Starbucks

Every morning, millions of people around the world get their cup of coffee from Starbucks, a habit ingrained in their lifestyle and daily routine. The rise of Starbucks to worldwide success in the past three decades demonstrates how a company’s goals and vision, pursued with keen corporate, business, and functional level strategies under strong management leadership has grown Starbucks to a household name and a cultural phenomenon.

Corporate Strategy

Howard Schultz, Chair, President, and CEO of Starbucks, has said, “We aren’t in the coffee business, serving people. We’re in the people business, serving coffee.”1 Starbucks originated in 1971 at Seattle’s Pike Place Market with a passion for sharing world-class coffee with coffee lovers, educating its customers about what great coffee can be.2 That vision is retained in the philosophy and goals of Starbucks today. The Starbucks mission statement is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”3 Starbucks is in the business of not only serving high quality coffee produced with care, but of delivering an enjoyable experience and fostering a sense of community.

Over the years, Starbucks has expanded with a growth strategy, pursuing a broad global market with product innovation. Beginning with locations in the Seattle and Vancouver area, Starbucks has expanded globally to 17,003 retail stores as of October 2011, in over 55 countries.4 Through concentration and market development, Starbucks has grown organically to serve more people worldwide, breaking into the tea-drinking markets of China and the emerging economies of Brazil and Russia.5 By sourcing coffee berries for processing at domestic roasting plants in Washington, Pennsylvania, Nevada, and internationally in Amsterdam, Starbucks grew by backward vertical integration, gaining control over the quality of the roasted beans.6 The growth strategy at Starbucks is extensive, including related diversification...