Starbucks Case Study
Conner A
Intro to Business
3/26/2013
Case Study
Consumer Behavior in the Coffee Industry
Did you know one franchise alone dominated an entire payment-processing market in just one year? You might have heard of this giant company by the name Starbucks. Howard Schultz, CEO of Starbucks, had a significant role in the company’s growth. Starbucks has steadily dominated the coffee market and has even extended to being a 3rd home for many of its consumers.
Based in Seattle, Starbucks had significant competition when it opened its first store in the Pike Place market in Seattle, yet still managed to become superior. Starbucks used new advertising tactics and presented a unique experience for its customers, all of which was a game changer in the business world.
Starbucks was created when three friends opened a small store to sell coffee beans and roast in 1971[1]. Jerry Baldwin, Gordon Bowler and Zev Siegl opened their store in the heart of the unique open air market in downtown Seattle. Located just off the harbor, Pike place market was the optimal location and attracted many residents and tourists. After ten years of incredible growth, Jerry Baldwin hired Howard Schultz as head of management.
When Schultz first started, he slowly learned the coffee industry and helped made subtle but significant changes. For example, Schultz noticed that “first-time customers sometimes felt uneasy in the stores”[2] so he developed “customer-friendly sales skills and produced brochures that made it easy for customers to learn about fine coffees”2 Schultz had the vision of making Starbucks a coffee lounge versus a bar after being inspired by eastern traditions. Even though he did not agree with the new direction, Baldwin allowed Schultz to open one espresso bar and in 2 years, Schultz was able to buy out Baldwin and equity owners with the help of investors in 19921.
Intro to Business
3/26/2013
Case Study
Consumer Behavior in the Coffee Industry
Did you know one franchise alone dominated an entire payment-processing market in just one year? You might have heard of this giant company by the name Starbucks. Howard Schultz, CEO of Starbucks, had a significant role in the company’s growth. Starbucks has steadily dominated the coffee market and has even extended to being a 3rd home for many of its consumers.
Based in Seattle, Starbucks had significant competition when it opened its first store in the Pike Place market in Seattle, yet still managed to become superior. Starbucks used new advertising tactics and presented a unique experience for its customers, all of which was a game changer in the business world.
Starbucks was created when three friends opened a small store to sell coffee beans and roast in 1971[1]. Jerry Baldwin, Gordon Bowler and Zev Siegl opened their store in the heart of the unique open air market in downtown Seattle. Located just off the harbor, Pike place market was the optimal location and attracted many residents and tourists. After ten years of incredible growth, Jerry Baldwin hired Howard Schultz as head of management.
When Schultz first started, he slowly learned the coffee industry and helped made subtle but significant changes. For example, Schultz noticed that “first-time customers sometimes felt uneasy in the stores”[2] so he developed “customer-friendly sales skills and produced brochures that made it easy for customers to learn about fine coffees”2 Schultz had the vision of making Starbucks a coffee lounge versus a bar after being inspired by eastern traditions. Even though he did not agree with the new direction, Baldwin allowed Schultz to open one espresso bar and in 2 years, Schultz was able to buy out Baldwin and equity owners with the help of investors in 19921.
Cited: I. Schiff, Lewis. "Starbucks CEO Howard Schultz Coming to NYC." Inc.com. INC, 18 Mar. 2011. Web. 25 Mar. 2013. II. "Starbucks Corporation History." History of Starbucks Corporation – FundingUniverse. Funding Universe, n.d. Web. 25 Mar. 2013. III. McGraw Hill. "Starbucks Corporation." Starbucks Case Study. MHHE.com, n.d. Web. 25 Mar. 2013. ----------------------- [1] Funding Universe, Starbucks Corporate History [2] McGraw Hill, Starbucks Case Study, Starbucks Corporate History [3] McGraw Hill, Starbucks Case Study, Starbucks Corporate History [4] Funding Universe, Starbucks Corporation History