Starbucks History, Development, and Growth
Starbucks began as a small company who provided coffee to fine restaurants and espresso bars. It has since, over the last twenty-one years, become the largest retail coffee company in the world. Starbucks has seen its company grow from having a mere 17 stores in 1987 to having currently 5, 688 locations globally. This amazing expansion can be attributed to Howard Schultz, who bought the Starbucks name fifteen years ago.
A large reason Starbucks has done so well for almost two decades can be attributed to changes of the coffee image among consumers. The recent popularity of specialty coffee is due to four new consumer trends: 1) the adoption of a healthier lifestyle, which led people to replace alcohol with coffee; 2) coffee bars had become a place where people could meet, and talk; 3) people developed a liking of affordable luxuries, and specialty coffee became the beverage to drink; and 4) consumers had become more aware about coffee, as its popularity quickly spread throughout North America. From 1990-1998 retail sales of specialty coffee has seen an increase of 18.5%. Because of coffee’s newfound popularity, Starbucks quickly began to take advantage of new ventures.
This would involve partnerships with other firms, and would allow Starbucks to create even more brand awareness without having to incur high costs. With this high demand, suppliers are very willing to do what it takes to work with Starbucks, and they realize that anything less than superior work will not be tolerated. There are also many parts of the organization that could be affected by its growth. However, the product does look promising overseas, specifically the Pacific Rim where there is already a market for cold coffee beverages. The partnership with Dreyers is a joint venture, and is an affiliation that allows Starbucks to get its name into the grocery channel, and hit an entirely new customer base. Just recently, Starbucks has introduced espresso carts to its lines of business. Computerized roasters were put in place to guarantee consistency, however roasting techniques were built into proprietary software to ensure that if a roaster were to work for another company, they would be unable to give away this vital information. By creating a type of work atmosphere with employees wanting the company to succeed, and rewarding the for it, Starbucks has achieved more in the last ten years than most businesses could ever dream of. Finding enough good people that could reproduce the values, culture and services would become a continuous challenge. It has pursued such projects as a direct mail program, which helped increase sales and transaction sizes, as well as introduce its customers with a wider range of products. They were also provided with health insurance, disability, and life insurance. They focus on the building of its supply chain operations to eliminate redundancy and maximize efficiency. Starbucks has created agreements with retailers, wholesalers, restaurants, and service providers to carry its specialty brand of coffee. They have been instilled into every employee, and every employee believes in them. Maintaining a fresh product throughout the stages of the business, from exporters to the final consumer, has been precedence.