United States, 9th Nov 2022 – “This happens every day a million times, but each such moment is unique. The moment when the barista passes the cup of coffee into the customer’s outstretched hand. The moment when connection develops … between the most popular chain of coffee shops on the planet and their connoisseurs in all Uk49s of the globe! Here at Starbucks, people believe to touch and go wherever and manage to make the place a little better.
Is it true? Why do people appreciate Starbucks so much, even though there is a sea of coffee shops of better quality, cheaper, and more diverse? Why everyone should visit here and what unusual chips anyone should definitely pay attention to.
Starbucks Corporation is a global chain of coffee houses and coffee shops. Under its auspices, there are 32,000 establishments in 75 countries of the world (of which 8,000 are located in the USA).
Founded: September 30, 1971, Seattle, Washington, USA.
Founders: Jerry Baldwin, Gordon Bowker, Zev Siegl + Howard Schultz.
CEO and President: Kevin Johnson.
Chairman of the Board of Directors: Myron Ullman.
Revenue (2021): $8.05 billion
Net income (2021): $815.9 million
Capitalization (2022): $104.64 billion.
Number of employees: 383,000.
Strong coffee roasting, caring attitude to customers and the release of seasonal, limited series of drinks have made their signature features here.
How it works: what makes Starbucks stand out?
It is impossible to achieve such success without verified corporate principles. Chief among them is the variety of quality products. Starbucks has about 90,000 drinks. True, in each individual coffee shop anyone won’t be able to try all of them – “scattered” in different countries, and the assortment differs depending on the region. However, no buyer will be dissatisfied – the choice is huge in any case.
The second principle is a convenience for the consumer and a sincere desire to please him in everything, even in small things. For example, Starbucks specialists regularly study people’s preferences in music – and include on the points those tracks that consumers like the most at a particular time of day or day of the week.
One of the most important principles is following the rules of the so-called “loyal capitalism”. The company does not refuse super profits, but tries to invest in development, and to please the consumer:
purchases quality ingredients for drinks and food;
opens new points in places convenient for the general population (and people feel good, and profits increase);
helps to release music albums and films for both beginners and eminent authors.
In addition, the principles of the coffee magnate include cooperation with reputable suppliers of the world, as well as attracting new investors. All this accelerates the development of the company and makes the products even better!
Why did Starbucks become successful? Secrets of the coffee house
There are many coffee houses in the world, but few can compare with Starbucks in terms of popularity and love from consumers. One of the secrets of success lies in the fact that since 1971, since the foundation of the future giant, employees and owners of the establishment (then still a store) have been focusing on the individualization of each client. For example, a certain gentleman comes to buy roasted beans, and not only will give him a full consultation on the type of coffee he is purchasing, Starbucks specialists will also take an interest in his well-being and success.
Later, when Starbucks turned into a full-fledged coffee shop, persistent traditions were added. Strictly speaking, the owners of the company try not to change:
the concept of the institution, including the style;
interiors of coffee houses;
style of communication with customers.
Now, of course, it’s impossible to talk to everyone individually – the attendance is very high, but coffee cups with the name of the buyer pour warmth in the soul. Now raise this attention to the client on a scale of several tens of thousands of points – get the effective work and success of the enterprise!
Investing in Starbucks Teamworks is a common thing, but not a single dollar goes into the void, without returns and without prospects. Before committing money to a promotion, expansion, or new hardware purchase, Starbucks’ analytics departments do research on:
return on future investments;
reactions of a regular consumer to certain changes.
This approach results in the fact that practically not a single investment of the company over 50 years of work has gone to waste, and this is an important part of success.
Founders: Once upon a time, three students decided…
Usually, large world-famous companies are created by more than one person; most often, two people take part in the opening of future giants. In the case of Starbucks, there are three founding fathers:
The guys studied together at a college in San Francisco, all of them didn’t really bother about developing a business, and everyone was doing their own thing. But already towards the end of the training, thoughts began to creep into my head – the guys need money, the market is busy, all three are very fond of coffee, people want to see something new and very high quality …
It is interesting that at first all of them had a mediocre attitude to entrepreneurship.
The beginning of the journey: foundation and first experiences
It is necessary to mention the role of coffee in the life of Americans in the early 70s of the XX century – it was minimal, unlike even the Soviet Union, whose citizens liked to drink a cup of aromatic drink in the morning (most often of disgusting quality). The situation was slightly better in the countries of Western Europe. In the USA, the drink was known, partly loved, but preferred:
soda or juice.
New entrepreneurs reasoned as follows: people do not like coffee not because no one can understand its taste, but because people have never tried a really tasty and high-quality product. In addition, the people do not know how to cook it, hence the cool attitude.
On September 30, 1971, the first Starbucks store opened in Seattle. He specialized in the sale of roasted coffee beans and consumer advice on the preparation of the drink and the choice of variety. Prepared and poured into cups only for those customers who wished to taste the purchased product. The trick is that at first, Starbucks had very few clientele – a couple of people a day: the trinity had a lot of time, and willingly spent it communicating with people.
Aspiring entrepreneurs thought about the name and logo of the company. Not everything is simple here – sometimes all of them say the name of the store in honor of the hero of the novel “Moby Dick” Starbuck, but this version was denied at the time by Bowker. And the logo still refers to the marine theme – a siren that lures sailors with its magical singing.
In its first year of operation, Starbucks purchased coffee beans from other standard able coffee shops. The quality of the product was acceptable, the buyers liked it, and things were slowly but going uphill (even at a time when there was no reputation or regular customers yet), but soon the guys realized that:
Anyone can take raw materials much better and for less money;
It would be nice to inspect the goods before paying;
It would be nice to get discounts for regular purchases of large quantities of coffee.
The decision matured quickly – Starbucks refused to cooperate with an intermediary, switched to direct interaction with farmers. Delivery was a little more expensive, but the quality of the product turned out to be better, and the price ultimately fell by almost half. And profitable, and attractive to buyers!
Conquering the hearts of consumers: how it happened
By 1981, businessmen already had:
own braziers for roasting grains;
5 stores in Seattle;
its sales office, which was engaged in the supply of coffee to shops, small cafes and restaurants.
Thanks to a special method of roasting (stronger and longer), the partners managed to obtain a product that is unique in its taste, which caused an influx of popularity among consumers. In addition, the guys were engaged exclusively in manual grinding, which gave a certain chic, and quickly became a trademark.
Tellingly, in 1981 a salesman for various coffee and tea utensils, became interested in a small Seattle company that was buying more manual coffee grinders than all other customers combined. After some time, this person will enter the board of directors of Starbucks.
The guys were not even broken by the fact that closer to the mid-80s, the so-called “coffee crisis” began in the country – sales of both grain and the finished drink fell sharply. Entrepreneurs quickly increased the production of Specialty coffee, which naturally won over the consumer. For example, in 1983, Starbucks managed to capture 3% of the market in this area. It would seem that there are not very many, but these are only 5 stores, one sales department and a small bean roasting enterprise. Perhaps this is the first moment in the history of the company, when she managed to take the heights not by quantity or active advertising, but only by the quality of products!
New owner – new horizons: it’s time for Schultz
Howard Schultz, who was surprised by the volume of purchases of coffee grinders, got a job at Starbucks in 1982, quickly gained prestige among the founders of the company, and in 1987 … bought the company along with all the equipment, all points and employees. This event became a landmark – Baldwin, Seagle and Bowker, of course, thought about profit, but did not build grandiose plans to bring their offspring to the leaders of the US market. And even more so, the guys did not think about conquering the world community of coffee lovers. Schultz, on the other hand, thought big – he did not want to stay too long in Seattle, his soul longed for expansion, and a rapid one at that.
Howard’s scope impressed even seasoned businessmen! Almost immediately, he set off to conquer the domestic market of the United States and succeeded a lot in this. Partly due to the fact that he began not only to roast and grind coffee, but also to sell the finished drink, in fact, having converted stores into full-fledged coffee houses (initially, only espresso, but it was also quite popular). New outlets have been opened in:
in the west and northwest of the country.
Consumer demand has also grown. This is clearly indicated by the fact that in 1989 Starbucks roasted almost 1 million kg of coffee beans (907 tons). By this time, the network had already grown to 33 points in the US and Canada, but Schultz was not going to stop. As he himself said, “this is just the beginning.”
In 1988, Starbucks made a kind of revolution in the world of aromatic drinks – Howard opened the first mail-order coffee delivery service in the United States with the possibility of receiving goods both at Starbucks points and at post offices. True, working with individuals did not work out – few ordinary consumers were ready to spend money and time waiting for a kilogram or two of roasted beans. About 30 stores in different states used the “delivery catalogues” – sent orders regularly, which seriously increased the company’s revenue, giving it the opportunity to further develop at an accelerated pace.
In 1992, Starbucks’ income was more than 75 mon dollars, and the company’s value was approximately 270 million. Already at the end of the same year, income from sold shares amounted to more than $ 0.5 billion (1.3 million in 1987), and this made it possible by 1994 to bring the number of shares to more than 300. True, so far only on the market of the United States and partially Canada.
Contact Person: Starbucks
Country: United States
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