Starbucks is currently one of the world’s largest coffee shop chains. It has around 7087 company-operated stores around 4081 licensed stores of which are in the United States alone (Starbucks Coffee Company Fact Sheet, 2008, p.1). It also operates in 43 countries outside of the United States. Starbucks has become a great success because it does not just sell coffee. It sells great cup of coffee every time. When people visit a Starbucks coffee shop they could only talk about the Starbucks experience. It is a great place to study, meet with friends, hang out and enjoy great service from Starbucks baristas. Indeed, Starbucks has been providing its customers that distinct service that cannot be found in any other coffee shop (J. Rae, 2006, p.1).

Its vision as stated in its website is to become the most recognized and respected brand in the world. It seeks to accomplish this vision by continuing with its rapid expansion of its retail operations, growing its specialty sales and other operations and introducing new products and developing new distribution channels. Its aggressive market penetration and expansion strategies, however, often creates managerial and financial problems for the company. Also, its aggressive marketing strategy has affected the “Starbucks experience” leading to a commoditization of the Starbucks brand (BusinessWeek, 2007, p.1).

The aim of this business report is to make an objective assessment of the present strategies of Starbucks and analyze whether the same is still aligned with its Mission Statement.

Starbucks Mission Statement

Starbucks seeks to establish itself as the premier purveyor of the finest coffee in the world without sacrificing its principles as it grows. It also seeks to provide a great work environment and treat each employee with respect and dignity, embrace diversity as an essential component in the way it does business, apply the highest standards of excellence to the purchasing, roasting and fresh delivery of its coffee, develop enthusiastically satisfied customers all of the time, contribute positively to the communities and the environment, and recognize that profitability is essential to our future success.

Introduction

No coffee company in the world is as big as Starbucks. It seeks to continue with its aggressive growth and expansion programs as well as rapid marketing new products and new clientele. It is also continuously seeking to improve speed of service and efficiency in all its Starbucks stores worldwide. In 2007, according to International Herald Tribune, Starbucks chairman Howard Schultz announced that it will continue with the growth plans of the company (International Herald Tribune, 2007, p.1). Its goal is to be able to open at least 1,000 new stores over the next four (4) years and double its size within five (5) years (International Herald Tribune, 2007, p.1).

In July 2008, however, Starbucks made an announcement that it plans to close 600 of its stores in theUS(John Quelch, 2008, p.1). The primary reason for the closing is that its grand growth strategy backfired against the company. According to Schultz, “one of the results has been stores that no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee.” (Starbucksgossip, p.1)

Several reasons for the commoditization of the Starbucks brand have been identified. The first reason is it lost its appeal to its customers (Quelch, p.1). Starbucks coffee initially appealed to clients who are attracted to its club-like atmosphere of relaxation. Inside the Starbucks coffee shop, the customers can relax and enjoy their cup of coffee, read a book and meet with friends or simply to hangout and enjoy the fresh aroma of coffee being served by the baristas. The necessity for the company’s growth meant that it