Not so long ago, if you wanted a cup of coffee, you would either have to make your own at home, grab it at a local restaurant, or at the closest convenience store. Now, there is the option to go to specialty coffee shops where not only regular coffee is served, but just about every kind of espresso, Frappuccino, or mocha that you may have a craving. Starbucks Corporation is one of those coffee houses. Even though their drinks are costly, they have had a huge success partly due to motivation of the owner, a large expansion program, the ability to advance with technology and innovation, and the quick informing of and strict adherence policy to their business and supplier code of ethics.
Starbucks Corporation first started in 1971 as a single store in Seattle’s Pike Place Market. In 1987, Howard Schultz purchased Starbucks and made it what it is today, with 18,000 stores in 16 countries. Not only do they sell over 30 different coffees, they sell sweets, tea, premade drinks, cups, brewers, and ice cream. They employ around 140,000 partners, and they serve five million customers per week. Starbucks competitors are fast food restaurants such as McDonalds and Dunkin Donuts and specialty coffee businesses such as Green Mountain Coffee.
In 1995 Starbucks created Starbucks Coffee International, planning their international expansion. A year later, in 1996, Starbucks opened their first international coffee house in Tokyo. Now, they operate in 59 countries such as Russia, China, and Germany. In 2011, Starbucks changed their regional structure to a three region- structure. The China and Asia Pacific structure handles all stores in Asia and China, the Americas structure handles all stores in the United States, Canada, Mexico and Latin America, and the EMEA structure handles stores in Europe, U.K., the Middle East, Russia and Africa. Each structure has its own president that works both with the partners and with the Global Consumer Products and Foodservice Team.
One of the things that contributes to Starbuck’s success is their technology. Starbucks has completely jumped on board with the increasing use of smart phones and tablets. Starbucks has created a Starbucks Digital Network that, in an interview with Forbes, Adam Brotman, Starbuck’s Chief Digital Officer, stated “serves up fresh, localized and valuable content from the biggest names in news and entertainment to customers who access our free Wi-Fi in Starbucks stores.” (Kanani, 2012, para. 10)They also have created a phone application to where you can see their menu of items that Starbucks sells, not only in the cafes but also in grocery stores. From there you can order your drink at your designated café, and pay for it either with your credit card or your gift card. This application also allows you to load a rewards card, check your reward balance, and receive promotional offers. Starbucks uses social media as well, getting promotions and news out through sites like Facebook and Twitter. They use two touch screen registers in each store to assist customers quicker, coffee machines that quickly brew coffee which is made fresh every 30 minute, the most up to date espresso and Frappuccino machines that make the drinks at exactly the designated temperature, and partners that are extensively trained how to quickly and correctly mix each drink.
While Starbucks has some delicious drink and snack options, there are competitors that have more of a variety of food with a few drink options at a cheaper price. Because of this, Starbucks has focused their innovation towards making their cafes the place that people want to go to meet or relax. Former CEO Orin Smith stated that “Harold’s vision was to create a third place- a place between work and home, where people would meet over coffee and create community.” (“At Starbucks, the key innovation was its company culture,” 2013) Starbuck’s cafes have popular music,