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Starbucks Case Analysis

Starbucks Case Analysis




I. Company Overview
Starbucks was founded in 1971 in Seattle Washington. Their prime product was the selling of whole bean coffee in one Seattle store. By 1982, the business had grown to include five stores selling coffee beans, a roasting facility, and a wholesale business for local restaurants. Howard Schultz was recruited to be the manager of retail and marketing in the early ‘80s. Schultz got the idea for the current Starbucks format from a trip to Italy where coffee was a major draw for Italian cafes. He bought Starbucks from the original owners for $4 million in 1987 and set about expanding his concept.
The initial focus of Starbucks expansion was the premium customer who valued the "Starbucks experience" – great coffee, first-rate music, and a comfortable and upbeat meeting place. Starbucks grew rapidly in the U.S. with over 10,000 retail stores representing 79% of their total revenue. Recently, Starbucks has attempted to reach the middle class market and expand through additional distribution channels such as grocery, joint ventures, and online through the StarbucksStore.com website. Additional expansion has been achieved through international markets including Japan, the U.K., China, and Mexico bringing the total international retail locations to over 1600. Finally, Starbucks has expanded into entertainment using vehicles such as books, music products, and film to add revenue.
Starbucks has been voted one of Fortune's top 100 companies to work for in 2007 and has been lauded as one of the few companies that offer comprehensive benefits to their part time employees. They also have an extensive corporate social responsibility program that supports literacy programs in the U.S. and China and sustainable coffee production in coffee growing regions such as Guatemala and Costa Rica. Their mission statement today is "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our...