In 1971 an english teacher a history teacher and a writer were inspired from the their love of coffee to open a coffee house. They first started by selling just the beans but then they moved on to brew the coffee. Based out of Seattle Washington, this small coffee house name Starbucks grew from the ideas of a man named Howard Shultz. Howard bought into the company in the early 80’s after taking a trip to Italy and being inspired by their culture. His inspiration and ideas proved to be right, Seattle soon became crazy about about coffee and before you know it their was lattes and mochas in everyones hands. With the great demand and success in Washington Starbucks decides expand in North America. Immediately after that Starbucks decided to expand globally and become a publicly traded company. This made Starbucks on the first coffee houses to offer stock options and health benefits to all of its partners.
Starbucks had many factors in the early 1990s thats accounted for their extraordinary success. The first factor is that Starbucks was offering more than coffee in a paper cup they were offering an experience. They wanted customers to feel like it was their third place after work and home. This gave coffee drinkers a whole new way now to be able to socialize or just even read a book in a pleasurable environment. Secondly, Starbucks put lots emphasis becoming a service brand and making people recognize it that way. Even though they did not spend hardly any money in advertising, they were very efficient in providing all the information and selling materials inside of the store. Baristas were encouraged to learn the customers name and to try to start a small conversation with them to make the customer feel good. This also included learning the customers drink and being able customize it they way they wanted it. The third factor I believe added to their success was the fact that they delivered a innovative flavor to the the guest. Starbucks made sure that the customer always had something new to taste. Seasonal flavors and high quality brews. Starbucks prided itself by serving what they believed was the highest quality coffee. They were able to accomplish this and maintain the flavors consistent by controlling they supply chain and maintaing a close relationship with the brewers.
In 1992 Starbucks was still in the beginning stages of establishing themselves as a successful company. In 1992, Starbucks acquired 140 stores and was competing against other coffee brands. The kind of customer Starbucks attracted during this time was white-collar business-type individuals, who were always on the go. The Starbucks business was growing at an exponential rate. Another difference in that time is that people just wanted coffee instead personalized orders. This made it easier for partners to communicate with customers and understand the customer. Starbucks tried to go a more mainstream.Howard Shultz was tried being talked out of the idea but he resisted. Starbucks became more popular because it was now more for the public.
Some other sources of Starbucks’ declining performance were also from over saturation of the market and competition. Many viewed Starbucks’ strategy of clustering twenty or more stores into urban area as excessive store density. Founder of Starbucks Howard Schultz wanted to build a brand name by having a store in every neighborhood. Another source of its declining performance was competition coming from a lot of different areas. McDonalds and Dunkin Donuts began to produce gourmet coffee after seeing the success that Starbucks was having in the market. This was certainly one of the major sources of their declining performance, when Starbucks entered the industry they did not have much competition and once they began to have success others began to offer similar products. Competition had not only come from other shops offering coffee but consumers were introduced to gourmet coffee that could be made at home....
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