The Starbucks

Introduction

Starbucks is a company, which is found international. Starbucks is a very successful franchise always considered while looking at the history. The coffee company has undergone evolution until it became known for the quality and quantity of products it is producing now. The workflow in the company is capable of producing coffee of the generation X and Y. The kind of workforce that is applied in the Starbucks Company includes sophisticated technology and youth workforce. The kind of coffee Starbucks produces varies from venti to vanilla latte without foam, which is sugar-free and non-fat coffee (Bussing-Burks, 2009).

The coffee price usually varies from $6 dollars onwards. The Starbucks Company is at the top because of its marketing strategy and mission statement. The mission statement was the force behind the Starbucks company expanding in the past. The company has been still growing in the groundbreaking technology and interest even in the present. Starbucks has a lot of social responsibilities. This proves that the company is concerned over the social environment. The social concern of the company mainly involves the concern over the carbon footprint emission. Besides, the company is greatly concerned over the future and constantly changes its innovation policies (Pride & Ferrell, 2009).

Three friends Gordon Bowker, Jerry and Zev Siegel started the Starbucks Company under the influence of Alfred Peet. Alfred Peet was an owner of a coffee and tea company called Peets. This made the three friends have an idea of opening a store, which would trade premium coffee beans and apparatus specialty. This coffee business would operate at Seattle’s Pike Place Market. The first coffee roasting business was started in 1976. The three friends bought green coffee beans from Peets and conducted their business at 2000 Western Avenue. They started with roasting coffee beans at fast food restaurants. Starbucks become known as the largest coffee roaster in Washington in 1980. The coffee roaster had six retails outlets. Zev Siegel decided that it was the time for him to move on, so his shares were bought by the other two friends (Gill, 2008).

Later, one of the Starbucks suppliers, Howard Schultz, became a head manager of the company. After 10 years of the company evolution Jerry Baldwin hired this man to be a manager. Howard had a lot of passion for coffee roasting, and ordering brewing plastic thermoses made him earn the set. A show of international housewares was held in Milan, Italy, where Howard was present. At this show, Howard developed the Starbucks future concept, which contained the policy of the company, based on which it is what it is known today. Howard could see how Italians passionately loved coffee, as he was having his coffee shop in Verona. He observed a lot of activities in the coffee shop. People could meet other people, drink their coffee for hours, have the benefit of the coffee house and read. This observation made Howard have an idea to start similar business in the USA and he was determined to move the Starbucks Company to the next level (Bussing-Burks, 2009).

Baldwin did not agree with the new idea, but still he allowed one of their stores to be an espresso bar. Howard had a lot of faith in his idea, and in 1985, he opened a coffee store. Howard named the shop II Giornale, and his aim was to sale espresso drinks. Later on, the initiative became a marvelous success. In 1987, Howard and other investors bought Starbucks from Gordon Bowker and Jerry Baldwin for $3.7 million. Howard could not combine II Giornale and business operations of Starbucks. This combination of Starbucks operation would later result into the present Starbucks Corporation (O'Leary & O'Leary, 2004).

Howard had the aim of opening of 125 stores in the period of 5 years after buying the corporation, but instead he could open 165 stores. The company was growing at a very high rate. This growth made the company to go internationally in 1992 by opening other stores outside the United States. The company has been currently carrying its business operations through the Tazo Tea Company, Starbucks Online Coffee and Blend Ice drinks Frappuccino. At the present moment, Starbucks carries out its business operations in 30 countries worldly and in more than 6000 locations (Pride & Ferrell, 2009).

The Starbucks Company has a mission that is behind the success of the business. The mission is aimed at the human spirit, where the company nurtures and inspires. The human spirit is nurtured by one neighborhood, one person and one cup together. This is achieved through different principles. The first principle is our coffee. Starbucks through our coffee continues producing quality coffee. When coffee is of quality, they can maintain, they expand the market they serve. Quality coffee is achieved through ensuring that coffee beans are the finest, thatr a lot of care has been given to them in the roasting process, and that payment to farmers is increased. Through care and consideration of the above, Starbucks has been able to achieve the coffee mission. The second mission is partners (Gill, 2008).

They consider the coffee business not as a job, but as a passion. Each person is represented with a room through the company’s embracing diversity. The company advocates dignity and respect among working people. The third mission that has made Starbucks come into success is the consideration of customers. The company considers improving lives of customers, engaging and connecting freely with customers. This can only be achieved through guaranteeing customers a good and reliable beverage. The main mission in regard with customers is to be able to connect with humans. Another consideration concerning the mission is stores (O'Leary & O'Leary, 2004).

Stores should create a belonging feeling to customers. The place need to be conducive for meetings, and customers should enjoy speeding time in the stores. The services of the company should be fast with the customers’ pace. The next consideration is neighborhood. The store exists in the community so the company should consider the positive relation with its neighborhood. Starbucks plays a positive role through connecting the community with customers and partners. A lot of consideration is given to maintaining a potential and social responsibility. The shareholders’ mission is also important. Starbucks rewards shareholders, since they play a role in ensuring the success of the company (Pride & Ferrell, 2009).

In 1987, Howard made the Starbucks Company become a worldwide one. This was the time when the two friends sold the company. Howard bought the company together with other investors and made it public. They would open 125 new stores in the next 5 years. The II Giornale shop together with other six shops became Starbucks. This aim of Howard was to expand the company to 165 stores. Today Starbucks has 8000 cafes found in 30 different countries. The annual revenues collected sum up to $7.5 million. Through the aim of Starbucks becoming worldwide, the company has a venture in producing coffee liqueur for adults. Coffee liqueur is sold in 750 ml bottles. The aim is to sell their coffee, liquor and Starbucks name (Gill, 2008).

This coffee liqueur contains 20% alcohol, which is combined with 100% Starbucks coffee. This idea of coffee liqueur is put into practice through the partnership with Jim Beam Brands, who is the main wine industry player. This worldwide business idea is designed due to the analysis that 50% of coffee clients also consume coffee liquors. This combination of coffee and liquor has made Starbucks be the first company in the liquor-coffee business. Starbucks has also participated in it with other companies worldwide, such as the Pepsi-Cola Company and the Ice Cream Company, like the Dreyers Grand. Such worldwide participation has made the Starbucks Company offer coffee beans, machines for coffee makers, accessories brewing and espresso machines, which are high-class. Coffee drinkers and the company’s patrons continue to enjoy products from Starbucks through their collaboration with other companies. In July 2007, Starbucks was registered to be the top in the coffee industry (Bussing-Burks, 2009).

The establishment of new customers and new favorites led to Starbucks launching a new product in the summer of 2003.The CEO of Starbucks made it clear that the new launch is aimed at increasing the channels of distribution and increasing selling. This will become possible through selling its products in grocery stores, incensed stores, and foodservices or from alliances of the business. The worldwide business of Starbucks also became diverse through opening Hotspots T-Mobile. This T-Mobile hotspot made it possible for the company to have 2000 hot spots in the USA by the end of 2002. This resulted in the dream of having 2600 wireless vend stores by the last part of 2003. Howard was aimed at having an increase in the experience of the third place for customers, who were business travelers, students and network surfers (Pride & Ferrell, 2009).

Howard made a promise that Starbucks would increase by 125 stores after buying the company. This was the first strategy that Howard made, and he had achieved it since the company increased to 165 stores. This strategy was aimed at motivating workers and stockholders, and portraying a positive image to the public. Howard paid a visit to Italy, which resulted in the idea of opening a coffee shop. This opening of a coffee shop would later result to the present Starbucks Company. In meeting in March, 2009 Howard, the CEO of the Starbuck Company, made a long-term strategy that the company would follow. Starbucks has been still maintaining a constant balance sheet, which is profitable, and operations ensure solid income. The strategy is aimed to deal with the customers’ mission and to maintain a high level of trust in the brand. The main focus is laid on producing products, which are of high quality (Gill, 2008).

Producing high-quality products relates to the neighborhood mission. While producing of a product, care is given to the environment. Starbucks ensures that emitted carbon footprints are not dump to the environment. The company under Howard’s strategy aims to wear the shoes of customers and respond effectively to their needs. Starbucks puts a balance between producing quality products, which are authentic and have a meaning for the company. Troy Alstead, the vice president, comes up with two strategies ensuring that there is a strong focus on the financial position. These strategies will be achieved by the company through escalating profits in the stores. Profits will increase in the stores through investing in technology and making operations efficient. The workflow in the stores should be fast and accurate. An increase of the operation in the stores will be only achieved through the use of modern technology (Pride & Ferrell, 2009)

 Machines and working equipment should be based on the modern technology. Technology has been evolving and is aimed at making work easy for people. The existing stores should work on producing products, which meet the customers’ need. The stores can achieve this through ensuring that coffee entering for roasting is of high quality. Coffee and tea produced to customers in the stores should be reliable. This can be achieved by ensuring the product is timely reliable for customers. The Starbucks Company will increase its profits by means of managers ensuring that the equipment and machinery are available. The company also needs to train workers. When having skilled employees, the company’s product production will be fast and quality. Troy also advocated that the company should put the cost structure in place, according to the modern business strategy. The plan of modernization presupposes that by the 2009 fiscal year the company’s structural expenses will be $500 million (O'Leary & O'Leary, 2004).

Troy, the company’s vice president, advocated that the company should elaborate key investment initiatives. This investment will consider putting focus on the growth of consumers’ products. This can be done through increasing consumer products in the coffee market coverage region. Expanding the market will make the strategy of consumer products attained. The growth of licensed foodservices and stores will also make the key investment initiatives. An increase in the channels and licensed stores will make Starbucks increase its production and grow financially. Troy clearly stated that Starbucks entered in the $17 billion instant coffee market was a strategy. This would enable the company to launch instant coffee to be ready to brew, which will increase Starbucks performance (Bussing-Burks, 2009).

In the meeting, Howard could appoint new members in the board. Kevin R. Johnson and Sheryl Sandberg are new appointees in the board. These two new members have a good strong background in dealing with technology. This serves as a strategy, since the management of the company has been improved. The two will make the business strategy extensive and have experience in operation. Starbucks shareholders proposed a strategy, whereby in the exchange a program option is given to one time stock. This will result in less exercise prices, since an exchange opportunity has been given once. The program will serve to reduce the company’s expenses, since its exercising is expense-neutral. In 1991, Starbucks formulated a policy aiming at making partners act as business owners. The program was aimed at providing annual grants to eligible partners. Board directors and senior leaders will not be awarded according to the program (O'Leary & O'Leary, 2004).

The Starbucks Company’s initial product, when the company was started, was roasted coffee. The company has grown from roasting coffee to producing a wide variety of products. Starbucks produces a regular coffee beverage and decaffeinated coffee. Italian espresso drinks are produced in a wide variety. Coffee beans, which are roasted freshly and are whole-bean, can be offered to customers. These whole fresh beans will be grounded in the company, and customers will carry them in distinctive packets home. Customers can also select fresh pastry and tea, juices, sodas and coffee equipment and hardware in the Starbucks Company. In 1997, the Starbucks Company come up with an espresso machine, which could crust both ground coffee and espresso pods (Gill, 2008).

This machine was introduced as the Starbucks Barista, which was an espresso machine. In 1997, the company came up with Power Frappucino beverage containing vitamins, proteins and carbohydrates. Power Frappucino is a version of Frappucino blended company beverages. Starbucks introduced a new product in 1998. The product was named Chai Tea Latte. Chai Tea Latte was a result of combining honey, milk, black tea and exotic spices. Starbucks stores produce 61% of coffee beverages, 16% food items, 15% of coffee from the whole bean and 8% of products and equipment relating to coffee. A larger coffee store will sell many coffee products. When the store is small, it will sell generally the coffee beverage, little hardware and restricted coffee that is whole-beans (Pride & Ferrell, 2009).

Under the influence of the store manager Starbucks has been selling blues and special jazz CDs. These CDs are from the stores background music. The store manager was initially working in a music industry before moving to the Starbucks Company. In that month the store manager selected a particular song to be a background song of the store. Customers loved the song and had a lot of compliments to it. Customers started demanding for the song and the music tape. Capitol Records Library CDs are the ones Starbucks uses for the sale of tapes and CDs. Customers have been still demanding for the music played in Starbucks stores, and this adds to the company’s production line (Gill, 2008).

The promotions of new coffee blends is done by means of CDs and tapes, they sell. Starbucks sold books in the Oprah Book club. The profits were too directed to support the literacy fund of the company. Starbucks in China produced children’s cups having animal faces. The business was not successful, since cups were breaking and causing choking to children. The coffee machine in China produced cups that were melting and overheating. These cups were replaced with plastic ones from the U.S. and Canada. The cup selling is a business in the Starbucks production line (O'Leary & O'Leary, 2004).  

Starbucks has been entering into the production of distilled spirits. Coffee liqueur and cream liqueur were launched by Starbucks in 2005. Coffee liqueur is from 100% coffee blended with 20% alcohol. Coffee-liqueur tastes more of coffee and is created for adult consumption. This business opportunity is aimed at maintaining Starbucks customers and increasing the market. The coffee liquor beverage sales the wine industry identity, Starbucks identity and the coffee-liqueur identity. Coffee liqueur is sold in 750 ml bottles resembling a cocktail shaker with a lid for measuring. The bottom of the lid contains the Starbucks logo in a reverse color. The 20% liquor is from the Jim Beam Company, which is the top manufacturer in the wine industry. Manufacturing, distribution and developing coffee liqueur are performed by the Jim beam Company (Pride & Ferrell, 2009).