Case Study: Starbucks Corporation


Wake up and smell the coffee – Starbucks is everywhere.

The U.S.’s no. 1 specialty coffee retailer, Starbucks operates nearly 4,000 coffee shops in a variety of locations (office buildings, shopping centers, airport terminals, supermarkets) in some 20 countries worldwide. Starbucks sells coffee drinks and beans, pastries, and other food items and beverages, as well as mugs, coffeemakers, coffee grinders, and storage containers. The company also sells its beans to restaurants, businesses, airlines, and hotels, and it offers mail-order and online catalogs. Global Consumer Products (CPG) operations sell a selection of whole bean and ground coffees as well as a selection of premium Tazo teas through licensing arrangements in U.S. and international markets. CPG operations also produce and sell ready-to-drink beverages that include, among others, bottled Frappuccino beverages, Starbucks’ DoubleShot espresso drinks, and Discoveries chilled cup coffee, as well as Starbucks’ super-premium ice creams and Starbucks’ Coffee and Cream Liqueurs, through its joint ventures and marketing and distribution agreements.

Company History

Three Seattle entrepreneurs; Gordon Bowker, Jerry Baldwin, and Zev Siegl, started the Starbucks Corporation in 1971. Their prime product was the selling of whole bean coffee in one Seattle store. By 1982, this business had grown tremendously into five stores selling the coffee beans, a roasting facility, and a wholesale business for local restaurants. Howard Schultz, a marketer, was recruited to be the manager of retail and marketing. He brought new ideas to the owners, but was turned down. Schultz in turn opened his own coffee bar in 1986 based on Italian coffee cafes, selling brewed Starbucks coffee. By 1987, Schultz had expanded to three coffee bars and bought Starbucks from the original owners for $4 million. He changed the name of his coffee bars from Il Giornale to Starbucks. His intention for the company was to grow...