Dr. Laura Pogue
May 29, 2011
Specialty-coffeehouse culture is well interwoven into the fabric of American society at this point and we can thank Starbucks for ushering in the phenomenon. Back when three coffee connoisseurs assembled to open the first Starbucks store in Seattle, I’m sure they could not imagine its behemoth future. With the vision of Howard Schultz, Starbucks has grown to become one of the most internationally recognized brands. With distribution that includes company-operated retail stores, global Specialty Operations, and licensing today Starbucks generates over 2 billion in revenues (starbucks.com). This growth, however, was not always a well-organized effort. This case study analysis reviews Starbucks’ position as of 2002 and analyzes its options as it planned to move forward in executing their growth strategy. History
Starbucks began with the idea of creating a chain of coffeehouses that would become America’s “third place;” “a place outside of work and home where people could enjoy a cup of coffee and the company of others. Starbuck’s brand strategy was to create an experience around the consumption of coffee, an experience that people could weave into the fabric of their everyday lives” (Moon & Quelch, 2003). “Three components made up this experiential branding strategy. Starbucks set out to provide the highest quality coffee in the world, in which they sourced coffee from Africa, Central and South America, and Asia-Pacific regions. They also exacted coffee standards by overseeing the custom-roasting process for the company’s various blends. The second piece of the strategy was service. Starbucks trained employees, called partners, to create “customer intimacy” by engaging customers in conversation, remembering names or their usual coffee blend. The last brand component was the atmosphere inside the store. Starbucks focused on creating...