Starbucks and Its Strategic Moves

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Starbucks and its Strategic Moves

A Term Paper
Presented to
Mr. Philippe Sipacio
De La Salle University

In Partial Fulfillment
Of the Requirements for
Englres
- 3rd Term, SY 2011-2012

By:
Maria Erika Lee
Nichole Sharleen Dy
March 13, 2012
Thesis Statement: This paper seeks to study how effective the business strategies Starbucks has made
throughout its lifetime.
* 1.0 Starbucks and its Strategic Moves
1.1. Effectiveness of Business Strategies
2.0 Brief History of Starbucks
2.1. Birth of Starbucks
2.1.1. Founder
2.1.2. Corporate Profile
3.0 Marketing Strategies of Starbucks
3.1. Corporate Philosophies
3.1.1. Warm Atmosphere
3.1.2. Friendly Baristas
3.1.3. Variety of Drinks
3.2. Institutional Environment
3.2.1. Branding
3.2.2. Good Reputation
3.3. Technical Environment
3.3.1. Taste
3.3.2. Price
4.0 Findings
4.1. Awards of Starbucks
4.2. Effects of Recession
1
4.3. News and Suggestions
5.0 Conclusion

2
Starbucks and Its Strategic Moves
For 41 years, Starbucks has been a strong competitor in the coffeehouse industry. In such a short time they have already established 14,396 branches worldwide. Customers ranging from teens to elderly are usually found there relaxing. Due to this constant flow of variety of people coming in, Starbucks has attracted a wide circle of customers that propelled it to success. This paper seeks to study how effective the business strategy Starbucks has made throughout its lifetime. Starbucks opened its stores on April 1971 in Seattle’s Pike Place Market (Kembell, Hawks, Kembell & et. al.). It first started as a shop selling coffee beans and it was inspired by Alfred Peet of Peet’s Coffee and Tea (Schultz & Yang, 1997). Unlike most businessmen, the founders of Starbucks consisted of Jerry Baldwin, a teacher; Gordon Bowker, a writer; and Zev, a history teacher (Schultz & Yang, 1997).They went into the coffee business not because of money, but rather because they simply loved coffee and they wanted to serve the best coffee beans in Seattle (Schultz & Yang, 1997). Aside from selling coffee beans, Starbucks also sell coffee makers which were supplied by Hammerplast (Schultz & Yang, 3

1997).In 1982, there came a time when Howard Schultz, who works for Hammerplast, got intrigued by Starbucks’ large orders of their drip coffeemakers so he decided to check Starbucks out (Schultz & Yang, 1997). Upon checking it out, he saw how Starbucks was dedicated in serving whole-bean coffee and he realized he wanted to become a part of it (Schultz & Yang, 1997). However, Starbucks initially did not want Schultz to become a part of them, for Schultz envisioned Starbucks as a national company where its name would equate to great coffee (Schultz & Yang, 1997). The Starbucks founders thought that his idea was just too big and risky (Schulz & Yang, 1997).Since Schultz could not just take no for an answer, he showed how determined he was in being a part of Starbucks by persuading Jerry Baldwin to rethink his decision the night he got rejected(Schultz & Yang, 1997). The day after, Howard received a phone call from Jerry telling him that he got the job (Schultz & Yang, 1997). Schultz became the director of retail operations and marketing in Starbucks. In 1983, Schultz travelled to Milan in order to attend an international house wares show. In Italy, he discovered that the espresso bars there were always full of people because their 4

baristas knew every customer and their preferences in coffee (Schultz & Yang, 1997). Italians also considered their coffee bars as a place like their home where they are served with custom-made coffee (Schultz & Yang, 1997). Howard Schultz brought these new ideas back to the United States...
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