Starbucks today is widely recognized as the megabrand for coffee, and there clearly are no close competitors that have its international recognition and scope. Starbucks has grown to employ over “160,000 people and generates about 13.6 billion dollars annually” (Forbes). Much of Starbuck’s success is attributed to a man with a clear vision and drive: Howard Schultz. Howard Schultz’s passion for delivering quality coffee along with a positive café experience has given him the motivational determination to demonstrate exceptional leadership traits. This paper will give a brief overview of the history of Starbucks, and will then investigate the changes that were made after Schultz stepped in. Furthermore, problems that Schultz encountered throughout his time as CEO will also be discussed, along with the key steps he took to bring Starbucks back on to a road of recovery. As a concluding remark, Schultz’s leadership style and abilities will be analyzed in terms of effectiveness. II. A Brief History of Starbucks
Looking at the Starbucks company today, it is difficult to imagine that a company that has over twenty thousand locations in sixty-one countries (Starbucks) was once a single small retailer that had only three employees. In 1971, three academics, Jerry Baldwin, Zev Siegel, and Gordon Bowker, opened a small store at Pikes Place Market based on their collective love for fine coffee-making. Baldwin, Siegel, and Bowker’s initial goals were to expose Seattle to bring a refined coffee culture that existed in the San Francisco Bay Area. The three looked to Alfred Peet, an expert coffee roaster from Berkeley, CA, who taught them the art of dark-coffee roasting. Baldwin, Seagel, and Bowker took on that knowledge to produce their own roasts and blends that were then distributed in their stores.
Ten years later, Howard Schultz, then the vice president and general manager for a Swedish kitchen and housewares, visited Starbucks to see why they were placing such large orders for a particular coffee maker. Schultz was immediately captivated by the aromas and quality of coffee that was offered by the store. He, gained as much insight as possible from Baldwin and Bowker about the entire coffee production process, and later convinced them to join their team.
It was not until Schultz took a trip to Italy, when he began to envision a new Starbucks. Schultz visited many espresso bars and was exposed to a new culture of coffee drinking that we wanted to bring to the United States. Upon his return, Schultz did all he could to convince the managers at Starbucks to get a full espresso bar and begin serving lattes and drinks at Starbucks. Due to many disagreements with the managers on the values and culture that Starbucks should have, Schultz mad a decision to leave and start his own café: Il Giornale. With this venture, Schultz had the executive freedom to create a culture that he passionately envisioned. Schultz’s business plan was widely successful, and within two years, he opened up “three cafes that generated 1.5 million dollars annually” (McGrawhill). With his success, Schultz acquired Starbucks to gain wider reach and growth.
III. New Era for Starbucks and Problems Arising
Now as the new CEO of Starbucks, Schultz faced many difficulties and challenges. The biggest problem that Schultz faced was making sure that Starbucks retained its “soul” in spite of growing into a large corporation. The biggest issues that played into Starbucks maintaining its soul was hiring the right managers and executives on his team, having consistent quality products and in-store experience for all Starbucks stores, and lastly- establishing a positive company culture for both the employees and customers. At the start of his career as the CEO for Starbucks, Schultz was faced with many obstacles to overcome. The first issue he tackled was getting the right people on his team. Lack of a Strong Core Executive Team
With nine stores...