"I envisioned a coffee house would be the third place that people spend their time between home and work". This is a long-term vision that Howard Schultz, founder and chairman of Starbucks was eager to achieve when he started the business early in 1980s. Now his idea has been built into a big success as a global coffee company and coffeehouse chain brand. Founded in 1971 in Seattle as a local coffee bean roaster and retailer, Starbucks has been growing rapidly as one of the dominant specialty-coffee brand in the world. By 2002 Starbucks is serving 20 million unique customers (targeting affluent, well-educated, white color patrons between ages of 25~44) in about 5,900 stores around the world, with 212% of increase in store growth than 1998. During last decade, the sales have been steadily growing more than 5% without spending almost nothing on advertising, and its market share (i.e. in the specialty coffee markets, Exhibit 6) has been expanding, from 29.92% in 2000 to 42% in 2002 in the midst of increasing competition with a variety of small scale coffee house chains and thousands of independent coffee shops.
Company milestones
1971 Starbucks opens first store in Seattle’s Pike Place Market
1982 Howard Schultz joins Starbucks as director of retail operations and marketing
1983 Howard travels to Italy, where He sees the potential to develop a coffeehouse.
1987 Howard acquires Starbucks assets. Total stores*: 17
1988 Offers full health benefits to eligible full‐ and part‐time employees. Total stores*: 34
1990 Starbucks expands headquarters in Seattle. Total stores*: 84
1992 Completes initial public offering (IPO), with common stock being traded on the NASDAQ
1996 Opens stores in: Japan (first store outside of North America) Total stores: 1,015
1998 Extends the Starbucks brand into grocery channels across the U.S. Total stores*: 1,886
2000 Howard Schultz transitions to chairman and chief global strategist. Total stores*: 3,501
2002 Establishes Starbucks Coffee Trading Company (SCTC) in Lausanne, Switzerland. Opens stores in: Germany, Greece, Indonesia, Mexico, Oman, Puerto Rico and Spain Total stores*: 5,886 Starbucks’ brand strategy is well captured by its motto, 'live coffee', which means ‘experience' through consuming a cup of coffee and this strategy includes three core components; high quality coffee, upscale yet inviting atmosphere, and customer intimacy. Especially, Customer satisfaction is valued as the most important factor. Starbucks has been taking a strong pride in maintaining high customer satisfaction. In an effort to provide the best customer service, it has focused on training partners(employees) to well connect with customers and tracking customer service performances including service, cleanliness, product quality, and speed of service, using metrics called ‘customer snapshot’, a periodical test on services by anonymous shoppers. During 2002, as the ‘customer snapshot ’scores has increased across all stores, the company came to have a belief that they are doing well customer service. However,