STARBUCKS CASE STUDY CUSTOMER FOCUS “Every day we go to work hoping to do two things: share great coffee with our friends and help them make the world a little better. It was true when the first Starbucks opened in 1971, and it’s just as true today.” – Howard Schultz, CEO, Starbucks Coffee Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington, United States. Starbucks is the largest coffeehouse organization in the world, with 17,133 stores in 49 countries, including 11,068 in the United States, 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, coffee beans, salads, hot and cold sandwiches and panini, pastry, snacks, and items such as mugs and tumblers. From a local coffee bean roaster and retailer in Seattle, the organization has expanded rapidly. In the 1990’s, Starbucks was opening a new store every workday, a pace that continued into the 2000’s. The first store outside the United States or Canada opened in the mid 1990’s, and overseas stores now constitute almost one third of Starbucks stores. The organization planned to open a net of 900 new stores outside of the United States in 2009, but has announced 900 store closures in the United States since 2008. Background Starbucks was started by three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who knew each other in the University of Seattle. In 1971, they opened the first store with the name “Starbucks Coffee, Tea, and Spice” in Seattle, Washington’s Pike Place Market. They engaged in making profit from selling coffee beans roasted to individual customers and restaurants. Until 1982, they had increased the number of stores to four. During the same period, a sales representative Howard Schultz, of the house ware business in New York, Hammerplast, visited them. He wanted to know why a small organization needs a large number of percolators from Hammerplast. After he understood the atmosphere, environment, and philosophy of the organization, he decided to be a part of Starbucks. Schultz was appointed as a director of marketing and retail sales. In the following year of his appointment, Schultz went for a business trip to Milan, Italy. There, he experienced an entirely different coffee culture from the United States. The culture of Italian café was one of the important parts of people’s daily lives. There were numerous coffee bars around the area and the public usually liked to socialize in a coffee bar. Under those circumstances, Schultz had an idea of a new flavour of café and a stylish environment for communicating with friends. After the trip, he prepared the business plan for his vision. However, the three initiators did not want to transfer their business into restaurant industry.
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