Case study starbucks

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Strategic Management PMS 3393

1.0 INTRODUCTION

Name : Starbucks Corporation (NASDAQ: SBUX)

Headquarters : Seattle, Washington, U.S.

Employees : 176,000 in 2008

Revenue for 2008 : US$10.383 billion

CEO : Howard Schultz (Founder of Starbucks coffeehouse)

Starbucks Corporation is an international coffeehouse chain based in Seattle,

Washington, United States. Starbucks is the largest coffeehouse company in the

world, with 16,120 stores in 49 countries, including around 11,000 in the United

States, followed by nearly 1,000 in Canada and more than 800 in Japan.

Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and

cold drinks, snacks, and items such as mugs and coffee beans. Through the

Starbucks Entertainment division and Hear Music brand, the company also

markets books, music, and film. Many of the company's products are seasonal or

specific to the locality of the store. Starbucks-brand ice cream and coffee are

also offered at grocery stores. Starbucks’ Italian style coffee, espresso

beverages, teas, pastries and confections had made Starbucks one of the

greatest retailing stories of recent history and world’s biggest specialty coffee

chain. In 2003, Starbucks made the fortune 500.

Strategic Management PMS 3393

1.1 BACKGROUND OF THE COMPANY

1.1.1 Era before Howard Schultz

In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel

Siegel and writer Gordon Bowker opened Starbucks Coffee, Tea and Spice in

Touristy Pikes Place Market in Seattle. The three were inspired by entrepreneur

Alfred Peet (whom they knew personally) to sell high-quality coffee beans and

equipment. The store did not offer fresh brewed coffee by the cup, but tasting

samples were sometimes available. Siegel will wore a grocers apron, scooped

out beans for customers while the other two kept their day jobs but came by at

lunch or after work to help out. The store was an immediate success, with sales

exceeding expectations, partly because of interest stirred by the favorable article

in Seattle Times. Starbucks ordered its coffee-bean from Alfred Peet but later on

the three partners bought their own used roaster setting up roasting operations in

a nearby ramshackle building and developed their own blends and flavors. By the

year 1980s the company had four Starbucks Stores in Seattle area and had been

profitable every year. Later on, Siegel left the company and Jerry Baldwin took

over day-to-day management of the company. Gordon Bowker remained as an

owner but devoted most of his time in his Design Firm. In 1981, Howard Schultz,

the vice president of U.S operations for Swedish Maker of stylish kitchen

equipment and coffeemakers decided to pay Starbucks a visit. He was curious

about why Starbucks was selling so many of his company products. He was

impressed with the company management and the quality products the make.

Schultz asked Baldwin whether there was any way he could fit into Starbucks

and it took long time to decide his request. He tried many times till one day he

was given a job of heading marketing and overseeing the retail stores.

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1.0 INTRODUCTION Name : Starbucks Corporation (NASDAQ: SBUX) Headquarters : Seattle, Washington, U.S. Employees : 176,000 in 2008 Revenue for 2008 : US$10.383 billion CEO : Howard Schultz (Founder of Starbucks coffeehouse) Starbucks Corporation is an international coffeehouse chain based in Seattle, Washington, United States. Starbucks is the largest coffeehouse company in the world, with 16,120 stores in 49 countries, including around 11,000 in the United States, followed by nearly 1,000 in Canada and more than 800 in Japan. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks, and items such as mugs and coffee beans. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores. Starbucks’ Italian style coffee, espresso beverages, teas, pastries and confections had made Starbucks one of the greatest retailing stories of recent history and world’s biggest specialty coffee chain. In 2003, Starbucks made the fortune 500. 1.1 BACKGROUND OF THE COMPANY 1.1.1 Era before Howard Schultz In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel Siegel and writer Gordon Bowker opened Starbucks Coffee, Tea and Spice in Touristy Pikes Place Market in Seattle. The three were inspired by e ...
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