starbucks created a unique gather spot for people and for its start targeted mostly affluent shoppers. Starbucks really felt that they were delivering the values of 1) Providing the highest quality coffee, 2) Creating a welcoming and customer focused experience, 3) Priding themselves in their unique ambient atmosphere. So Starbuck’s was not only trying to sell great coffee they were creating a unique experience in doing so.

There are several factors that were the framework for Starbucks successes. One major factor was that they brought back the trend of coffee drinking. With this vibe established that they were able to charge a premium for every cup of coffee - everyone wanted to go to Starbucks! Along with the trend that was created, they had great customer loyalty, with their best customers visiting up to 18 times in one month. This customer loyalty was no mistake, as one of their mantras was to create an experience and always say yes to the customer. They really were striving to be the Ritz Carlton of coffee.

Another major factor contributing to their success was how they treated their employees. The partners or baristas were offered benefits and profit sharing which is not common among hourly employees. This created a culture of dedication among these employees which resulted in very low turnover rates. This helped with the good customer service that was expected by the patrons. Also Starbucks was always “self-evaluating” themselves through secret shoppers that would report on their experience; this contributed to all the stores keeping on their A game. These results were continually tracked so they could identify patterns, both good and bad.

A third contributing factor for Starbucks success was the partnerships that they formed. The first step was establishing partnerships with coffee growers and working directly with them to ensure the highest quality product. The next step in this partnership was taking their uniquely developed products to markets through other distribution channels.