Starbucks Corp Essay

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Lan Duong

Mary McGuire, BUS 305

Jan 25, 2013

Starbucks coffee has become a household name with shops on almost every street corner as well as in local grocery stores, malls, movie theaters and hotels.

According to Hoovers, the history of Starbucks started in 1971, when the company was founded by three coffee lovers: Gordeon Bowker, Jerry Baldwin, and Ziv Siegl. By 1982 there were 5 retail stores in Seattle selling coffees to local restaurants with Howard Schulz in charge of sales and marketing. After a trip to Italy, Schultz saw the popularity of coffee bars and left Starbucks to open his own coffee bar name “Il Giornale” serving Starbucks coffee. After acquiring Starbucks for $4 million in 1987, Schulz changed his company’s name to Starbucks Corporation. From 1996 – 2001, Starbucks went global, opening more than 1,100 shops all over the world in Europe, Asia, and South America. Three years later, in 2004, Starbucks teamed with Hewlett Packard and Deutsche Telekom’s Tmobile to offer WIFI to 1,200 locations in the US, London, and Berlin (Chein, 2013). As of Sept 2012, there are 7,857 company-operated stores and 5,046 license stores in Americas ("Starbucks corporation 10-k," 2012).

One of Starbucks strategy for success is by offering a variety of products to their customers such as: 1) beverages, 2) food, 3) packaged coffee, and 4) coffee-making equipment and other merchandise. According to Starbucks’ 2012 10-K report, their beverages make up 75% of the company revenue, which includes regular and decaffeinated coffee, Italian-style espresso, cold blended/iced shaken refreshment, Tazo teas, juices and bottled water. Second in line is food; which consists of hot breakfast sandwiches, pastries, salads, and cold sandwiches, which contributes 19% of the revenue. In 2011 &2012, Starbucks expanded their beverage and food selections by acquiring Evolution Fresh, Bay Bread, and Teavana Holdings. The remaining two products total 6% of revenue which are packaged and single serve coffee-making equipment ("Starbucks corporation 10-k," 2012). Recently, Starbucks introduced the Verismo, a single-cup coffee espresso brewer, which was a success, selling more than 150,000 (Lisa Baertlein, 2013).

Yahoo’s Finance reports Starbucks 2012 net income of 1.38 billion, which is small compare to their direct competitors:
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