This is a report about Starbucks PLC. Starbucks is a global coffee shop chain, with 20,891 stores throughout 62 countries. Along with many other business objectives, the company has been focusing on growth and expansion. There are two different types of growth that have to be distinguished. Internal or organic growth, which involves investing in already existing products or developing new ones within a business, these investments are made with the primary goal of attracting and satisfying customers. The investments will usually be financed by bank loans or retained profits. External growth involves much larger amounts of money and resources from other companies. This type of growth is more risky, can however also generate larger amounts of profit, faster.
Starbucks was founded in Seattle in 1971 and focused primarily on organic growth during roughly the first decade of its existence. During the 1980s the sales of coffee within the US were falling, however the sales of specialty coffee were increasing. This created an opportunity for Starbucks because its primary focus is on selling different types of specialty coffee. The sales of specialty coffee went from being at 3% in 1983 to 10% in 1989, giving Starbucks a larger market to operate in. Although this expansion in the market meant that Starbucks would have more competition, Starbucks only profited from the increased customer base in the following years and decades. This is because of their superior brand image, quality, and business strategies as compared to other coffee shops. After having generated some profit, Starbucks opened several additional shops in Seattle, continuing the organic growth of the company. By 1986, there were six stores operating within Seattle. As seen on the graph1987 was a year that brought great change to Starbucks. In this year, former owners sold the chain to a man who had previously been employed at Starbucks, Howard Schultz. Shorty after the purchase he...
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