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Starbucks Coffee Company is North America's leading roaster and retailer of specialty coffees. Headquartered in Seattle, WA, Starbucks has 931 retails stores and 75 major airport locations. The Company's objective is to establish Starbucks as the most recognized and respected brand of coffee in the world. To achieve this goal, the Company will continue to rapidly expand its retail operations, grow its mail order and specialty sales operations, and selectively pursue other opportunities to leverage and grow the Starbucks brand through the introduction of new products and the development of new distribution channels. Employees are one of the most important resources to Starbucks. If the company is to prosper, the employees must be treated well.
All employees are eligible for Starbucks' health care and benefits package, as well as a starting wage above the minimum. Starbucks's trong commitment to the environment is guided by an environment committee. The Company endeavors to offer an environmentally safe product, as it believes that the welfare of people, plant and product are linked. Starbucks prides itself on being a "good citizen" locally and in the various coffee producing countries. They make significant contributions to local charities that focus on children, the environment, the homeless, and AIDS research / support . Financially, Starbucks has had solid earnings and returns.
While still in the fast-growth stage, the Company has managed to continue healthy operations while generating enough public funds to finance store expansion. The company is expanding its empire overseas. Japan was Starbucks' first expansion outside of North America. Starbucks also plans to open coffee bars in Singapore.
Although Starbucks expects same-store sales, which showed 20 % increases in the past five years, to fall, overseas expansion and joint ventures promise to be major growth areas for Starbucks. Despite this potential problem, Starbucks remains excited about future growth and continues to be hopeful about the future. STARBUCKS COFFEE COMPANY Starbucks and its subsidiaries ("Starbucks" or the "Company") include Starbucks Corporation and its wholly owned subsidiaries: The Coffee Connection, Inc. ("The Coffee Connection"), Starbucks New Venture Company ("Starbucks New Venture"), Starbucks Coffee International, Inc. ("SBI"), and Starbucks Holding Company. In 1994, Starbucks acquired all of the capital stock of The Coffee Connection, a roaster / retailer of specialty coffee. Starbucks New Venture was created in fiscal 1994 to develop ready-to-drink coffee-based beverages in partnership with the Pepsi-Cola Company.
In October 1995, SBI was created to pursue development of Starbucks stores outside of North America, and Starbucks Holding Company was created to enter into a joint venture with Dreyer's Grand Ice Cream, Inc. to develop and distribute Starbucks premium coffee ice creams. Howard Schultz, 42, is the founder of the Company and has been chairman of the board and chief executive officer since its inception in 1987. The Company began with eleven Seattle stores and fewer than one hundred employees. It has since exploded to a half billion dollar company serving three million cups of coffee per week in one thousand stores throughout the country.
Schultz believes his company will succeed well into the twenty-first century. He states, "One of the things that you can't measure on a balance sheet or on a financial statement is the soul of Starbucks. " Mr. Schultz got his start with Starbucks Coffee & Tea, which doled out popular free samples of coffee brewed and sold at a shop in Seattle's Pikes Place Market. Starbucks was founded in 1971 by three academics who had become enamored of the Berkeley, California food scene. The teachers moved into Seattle and opened a shop named Starbucks after Captain Starbuck, the coffee-loving first mate in Moby Dick.
They picked a two-tailed siren for the logo, a creature of strength and power, common in medieval adventure tales. The Starbucks' pioneers were enthusiastic but not very focused. Mr. Schultz more than made up for that lack of focus when he joined in 1982.
In August 1987, Mr. Schultz and his investors bought the whole of Starbucks for $ 4 million. His marketing strategy was that customers "must recognize you do stand for something. What Starbucks was going to stand for was a good cup of fresh coffee... over and over... " The operation lost money for three straight years. Starbucks Coffee Company is North America's leading roaster and retailer of specialty coffees.
Headquartered in Seattle, WA, Starbucks has 931 retail stores and 75 major airport locations. Store locations include at least 17 states; the District of Columbia; British Columbia, Canada; and Japan. They operate a national direct mail business and serve fine restaurants, Nordstroms, Barnes & Noble bookstores, ITT Sheraton Hotels, Delta Shuttle, and Horizon Airlines. The Company holds approximately 39 federal trademark registrations in the United States.
They have approximately 44 additional applications pending in the U. S. The Company currently owns one patent in the U. S.
for its coffee on tap system and has several patent applications pending. As of October 1, 1995, Starbucks employed approximately 11, 500 individuals. None of the employees are unionized. Starbucks has never experienced a strike or work stoppage, and the Company believes that its relations with its employees are excellent. Starbucks prides itself on being a "good citizen" locally and in the various coffee producing countries. They make significant contributions to local charities that focus on children, the environment, the homeless, and AIDS research / support .
Starbucks is committed to selling only the finest whole bean coffees and coffee beverages. The Company purchases and roasts high-quality whole bean coffees and sells them, along with a variety of coffee beverages, pastries, confections, and coffee related accessories and equipment, primarily through its Company operated stores and licensed airport stores. To ensure compliance with its rigorous standards, Starbucks is vertically integrated, controlling its coffee sourcing, roasting, and distribution through its retail stores. In addition to its retail operations, the Company sells primarily whole bean coffees through a specialty sales group and a national mail order operation. The Company purchases green coffee beans for its more than 50 blends and varieties from coffee growing regions throughout the world and custom roasts them to its precise standards. The Company's objective is to establish Starbucks as the most recognized and respected brand of coffee in the world.
Net Sales for fiscal year 1996 have rocketed to $ 696 million. This marks the ninth consecutive year that Starbucks revenue has increased by 50 percent or greater. Starbucks Coffee stock is publicly traded on the NASDAQ (Symbol: SBUX). Starbucks business is subject to seasonal fluctuations. A significant portion of the Company's net sales and profits are made during the Christmas holiday season. Starbucks retail stores have consistently over the last 3 fiscal years accounted for approximately 87 % of net sales.
The Company's specialty sales and mail order operations account for the remainder of net sales. Starbucks has grown rapidly from 17 stores at the end of fiscal 1987 to 1006 stores at October 1, 1996. Starbucks retail expansion strategy is to increase its market share in existing markets and to open stores in new markets where it believes it can become the leading specialty coffee retailer. In addition to its 1, 006 retail locations, Starbucks has a national direct response business and a specialty sales group, which serves fine dining, food services, travel and hotel accounts. MISSION STATEMENT: 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. Recognize that profitability is essential to our future success.
PRODUCT DISTRIBUTION: RETAIL STORES: The Company's retail objective is to become the leading retailer and brand of coffee in each of its target markets by selling the finest quality coffees and related products, and by providing a superior level of customer service, thereby building a high degree of customer loyalty. In addition to coffee beans and beverages, the Company's stores offer a selection of coffee-making equipment, accessories, pastries, and confections. Their goal in each store is to offer superior service to their customers while educating them about coffee quality. There is an information section in each store that provides customers a good resource for becoming more knowledgeable about the world of coffee. Starbucks publishes a monthly newsletter, Coffee Matters, and carries a wide selection of brochures on the subject. Each store offers packaged goods, fresh-baked pastries and specialty merchandise from grinders to coffee makers.
Stores open at year end (52 weeks) 1996 1995 1994 1993 1992 1991 Company operated stores: North American 929 627 399 260 162 114 Outside North America 2 -- -- -- -- -- Licensed airport stores 75 49 26 12 3 2 TOTAL STORES 1006 676 425 272 165 116 Starbucks stores are typically clustered in high-traffic, high-visibility locations in each market. Stores vary in size, with an average of approximately 1, 500 square feet. All Starbucks stores are located in leased premises. Because the Company has the ability to vary the size of its stores, Starbucks stores are located in a variety of settings, including office buildings, downtown and suburban retail centers, and kiosks located generally in building lobbies, airport terminals, and supermarket foyers.
While the Company selectively locates stores in suburban malls, its focus is on stores that are convenient for pedestrian street traffic. As part of its expansion strategy of clustering stores in existing markets, Starbucks has experienced a certain amount of cannibalization of existing stores by new stores as the store concentration has increased, but management believes such cannibalization has been justified by the incremental sales and return on new store investment. The Company anticipates that this cannibalization, as well as increased competition and other factors may continue to put downward pressure on its comparable stores sales growth in future periods. The Company combines its merchandising strategy with its marketing programs to create and reinforce a distinctive brand image for its coffees. The Company's merchandising strategy is reflected in its product mix, product pricing, and sales and educational materials. The product mix in each store varies and depends on the size of the store and its location.
Larger stores carry a revolving selection that can include any of the Company's more than 50 varieties of whole bean coffees and a range of coffee related products, including exclusive, high-quality coffee-making equipment as well as accessories bearing various Company trademarks, such as coffee mugs, coffee grinders, storage containers, coffee filters, and finely packaged gourmet food products. The smaller stores and kiosks usually sell a full line of coffee beverages, a limited selection of whole bean coffees and a few hardware items, mostly logo mugs and small equipment items. Starbucks prices its coffees competitively with the prevailing high-end coffee prices, reflecting the high-quality of the Company's coffees and its high level of customer service. Prices vary by market, including Canada, but as expressed in U. S. dollars, coffee beverage prices range from $ 0. 80 for regular brew to $ 3. 65 for the most expensive espresso beverages.
Whole bean coffee prices range from $ 7. 95 to $ 17. 95 per pound. The Company goal is to open 2000 stores by the year 2000. Management goals of future fiscal year openings have consistently been exceeded. Starbucks anticipated opening 275 stores in fiscal year 1996. During the 52 weeks ending September 29, 1996, the Company opened 307 stores (including four replacement stores), and licensees opened 26 stores, bringing the total number of company-owned and licensed stores opened in North America to 333. Looking forward to fiscal 1997, there are plans to open at least 325 new company-owned and licensed stores and to enter at least three major new markets in North America.
If fiscal 1996 is indicative of future success, then their hopes will lead to fruition. Starbucks averaged opening one store every 26. 5 hours. SPECIALTY SALES: Specialty Sales include distribution to restaurants, wholesale warehouses, multi-unit retailers, hotels, and airlines. Starbucks is committed to expanding its specialty sales operations.
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Research essay sample on Complete Analysis Of The Starbucks Coffee Company
