The first Starbucks location opened in 1971. The name is inspired by Moby Dick’s first mate.
This name and the mermaid logo were inspired by the love of the sea, from Starbucks original location
in Seattle Washington in the heart of Pike Place Market. Starting as a single shop specializing
in high quality coffee and brewing products the company grew to be the largest roaster in
Washington with multiple locations until the early 80’s. In 1981, current CEO Howard Schultz,
recognized a great opportunity and began working with the founder Jerry Baldwin. After a trip
to Italy to find new products, Schultz realized an opportunity to bring the café community ...view middle of the document...
According to Garza by 2004 Starbucks had reached 1,344 locations.
Updated history and Current Status
Today, according to the Starbucks website, they have 16,706 stores (as of Dec. 27, 2009) in 50
countries. In 2009 they made strives socially as they opened the Farmer Support Center in Kigali,
Rwanda and became the world’s largest buyer of Fair Trade CertifiedTM coffee.
Their mission statement from the company profile is as follows:
“Our mission is to inspire and nurture the human spirit – one person, one cup, and one
neighborhood at a time.”
Their core competencies can be defined as high quality coffee and products at accessible locations
and affordable prices, provided a community to share in the coffee drinking experience,
and variety of choices. They also value ethics and good business practices and are a leader being
voted one of 2010’s most ethical businesses by Ethisphere magazine for the 4th year running.
Starbucks is facing its own struggles however as it saw sales start slipping before other companies
did in the recent recession. According to Melissa Allison in her article Starbucks has a
new growth strategy — more revenue with lower costs, Starbucks has closed 900 stores and
eliminated 34,000 jobs. Starbucks new strategy is to refocus on some of the areas that decrease
risk and up front investment. This includes expanding foreign stores, with aid of partnerships
that share risk and costs, selling VIA instant coffee and other products in retail and convenience
stores, and reinvigorating the Seattle’s Best Brand coffee.
A statement from CFO Troy Alstead this March paints this picture:
“We clearly hit a wall and didn’t do very well in the 2007/2008 time period. From here
forward, when we grow Via, Seattle’s Best Coffee and consumer products, there’s less
investment for each dollar of revenue.”
Above is the Boston Matrix. It shows the cash cows as the regular Starbucks line of Coffee’s,
Latte’s and Frappacinos found at nearly every location. These are stable products that account
for the bulk of sales. A potential star is the International locations, which hold less financial risk
and open doors for innovation and stability. Question marks are the recently added VIA instant
coffee to be expanding to grocery stores and convenient stores. Current products like this such
as the dog, pre-bottle frappacinos account for a tiny fraction of sales. Another question mark
is the oft forgotten sub-brand Seattle’s Best. The company will be revamping this brand and it’s
future is unknown.
Internal Factor Analysis Summary (IFAS)
S1- Brand Identity
S6- Store Ambiance
S1- the company consistently
Maintains its brand, even without heavy
S2- They search for quality beans
S3- They offer drink variety and