Starbucks

Starbucks: Someone Come up with a Snazzy Title!

Deric Daugherty, Tammie DePalma, Juliana Naugle, Nikki Pivirotto

In 1971 when Starbucks was first conceived, none of the founders probably ever fathomed that their single, small Seattle-based coffee shop would one day blossom into a world-wide brand worth an estimated $17.1 billion dollars (Saporito). Somewhere along the way Starbucks discovered how to sell a small cup of coffee for no less than $2.00, when the United States national average cost is only $1.38 (Casserly)! In this analysis, the history of Starbucks, their business strategy, as well as their current and future international plans will be examined and discussed.

Starbucks was founded in 1971 in Seattle’s Pikes Place Market by three scholars named Jerry Baldwin, Zev Siegel, and Gordon Bowker. All three men had a common love for fine coffees and teas. Each of the three partners invested $1,350 of their own money into the store and then each borrowed $5,000 from banks to fund the rest of the venture. The name “Starbucks” was a tribute to Starbuck, the first-mate from Herman Melville’s Moby Dick who was a coffee lover. The logo that has remained relatively unchanged to this day was drawn by an artist friend of the trio’s and depicts a two-tailed mermaid with the classic Starbucks logo around her (Starbucks Case). An interesting fact that is relatively unknown is that when the three originally opened the first Starbucks, it only sold whole-bean coffees and coffee products, no coffee by the cup! Occasionally they would offer samples, but did not make their profit by brewing coffee, but selling the whole coffee beans.

At first, Starbucks ordered its coffee beans from Peet’s Coffee and Tea in Berkeley, California, but toward the end of the first year decided to buy a used roaster and began roasting their own coffee beans in a nearby run-down building and transporting them to the shop. Starbucks was doing very well and opened a second store only one...