There is no refuting the impact this company has made on the coffee culture in the United States and also around the world. Today, Starbucks is the largest coffee house chain in the world. As of March 2007, the chain includes 8500 company owned stores and 6500 licensed stores in 42 countries, for a total of over 15,000 stores globally. The fashionable retailer has clearly transformed the consumer preferences and coffee drinking habits of an entire market over the last thirty years.
Two
teachers Jerry Baldwin and Zev Siegel, and writer Gordon Bowker were
the inventive founders and opened the first Starbucks store in
Seattle, Washington in 1971. The three collected $8000 in cash and
loans as start-up capital.
The
original concept, inspired by their friend Alfred Peet (Peet's Coffee
and Tea) is also the place where Zev Siegel worked for a summer to
learn the trade. Alfred Peet propose to the three to open a store in
Seattle's Pike Place Market to sell premium coffee beans and
specialty coffee equipment.
The
founders of Starbucks, with the permission of Alfred Peet, fashioned
their first store after Peet's popular Berkeley coffee house. Peet
supplied the green coffee beans for roasting in their new store. Very
likely, Starbucks wouldn't be where they are today without the early
influence of Alfred Peet. By 1980, only nine years after the first
store opened, Starbucks was the largest coffee roaster in Washington
with six retail outlets.(Marie Bussing-Burks, 2009)
In 1981, Howard Schultz, a sales representative for Hammerplast, a Swedish company supplying Starbucks, couldn't help notice how many plastic brewing thermoses Starbucks was buying. Schultz became very captivated with the Starbucks operation and in 1982, Baldwin hired Schultz as the head of marketing.
Soon
after coming on board, Howard Schultz attended an international
housewares show in Milan, Italy. He was fascinated with the
passionate coffee culture he found in Italy, and as the story goes,
he sampled his first cafe latte in Verona, Italy. Apparently, he was
even more impressed with the cafe culture he encountered with
customers sipping espresso for hours in fashionable coffee house
surroundings. The epiphany for Howard Schultz, and in retrospect, an
absolutely brilliant marketing idea, was to model a retail cafe
business in the fashion and style of the great "old world"
coffee houses of Italy, and bring the same community and coffee
culture to the American market.
Schultz
brought the idea to Baldwin. Baldwin wasn't particularly interested
in selling espresso by the cup and rejected a business shift that
would distract Starbucks from their original focus of selling whole
coffee beans. Nonetheless, Baldwin did let Schultz test a modest
espresso bar in a corner of one of the stores.
Howard
Schultz, convinced that his idea was a big winner, eventually left
Starbucks in 1985 to start his own business. He called his new
venture Il Giornale, named after the largest daily newspaper in
Italy. Il Giornale enjoyed immediate success selling espresso drinks.
In
1987, Schultz raised enough capital with local investors and
purchased Starbucks from Jerry Baldwin and Gordon Bowker for 3.7
million. Schultz combined the Starbucks and Il Giornale operations
and re-branded everything back to Starbucks with a goal to open up
125 more stores over the next five years.
Expansion
continued for the successful coffee retailer and the company went
public in 1992. In only five short years in 1997, Starbucks had grown
tenfold. Today, Starbucks is a household brand name in over 40
countries around the world. Even though pundits continue to predict
the demise of Starbucks as they relentlessly push the commercial
envelope to keep up with shareholder expectations, let's be willing
to acknowledge the fact that Starbucks raised the bar and transformed
the coffee industry.
Referred to economictimes.indiatimes.com
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