Starbucks Video Case
Starbucks Video Case
1. Describe the coffee industry prior to the creation of Starbucks. How did Starbucks change the product and create the specialty coffee sector?
Starbucks opened its first store in 1971 and prior to that the coffee industry was different. Before Starbucks there were virtually no independent coffee shops. While coffee was cheap at around 50 cents a cup the quality was also cheap. Coffee was canned, tasted terrible and there was no such thing as gourmet coffee. However Starbucks completely changed the image of coffee and through its success is why a cup of coffee went from 50 cents to over $4. Starbucks did this by creating the specialty coffee sector. Specialty coffees are distinctive because of their full cup taste with little to no defects and unique flavor. Starbucks used coffee beans with the best flavor that are produced in special microclimates such as Columbia. By using higher quality coffee beans with much better taste Starbucks not only changed the product itself but also created the specialty coffee sector.
2. What did Howard Schultz discover in Milan that changed Starbucks forever? How did the owners of Starbucks react to Howard’s idea to change Starbucks?
In 1983 Starbucks sent Howard Shultz to Milan for a housewares show, however during the visit he experienced something that heavily intrigued him. During the visit Shultz experienced the Italian coffee bar culture with light food and coffee to go and the Italian ritual of drinking coffee and socializing fascinated Shultz. Shultz discovered that there were 200,000 coffee bars in Italy with around 1,500 in Milan alone. Shultz saw this as an opportunity, to bring his new knowledge back home to the American culture. Coffee bars are the mainstay of every Italian neighborhood”, Shultz said, “That’s what I want to bring back to Seattle”. When Shultz returned from Milan he pitched the coffee bar idea to Starbucks partners and their initial response was a definite no. They did
1. Describe the coffee industry prior to the creation of Starbucks. How did Starbucks change the product and create the specialty coffee sector?
Starbucks opened its first store in 1971 and prior to that the coffee industry was different. Before Starbucks there were virtually no independent coffee shops. While coffee was cheap at around 50 cents a cup the quality was also cheap. Coffee was canned, tasted terrible and there was no such thing as gourmet coffee. However Starbucks completely changed the image of coffee and through its success is why a cup of coffee went from 50 cents to over $4. Starbucks did this by creating the specialty coffee sector. Specialty coffees are distinctive because of their full cup taste with little to no defects and unique flavor. Starbucks used coffee beans with the best flavor that are produced in special microclimates such as Columbia. By using higher quality coffee beans with much better taste Starbucks not only changed the product itself but also created the specialty coffee sector.
2. What did Howard Schultz discover in Milan that changed Starbucks forever? How did the owners of Starbucks react to Howard’s idea to change Starbucks?
In 1983 Starbucks sent Howard Shultz to Milan for a housewares show, however during the visit he experienced something that heavily intrigued him. During the visit Shultz experienced the Italian coffee bar culture with light food and coffee to go and the Italian ritual of drinking coffee and socializing fascinated Shultz. Shultz discovered that there were 200,000 coffee bars in Italy with around 1,500 in Milan alone. Shultz saw this as an opportunity, to bring his new knowledge back home to the American culture. Coffee bars are the mainstay of every Italian neighborhood”, Shultz said, “That’s what I want to bring back to Seattle”. When Shultz returned from Milan he pitched the coffee bar idea to Starbucks partners and their initial response was a definite no. They did