Catching the Starbucks Fever - Starbucks History

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Written by Brent Kembell, Michelle Hawks, Sean Kembell, Leonard Perry, Luke Olsen

Missouri State University

April, 2002

Catching the Starbucks Fever

Starbucks History

Starbucks opened operations in Seattle's Pike Place Markets in 1971 with the future aim of providing coffee to a number of restaurants and surrounding bars. With the recruitment of Howard Schultz who led the marketing and retail efforts of Starbucks in 1982, the company took a change in direction through the views of Schultz, who after visiting Italy tried to adapt the same principles in order to a strong bar culture. Schultz then utilized Starbucks ability to provide quality coffee beans and opened up a new store called Il Giornale, which brewed coffee from these particular beans. By 1987, Il Giornale had decided to take over the assets of Starbucks and also, further changed its name to Starbucks Corporation. By the end of the year, Starbucks had increased the number of stores to 17 and furthered its location span by entering Chicago and Vancouver.

In 1990, the company took further steps forward with expansion of the Seattle headquarters and an increase in resources with the opening of a new roasting plant. Relationships and other ventures also took off during the early nineties as the company looked to development organizations to further its progress. By 1995, the company really established its name with the opening of the 676th store as well as increasing the products in store with the addition of compact discs a result of a previously popular experiment with 'in-house' music. In 1996, the company kept on stretching its reach by entering into the market of Japan, Singapore and Hawaii. This was achieved through joint ventures including the one formed with Sazaby Inc., which pushed through the development of coffee houses in Japan. By the year 2000, things had progressed so far that 3,300 stores were already opened, the company had ventured into countries ranging from England to Australia and a website was created to keep up operations with the latest technology (starbucks.com).

The current international situation for Starbucks seems to be an emerging part of their business and the reorganization of this is proved by their aim to become a leading global company through making a difference in peoples lives all around the world (http://www.starbucks.com). This goal is quite close to being achieved as proved the Starbucks current locations in international markets and the successfulness of these ventures. The current countries in which Starbucks are located in are: Australia, Bahrain, Canada, Hong Kong, Israel, Japan, Kuwait, Lebanon, Malaysia, New Zealand, Oman, Peoples Republic of China, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Switzerland, Taiwan, Thailand, Untied Arab Emirates, United Kingdom, and the United States. (starbucks.com)

Overall, the aim of becoming a worldwide global brand seems to be working in favor of the company and is helping it to attract the attention of many major companies who would like to share a partnership (starbucks.com). This is all positive news for the company because it provides a strong basis for future development of international markets, which further strengthens the mission to become one of the leading specialty coffee retailers in the world. In addition to the fact that Starbucks has already successfully opened around 3,500 stores, the 'push' to achieve their goal is proved more than ever by the aim to open at least 650 stores just in Europe by the year 2003. It's these types of goals which prove the potential of this brand to become so popular and well known, that it would be as recognizable as major names such as McDonalds and Coca-Cola.

Vision

As stated on the website, the company's vision is to 'establish Starbucks as the most recognized and respected brand in the world.'

This is a fitting vision because it is a broad comprehensive picture of what the company wants Starbucks to become. We will examine the vision using four components. First the vision is built on a foundation of the organizations core values. Starbucks only uses the finest coffee beans when brewing its variety of blends and therefore wants to be looked at with the respect of a company that uses and provides the best. Secondly, the company desires a top of the mind recognition. Starbucks not only wants consumers to remember who it is, but think about Starbucks first, having a shining image. Third is a summary of what the organization does. Starbucks is lacking in this component because it fails to provide a statement announcing what exactly what business Starbucks is in. It assumes that as a recognized brand it does not need to specify what business the company is in. The mission statement in the next section provides a much better description of this component. Finally, the vision states broad goals of what the company could be. Starbucks wants to be the most recognized and most respected brand in the world. The most recognized and the most respected are the two broad areas of this statement. Ideally the two mean number one, or above all others, but there is no numeric goal, or timeline for this objective.

The overall company operations are based around purchasing and roasting high-quality whole bean coffees and selling them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, coffee-related accessories and equipment. This is achieved through the huge number of company operated retail stores, a specialty sales group, supermarkets, a direct response business and also on the World Wide Web at the Starbucks.com website (starbucks.com). The attainment of this goal is boosted by the rapid expansion of new retail stores, in addition to the development of many new opportunities in terms of products and distribution channels.

Mission

The mission of Starbucks is to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow. None of