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Starbuck’s Strategy and Initiatives to Return to Profitable Growth

Starbucks first opened on March 30, 1971, as a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market. Founded by three academics including Jerry Baldwin, Zev Siegel, and Gordon Bowker each individual invested $1,350 and borrowed another $5,000 from the bank. However, Zev Siegal later left the company and was replaced by an entrepreneur named Howard Schultz in 1982.

Schultz presented his ideas of expanding and opening Starbucks across the United States and Canada. Although his long-term goals were clear, he experienced much resistance from the owners because they did not share the same vision. Schultz dreamed of Starbucks becoming a national company that holds values and principles. He wanted individuals to be involved in the decision making process and indicated his openness and honesty. Howard Schultz felt that is was important for a company to respect its people, inspire them, and share its success. Something was missing and that something included an atmosphere and bonding with customer’s around a cup of coffee. So he recommended serving fresh brewed coffee, espresso, and cappuccino in addition to coffee beans and equipment. As a result, coffee would serve as “the vehicle” where individuals feel at home, a gathering and social place. This would differentiate Starbucks. Today, the firm has the most respected brand name in the coffee industry and connects with millions of customers daily with exceptional products and more than 17, 000 retail stores in over 55 countries. From my perspective, Schultz’s 2010 strategic vision for Starbucks is quite different from the one he had in the 1980’s in terms of globalization. However, his long-term goal of making the firm in making the store a place for customers to gather with their friends has not changed