Starbucks Paper

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Coffee has conquered the world because nowadays almost any person has at least 1 caffeinated drink from specialty coffee stores like Starbucks, Peet’s and etc. However, in 1980s specialty coffee stores were small, independent distributors, and were not that popular because most people were drinking instant coffee. Howard Schultz was impressed with the Starbuck Coffee, so that he decided to join the company later. In 1983, Shultz went to Italy, where he experienced the Italian espresso bars. It was where he saw an opportunity for the Starbucks, re-creating Italian coffee culture in the United States. However, managing partners were not interested in entering this kind of business because the thought it was similar to restaurant business. Therefore, Shultz left Starbucks in order to open his own specialty coffee shop, named Il Giornale, in 1985. The store became popular and it could attract more 1000 customers a day within 6 months of the store’s opening. Shultz continued to raise money and in 1987 Il Giornale bought Starbucks. The goal of the new company was to “identify and reaching to households in specific areas all over the country, exposing them to the brand and its distinctive benefits, introducing them to new beverages and beans, and helping them associate Starbucks with fine coffee and sociability” (Reader, p60). Shultz believed that the market for specialty drinks was enormous so they had to move quickly. Main drivers to success of the company were ideas to create premium products, rapid expansion of stores, and creation of a strong brand. In order to make the company to be known, in 1988 the business issued its first mailing catalogue, which was sent to customers in all 50 states. This helped to build brand awareness. In 1990 the company had 75 retail stores. Shultz knew that he could not control everything by himself therefore he had make some investments in management talents. He knew that it would be expensive, however without them the company could...
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