Starbucks

EXECUTIVE SUMMARY

Can Starbucks grow to a 23 billion dollar corporation, yet maintain its entrepreneurial character? The answer is yes, and I will explain by taking a brief look at the history of Starbucks - how it started as a small local coffee house and grew into the largest business in the industry. I will delve into Starbucks' current mission statement, "To be the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow and our commitment to a role of environmental leadership in all facets of our business." I will discuss the goals and objectives of shareholders and how the coffee farmers are stakeholders in Starbucks through comprehensive programs that assist farmers in qualifying for preferred-supplier status by offering training in agricultural techniques, technical support and access to affordable credit through partnerships with organizations such as the Calvert Foundation.

Although Starbucks has seen their market share slip they can still obtain their goals by doing the following:

1. Streamline their product line and get back to their bread and butter Ð'- quality coffee with premium service.

2. Continue to promote their green initiatives. These have struck a chord with their constituency and have proven to be smart initiatives with tangible results.

3. Seek international growth in lesser tapped out markets. Their plan to expand in China and South America can work as long as they maintain a cultural awareness to the markets in which they are expanding.

4. Continue to cultivate profitable relationships with their coffee farmers. Their vision in this regard is spot on.

Starbuck's Mission vs. Strategy

The purpose of this paper is to discuss Starbucks' mission and how well it is aligned with their strategy. Specifically, can Starbucks grow to a 23 billion dollar corporation, yet maintain its entrepreneurial character? To answer this question, I will first give a brief background on the history of Starbucks. Second, I will examine Starbucks' current mission statement and outline their goals and objectives. Then, I will analyze the main stakeholders and how the company mission meets their goals. Finally, I will discuss how Starbucks can refocus its strategies to meet their mission, vision, and objectives.

Starbucks: A Look Back

Starbucks first opened its doors in Seattle in 1971. The original owners, Baldwin, Siegel, and Bowker shared a love of fine coffees and exotic teas. The inspiration for the Starbucks enterprise was a Dutch immigrant, Alfred Peet, who had begun importing fine arabica coffees into the United States during the 1950s. Peet viewed coffee as a fine winemaker views grapes, appraising it in terms of country of origin, estates, and harvests. Peet had opened a small store, Peet's Coffee and Tea, in Berkeley, California, in 1966 and had cultivated a loyal clientele. Peet's store specialized in importing fine coffees and teas, dark-roasting its own beans the European way to bring out their full flavor, and teaching customers how to grind the beans and make freshly brewed coffee at home. Baldwin, Siegel, and Bowker were well acquainted with Peet's expertise, having visited his store on numerous occasions and spent many hours listening to Peet expound on quality coffees and the importance of proper bean-roasting techniques. All three were devoted fans of Peet and his dark-roasted coffees, going so far as to order their personal coffee supplies by mail from Peet's (Thompson & Strickland, 1999).

The original owners were passionate about dark-roasted coffee beans that were fresh-roasted. Starbucks was strongly committed in educating their customers to appreciate the qualities of fine coffees, rather than just bowing to mass-market appeal. The company depended mainly on word-of-mouth to get more people into its stores, and then relied on the caliber of its product to give patrons a sense of discovery and excitement (Thompson & Strickland, 1999). Starbucks believed in building their customer loyalty cup by cup.

In 1981, Howard Schultz, a New York businessman intrigued by the coffee store's philosophy and passion for coffee, approached the original owners for equity stake with the successful small business. He was hired as the head of marketing and oversaw the retail stores. However, Schultz was at odds with the owners and believed in expanding the business across the States and Canada. After attending a convention in Milan, Schultz came to the realization that Starbucks was missing the boat and needed to expand its business by serving fresh-brewed coffee, espresso, and cappuccino in its stores in addition to selling beans and coffee equipment (Thompson & Strickland, 1999). Upon his return to the States, Schultz at odds with the original owners, gathered financial backing and opened Il Giornale, a coffee bar modeled after what he had experienced in Milan. In 1987, Schultz bought out the original Starbucks, name, logo and all and the Starbucks that we know today came into existence.

Starbucks' Mission, Goals, and Objectives

Currently, Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world, with more than 9,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business (Business Wire, 2005). The mission statement, according to their website is twofold:

1. Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.

The following six guiding principles will help us measure the appropriateness of our decisions:

Provide a great work environment and treat each other with respect and dignity.

Embrace diversity as an essential component in the way we do business.

Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

Develop enthusiastically satisfied customers all of the time.

Contribute positively to our communities and our environment.