Starbucks case study

STARBUCKS COFFEE COMPAGNY

INTRODUCTION

The company we chose is called Starbucks Coffee. This is the largest coffee company in the world, with more than 17 000 stores in 50 countries.

We chose this entreprise because we like coffee and this brand presents specialities that we like :

• It sells exclusively its coffee brand. 
• It’s cool and green.
• We find that starbucks are warm and nice places to drink good coffee and eat well.
• There is a close relationship between employees and customers. For example, when you order something, the client gives his name and the employee will call you whenever the order is ready.
• They make all types of coffees of all sizes.  

THE BEGINNING

The history of Starbuck started in 1970 when three friends : Gordon Bowker, Jerry Baldwin and Zev Siegl, were having lunch.

They shared the same passion for cinema, literature, gastronomy and coffee. Gordon explained that he was fed up ordering his coffee in Vancouver where he managed to find a quality producer. Indeed, at that time internet did not exist so it was harder to buy something from another country. Moreover, as a big fan of expressos, and after a trip in Italy, he said he couldn’t drink anymore of these coffees, that he qualified as dishwater.

That’s why, he proposed to his friends to open a shop where Seattle people could finally drink good coffee. The two other friends were delighted by the idea and the project. The timing for this project was perfect. In fact, due to the bankruptcy of Boeing Inc, commercial rental crashed down and they could rent a place for a cheaper prices. However they still had to find a minimum amount of cash to start the business.

After having saved $1500 dollars each and having borrowed $5000 at the bank, they could open their first shop in Seattle in march 1971. Gordon Bowker found the name of Starbucks in the book of Herman Neville, Moby Dick. Amazingly, the decoration of the shop (navy style) and the logo representing a mermaid are two other references of Moby Dick.

Indeed, he used his passion for literature even if the name of Starbucks doesn’t have anything to see with coffee.

The first shop was far from suggesting coffees consuming as we can have now. It was more a specialized grocer’s shop with a cosy decoration. At the beginning they sold roasted coffee by weight or in a bag, tea, spices and coffee machines but also thermoses and cups. However, the customers could still have a tasting of coffee or tea. There main objective was to educate the consumer by making him discover and taste quality coffees. Later, this economic model was going to be transformed radically.

To reach this objective, the three partners put themselves in search of a quality supplier and it’s finally in California, more precisely in Berkeley, that they finally found him.

His name : Peet's Coffee & Tea was founded by Alfred Peet in the 50’s.

His establishment was famous in all the United States for the quality of its grains, perfectly roasted. The trio and Peet thus concluded an agreement. Peet's Coffee & Tea will supply Starbucks with roasted coffee and in exchange, Peet agrees to train Bowker, Baldwin and Siegl in the subtleties of the roasting.

That’s why during all the year 1971, the trio followed one another so alternately in Berkeley to learn the art and the way of preparing coffee beans. This fruitful collaboration lasted 1 year.

To increase the efficiency of their shop, the trio divided up the tasks. Siegl took care of the day to day sale and the management. He was the only employee. Baldwin was particularly in charge of the purchases of coffee. And Bowker was responsible for the marketing, he created the advertising. In one year they managed to get 150 customers per day.

That’s why in 1972, a second shop was opened.

So it is well known that at the beiginning, Starbucks specialized in Coffee. The founder Jerry Baldwin denied restauration. But after the sale of starbucks assets, everything changed and the initial idea disapeared with the start of restauration. This turnover changed completely the nature of the company and their influence.  At the end of  the 90’s, Starbucks became a franchise.

(Franchise means an authorization granted by a government or a company to a group enabling then to carry out specified commercial activities.)

Starbucks is composed of 51% of its self and 49% of franchise.

So Starbucks offers a huge range of coffee, espresso and tea as well as ice cream and other alternative drinks because it is still their main sector of activity.  

DEVELOPMENT 

Strabucks has evolved a lot throughout the years. They always maintained a good image by modifiing their strategies. Their logo, their presence and their branding have met the challenges well and helped to create one of the most recognizable brands in the world. One of the key man in Starbuck’s history is Howard Schultz, who helped the company in becoming an enormous business worth $84 billion.

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