Introduction to Starbucks Case Study

PRINCIPLES OF MANAGEMENT ASSIGNMENT 1: STARBUCKS CASE STUDY Summary The history of Starbucks starts in Seattle in 1971. Three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who all had a passion for fresh coffee, opened a small shop and began selling fresh-roasted, gourmet coffee beans and brewing and roasting accessories. In 1981 Howard Schultz first walked into Starbucks as a sales representative for a Swedish kitchen manufacturer. He immediately wanted to work for the company as he got so inspired by Starbucks but it took him a year to finally persuade the owners to hire him. The owners were reluctant initially to hire Schultz because they thought his style and high energy might not blend with the existing culture of the company. However in 1982 Starbucks hired Schultz as the new head of retail operations and marketing and shortly thereafter was sent to Milan to attend an international housewares show in Italy. When he arrived, Schultz found himself infatuated with the exciting coffee culture of Italy. Schultz went to Verona and had his first caffe latte. But he observed something more important than the coffee. The cafe customers were chatting and enjoying themselves while sipping their coffees in the elegant surroundings. That’s when Schultz was struck with an inspirational idea. "Why not create community gathering places like the great coffee house of Italy in the United States?" However, Schultz's idea did not go down well with Baldwin. Baldwin was not ready to get into the restaurant business nor to have anything distract him from his original plan of selling whole beans. Schultz, however, branched out on his own and opened a coffee house named after Italy's largest newspaper, The Daily, or Il Giornale. Two months later, the new store was serving more than 700 customers a day, and it was selling 300 percent more than the Starbucks locations. In 1987 the owners of Starbucks Coffee Company decided to sell their coffee business,