STARBUCKS CASE ANALYSIS QUESTIONS
Please answer all the following questions as they relate to the case. Please utilize as much outside resources as you deem necessary to reinforce your answers—especially the last question. Remember that this case is over 10 years old and Starbucks has changed since then.
1. In the early 1980’s, how did Howard Schultz view the possibilities for the fledgling specialty coffee market? What were the most important factors in shaping his perspective and its success?
2. By 1987, Schultz bought Starbucks from its original founders. It has grown from six stores to over 3300 locations. What were the critical drivers of Starbucks success?
3. Why did Schultz think he successfully import the Italian coffee bar
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Most households had some form of knowledge of the origin of the coffee in their local store. Some had never tasted an espresso based beverage, or owned a coffee grinder. This of concept of specialty coffees was new. It is based on buyers who cared about quality coffee, and how it was served .Things began to change when a growing number of Coffee aficionados opened their own roasters to sell fresh, full bodied Arabica beans in scattered locations around the country. On the demand and supply side, the fledgling specialty coffee market expanded rapidly in the early 1980’s, rising from $45 million in annual revenues to more than $750 million. Despite the rapid growth however, specialty coffee remained a very small segment, accounting for less than a tenth of the total industry sales in the early 1980’s. The larger know coffee businesses; Proctor & Gamble, Nestle and General foods; known as “The Big Three” still controlled 60% of the roasted coffee sales. All these factors captured the attention of Howard Schultz, whose interest was based on a hunch that the young, fragmented specialty coffee sector held tremendous opportunities, especially on the demand side.
What has been the success of this since the beginning? Innovation, persistence and quality have been a constant value at Starbucks. Schultz introduced the place-like-home between the home and the office, where people would gather around quality coffees and teas. Research and development efforts were conducted