Starbucks SWOT Analysis
Starbucks was founded in the early 1970’s. Jerry Baldwin, Zev Siegel, and Gordon Bowker were three academics that came together to found the first Starbucks, named for the coffee loving first mate in Moby Dick. The company was founded in Pike Place, a Seattle marketplace over looking Puget Sound. Starbucks began as a shop selling only coffee beans. In the first twelve years, the founders had built Starbucks into a retail and wholesale business with its own roasting facility. A man by the name of Howard Schultz was hired in 1982 as the head of retail sales and marketing. He opened the first coffee bar in 1984. Though the bar was successful, he was unable to convince the founders to expand more into this area. Schultz had left Starbucks and opened his own coffee bar, II Giornale by 1987. Schultz pulled together some investors and bought out Starbucks from its founders. This new enterprise became the Starbucks Corporation. When Starbucks was acquired by Schultz and his investors, it consisted of eleven stores, by the end of 1988, the total number of stores had reached fifty and a mail order catalog had been introduced. The company’s first year of profitability did not come until 1990. In 1991, Starbucks opened its first store in Los Angeles, and its first airport location at Seattle’s SeaTac International Airport. Starbucks was taken public on the Nasdaq National Market in 1992 to fund further expansion efforts. By the end of 1992, the number of stores reached one hundred sixty five, including seventy-three café locations inside Barnes and Nobles bookstores. Starbucks signed a national contract with Sheraton Hotels in 1994. Starbucks began selling compact discs and formed an alliance with Chapters, a Canadian chain of bookstores in 1995. The total numbers of locations at the end of 1995 had reached six hundred and seventy six. In 1996, Starbucks began to expand their locations internationally starting with Japan and Singapore. Starbucks has continued its global expansion over the years into China, Germany, France, Greece, Indonesia, and many other countries. Starbucks has also continued to expand its product range by joining with Dreyer’s Ice Cream and Jim Bean brand to introduce Starbucks flavored ice cream and liquor. They acquired TAZO, a Portland based Tea Company, and launched the Hear Music media bar. They also sell whole beans and ground coffee to hotels, airline retailers, and restaurants. The strengths of the Starbucks corporation include its global presence, reputation, brand image, workplace, ethics, and clustering of its locations. Starbucks widespread global presence has provided extensive brand recognition. It has also provided a strong customer base with the atmosphere they have built into all of its locations. It has more than 13,000 locations globally. The company has built a global coffee brand and a reputation for serving fine products and the great service given to customers. Starbucks has created a brand image that strongly appeals to Americans. They took common coffee and turned it into an elitist product. Starbucks is known as a company that values its workforce. The company has a generous and comprehensive employee benefits package. The benefits include stock options, health care, career counseling, training programs, discounts provide for all workers, full and part time. Starbucks has very strong ethical values, and are known as a company committed to being a leader in social responsibility. They only buy their coffee beans from reliable sources that do not abuse their workers. A unique strength that Starbucks possesses is the clustering of their locations in high traffic areas. They depended on the basis that an important driver of business is the convenience of location. Using a focus on locations that have convenient access to drivers and pedestrians, Starbucks has clustered its stores to dominate particular areas. Surprisingly,...
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