Slide 1: Economic Position
Company history
• Starbucks coffee was founded by three teachers at the University of San Francisco. These three teachers wanted to open a coffee shop in which sold high quality beans and equipment.
• The name “Starbucks”, came from the name of the chief mate on the whaling ship from the book Moby Dick.
The Company
• Starbucks is a multination corporation, which first opened in 1971 in Seattle. It started off as a single store in Seattle’s historic Pike Place Market.
• Although Starbucks was not popular at the time, it offered some of the “world’s finest fresh-roasted whole bean coffees”
• In the year of 1981, Howard Shultz (chairman, president and chief executive officer) first walked into the store. After having his first cup of Sumatra, he was attracted to Starbucks. Howard Shultz then joined a year later
• After working at Starbucks for two years Howard left to go to Italy. During the year of 1983, while in Italy, he became fascinated with Italian coffee bars. His vision was to bring the Italian coffeehouse tradition back to the US.
• When returning from Italy, he opened II Giornale coffeehouse. By the year of 1987, Shultz had returned to Starbucks in August, which was when the three owners sold Starbucks to Howard.
• After receiving ownership of Starbucks, Shultz renamed his former coffeehouses from “II Giornale” to “Starbucks.”
Starbucks Today
• Starbucks is created to be a different type of company in which:
• Celebrates coffee and the rich tradition
• Brings a feeling of connection
• Starbucks mission is “to inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time.”
• It is located in 62 countries with more than 18,000 stores.
• The r...
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...d, and many of their programs are for all countries, and stores. By giving more flexibility for local programs, activities can have more local benefit. For example, smaller communities have different social needs and programs than bigger cities. Poorer countries have different needs than richer countries. By giving these different countries flexibility, they are able to fit the needs of their community.
c) Global Level – how could we address broader concerns, such as pollution, disposal and over consumption of scarce resources? What is the role of the consumer?
We are able the address broader concerns by reporting to the company, writing letters to the newspaper so that people reading the newspaper are aware of our opinions, and by word of mouth with friends and neighbors. Our role is to act upon concern and buy from the companies that are socially responsible.
Starbucks Corporation is one of the world's largest coffee roaster, marketer, and retailer of coffee. In 1971, three entrepreneurs, Jordan Bowker, Zev Siegel, and Jerry Baldwin opened first Starbucks store in Seattle, WA. In 1982, Howard Schultz joined Starbucks as a marketing director. He came up with the idea to make Starbucks a coffee house chain but Starbucks founders rejected the idea and he left the company in 1985. Later, Schultz started his own coffee bar named “Il Giornale”. In a couple of years, he was able to buy Starbucks Corp. from its original owners. He renamed his coffee bars "Il Giornale" as Starbucks. In 1987, Starbucks opened its first store outside the Seattle in Vancouver and Chicago. In 1996, Starbucks opened its first international store in Tokyo, Japan. [1,2]
The new concept worked out and Il Giornale was a success. But Schulz aimed higher. He found local investors and bought Starbucks in 1987 for $3.8 million. That gave way for expansion and in the same year he opened new cafes in Chicago and even Vancouver, Canada. The original 17 Starbucks Cafes were established. In 1992 the company went public and stocks were now publicly traded at the NASDAQ (SBUX). At this time Starbucks counts approx. 165 cafes. On March 7th, 2001 Starbucks eventually moved to Europe and opened their first cafe in the Old World: Zurich, Switzerland. Today the company has more than 16,000 cafes in more than 35 countries. (Wilson)
CEO of Starbucks, Howard Schultz, originally had the idea that Starbucks would have the community/traditional feel in their stores, and still serve high-quality coffee (“Our Heritage” 1). Adding an Italian vibe to the coffee shops, keeping its traditional logo, which is based on a mythical creature, and advertising some of its products in a more “traditional” style accomplished the first goal. For an example, Starbucks recently created a commercial about their Refreshers, which was about cooling someone down in the summer time, with the scenery of Tuscany in the background. Serving high-quality coffee was obtained by ordering coffee beans from where they naturally grow and giving it a perfect roast to give to a customer. It was a marketing strategy that helped Starbucks grow and transform its commodity chain to support gathering more raw materials for a cheaper and more efficient way.
Great quality products, customized, served in clean, convenient placed stores for everyday coffee, friendly and fast serving, everything in a pleasant atmosphere - these were just few factors that lead to the great success of Starbucks during the nineties. Their USP was a place where every American could escape from home or work, for a coffee drinking ritual; high quality coffee, according to each customer's taste, served in a special, intimate ambience. Their image was supposed to appeal to anyone, being based on the idea of community, "exploiting" the need of people to interact with each other, in a "third place", away from home or work.
When Shultz took over, this started the beginning of a new era. He spent all his time at the stores trying to make every thing perfect in every way. He started with the employees, making the environment so friendly for every type of coffee lover.
In 1971, three young entrepreneurs began the Starbucks Corporation in Seattle Washington. Their key goal was to sell whole coffee beans. Soon after, Starbucks began experiencing huge growth, opening five stores all of which had roasting facilities, sold coffee beans and room for local restaurants. In 1987, Howard Schultz bought Starbucks from its original owners for $4 million after expanding Starbucks by opening three coffee bars. These coffee bars were based on an idea that was originally proposed to the owner who recruited him into the corporation as manager of retail and marketing. Overall, Schultz strategy for Starbucks was to grow slow. Starbucks went on to suffer financial losses and overhead operating expenses rose as Starbucks continued its slow expansion process. Despite the initial financial troubles, Starbucks went on to expand to 870 stores by 1996. Sales increased 84%, which brought the corporation out of debt. With the growing success, Starbucks planned to open 2000 stores by year 2000.
Schultz, Howard, and Joanne Gordon. Onward: How Starbucks Fought for Its Life Without Losing Its Soul. New York: Rodale, 2011. N. pag. Print.
Howard Shultz and the senior management at Starbucks have to decide how to react to the opportunities that are being made available because of their rapid growth. The decision for a strategic growth plan has to be made in the near future. This will prove to be key for Starbucks reaching their long-term goal of becoming the most recognized and respected brand of coffee in the world.
Gordon Bowker, Jerry Baldwin and Ziv Siegl founded Starbucks in 1971. Their goal was to sell the finest quality whole beans and ground coffees (Starbucks timeline and history, 2004). In 1982, Starbucks had grown to five stores and started serving coffee to restaurants and espresso bars. Harold Schultz was employed as the director of retail operations and marketing. Harold Schultz convinced the founders of Starbucks to open a downtown Seattle coffee bar, which opened in 1984. With the success of Seattle coffee bar, Schultz left Starbucks to start his own company named Il Giornale. In 1987, Il Giornale acquired Starbucks retail operations for 4 million dollars. In addition, Il Giornale changed its name to Starbucks Corporation and opened locations in Chicago and Vancouver, B.C. (Starbucks timeline and history, 2004).
Around 2007 or 2008, Howard returned to Starbucks after leaving for a few years. Everything became very difficult for the company. At the time, their coffee prices were shown as extremely ridiculous and their sales began to decline. Other companies took this as their time to join the coffee business and gave Starbucks a run for it’s money. As for the people buying their product, bloggers began discriminating against how Starbucks handled some things in their stores, like wasting water while washing their equipment. Since publicity relates to a lot of company’s success, this took an even bigger toll on Howard’s decision making process as CEO. Now that they have passed those bad days of criticism, their main problem and focus is to maintain intimacy with their customers and their people even as their business continues to grow and become a bigger company and not a small Seattle shop any
Business was good, but it was not without its problems. There was the political upheaval in the Middle East, followed by further tension after then CEO Howard Schultz commented on growing anti-Semitism in the region. Their integrity came under fire when certain Non-Governmental Organizations (NGO's) accused them of purchasing coffee beans under questionable social and economic conditions. These situations, together with difficult economic times globally, meant that Starbucks was likely going to take a hit somewhere. Eventually, they shut down their Israeli operations altogether.
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,