The case study explores the strategies adopted by the world's most successful and famous coffee retailing venture, the US-based Starbucks, over the decades. Information is given about the global coffee industry and the evolution of the specialty coffee segment. Starbucks' entry into the segment is examined in detail. The company's initial years and the role played by Howard Schultz in its success are also discussed. The case discusses Starbucks' product line, and the strategies relating to brand building, store management, human resources and operations. The case also discusses in-depth, the company's growth strategies and its initiatives to globalize.
Starbucks,
generally considered to be the most famous specialty
coffee shop chain in the world, recorded sales of $2.6
bn and profits of $159.5 mn in 2001. It offered whole
bean coffees, espresso beverages, confectionery and
bakery items and equipment in its retail stores.
Starbucks had also diversified into ice creams and tea.
But the bulk of Starbucks' revenues came from coffee
bars. In these bars, people could consume beverages and
pastries besides buying coffee for home brewing. In
2002, Starbucks had 5,6891 outlets in 28
countries.
Many
analysts credited Starbucks with having turned coffee
from a commodity into an experience to savor. Indeed,
Starbucks' stated objective was to emerge as one of the
most recognized and respected brands in the world. In
2001, brand management consultancy, Interbrand had named
Starbucks as one of the 75 global brands of the 21st
century. In early 2002, the company was exploring
various opportunities for expanding its retail
operations, introducing new products and developing new
distribution channels. It was also looking seriously at
international expansion. |
