Business Issues of Starbucks Coffes

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“Every day, we go to work hoping to do two things: share great coffee with our friends and help make the world a little better. It was true when the first Starbucks opened in 1971, and it’s just as true today.”

Back then, the company was a single store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring tradition of the early coffee traders.

In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) had first walked into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined a year later.

A year later, in 1983, Howard travelled to Italy and became captivated with Italian coffee bars and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community. A third place between work and home. He left Starbucks for a short period of time to start his own Il Giornale coffeehouses and returned in August 1987 to purchase Starbucks with the help of local investors.

From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection.Their mission is: To inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time.

Today, with more than 15,000 stores in 50 countries, Starbucks is the premier roaster and retailer of specialty coffee in the world. And with every cup, we strive we bring both our heritage and an exceptional experience to life.

Starbucks Corporation  is an international coffee and coffeehouse chain based in Seattle Washington. Starbucks is the largest coffeehouse company in the world, with over 17,800 stores in 49 countries, including over 11,000 in the United States, almost 800 in the UK, and nearly 1000 in Canada. The first Starbucks was opened in Seattle, Washington, on March 30, 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. Entrepreneur Howard Schultz joined the company in 1982 as Director of Retail Operations and Marketing, and after a trip to Milan, Italy advised that the company should sell coffee and espresso drinks as well as beans.

Their stores are a welcoming third place for meeting friends and family, enjoying a quiet moment alone with a book or simply finding a familiar place in a new city. Total stores 16,706 (as of Dec. 27, 2009)

8,850 Company-operated stores.
7,856 Licensed stores.

They offer the finest coffees in the world, grown, prepared. Their employees, who they call partners, are at the heart of the Starbucks Experience. Their store partners are committed to coffee knowledge, product expertise and customer service. They believe in treating their partners with respect and dignity. They are proud to offer two landmark programs for their partners: comprehensive health coverage for eligible full- and part-time partners and equity in the company in the form of stock options.


1. The Threat of Substitution Substitutes (Products)
‐ Other beverages apart from Starbucks coffee and tea – Examples include soda, fruit juice, smoothies, water, beer and other alcoholic drinks ‐ Other “quick‐grab” foods apart from pastries, muffins, doughnuts, etc sold at Starbucks. Examples include burgers, burritos, tacos, sushi, snack food Substitutes (Environment/Ambience) ‐ Lower‐end or “less luxurious” coffee places

‐ Places that offer people a place to hang out, chat, relax or even work. Examples include tea houses, fast food places, ice‐cream parlors, side ‐walk cafes, and bars and pubs
2. The Threat of New Entry
‐ The entry barrier for the coffee industry is...
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