STARBUCKS
BACKGROUND
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STARBUCKS
• STARBUCKS WAS A SINGLE STORE IN SEATTLE’S PICE
PLACE MARKET SELLING PREMIUM-ROASTED COFFEE
THIRTY YEARS AGO.
• TODAY IT IS A GLOBAL ROASTER AND RETAILER OF
COFFEEE WITH SOME 17,700 STORES, 40% OF WHICH
ARE IN 50 COUNTRIES OUTSIDE THE UNITED STATES.
• STARBUCKS SET OUT ON ITS CURRENT COURSE IN THE
1980s WHEN THE COMPANY’S DIRECTOR OF MARKETING,
HOWARD SCHULTZ, CAME BACK FROM A TRIP TO ITALY
ENCHANTED WITH THE ITALIAN COFFEEEHOUSE
EXPERIENCE.
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Starbucks
Schultz, who later became CEO, persuaded the
company’s owner to experiment with the
coffehouse format—and Starbucks was born.
Strategy
Sell company’s own premium-roasted coffee
and freshly brewed expresso-style coffee
beverages, along with a variety of pastries, coffee
accessories, teas, and other products, in a
tastefully designed coffeeehouse setting.
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Starbucks
• The company focussed on selling a “third place”
Experience, rather than just the coffee.
• Led to spectacular success in the United states,
where Starbucks went from obscurity to one of
the best-known brands in the country in a
decade.
• Coffee stores became places for relaxation,
chatting with friends, reading the newspapers,
holding business meetings, or (more recently)
browsing the web.
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Starbucks
• The first target outside the United States was
Japan.
• Established a joint venture with a retailer,
Sazaby Inc.; with a 50 percent stake in the
venture, Starbucks Coffeee of Japan.
• Invested $ 10 milliion
• Licensed the venture, charged with taking over
responsibility for growing Starbucks’ presence in
Japan
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Starbucks
• Training to japanese employees similar to those give to
U.S. employees
• Stock option plan for all Japanese employees
• By the end of 2009—850 stores and a profitable
business in Japan
• 1998—purchased Seattle Coffee, a British coffee chain
with 60 retail stores, for $ 84 million
• In late 1990s– opened stores in Taiwan, China,
Singapore, Thailand, New Zealand, South Korea, and
Malaysia.
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Starbucks
Strategy in Asia—license its format to a local
operator in return for initial licensing fees and
royalties on store revenue.
• 2002—aggressive expansion in Europe;
Switzerland to start with followed by other
countries
• Joint venture with Bon Appetot Group, largest
food service company
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Starbucks
Ethical Policy: Environmental Responsibility
• Fair Trade Certified Coffeee
• Empower small-scale farmers organized in
cooperatives, develop skills necessary to
compete in the global market place
• 2010—some 75% of the coffee Starbucks
purchased was Fair Trade Certified, and the
company has a goal of increasing that to 100%
by 2015
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