Capstone – #5

Have you ever wondered why Starbucks is so successful? This is something that we might not really think about, but the long lines, multiple stores and the amount of drinks they have to make proves it. Although it seems like it was always this successful,  that is not the case and there is a big story behind this multi – millionaire company.

Starbucks was founded on August 18th 1987. The owners were Jerry Baldwin, Gordon Bowker and Zev Siegl. Howard Schultz, who is currently the CEO, was not the original founder, he was a marketing manager, but still helped them make key decisions that related to their success. Starbucks was created in Seattle, first on 200 western avenue, but then later moved to Pike’s place market, which is a place in Seattle They created Starbucks because Baldwin, Bowker and Siegl thought that Seattle needed a better high quality coffee shop. Starbucks had a lot of agents to help them make big decisions. Terry Heckler, their advertising agent helped come up with the name! Heckler thought it should start with “st” because he thought it was very powerful. After some brainstorming they first settled on Starbo. However later they got the idea of the name Starbucks, which was based off the famous novel, Moby Dick. Starbuck was one of the characters. After they came up with the name and brand, they had to start selling things! At first Starbucks only was selling and roasting coffee beans, and wasn’t actually selling coffee. Surprising right? Later on, Schultz convinced them to sell coffee and not just the beans. This made a lot more people come to their shop, and that was how Starbucks started its road to success!

The reason Starbucks has gained its popularity is because of all people that come and buy from their store. But how does Starbucks attract all these people? Well, when they started to expand to places like Chicago, it was very cold there. Starbucks took this as an advantage and started selling warm drinks, which made a lot of people come there. I mean who wouldn’t want to cozy up with hot chocolate when it’s cold outside! When they started to send coffee beans to other states, it wasn’t really that fresh when it arrived. So they started to use “flavor lock” bags. When they put it in with the beans, it made them still flavorful and fresh when people got them. Variety is key to getting more customers. So when they introduced frappuccinos, people were going crazy over it! Starbucks also tries to include everyone. That’s why they opened a store, that has employees that speak fluent sign language, so people who are deaf can feel comfortable there. Something else that is really important is the environment of Starbucks. I don’t if you have noticed, but a lot of Starbucks shops have nice chairs, lots of places to sit and much more! In fact, the Starbucks in the Golden Horseshoe, even has card games for you to play! This makes more people want to come. They keep in mind everyone’s wages, and has good prices compared to the quality of their things. Also since they do a lot of advertising, (like in movies, posters ads etc…) more people will find out about their products and will stop by and buy something, which will  make they business successful!

Expanding your business is very important because more people will know about it. That is why more stores results in more customers. Starbucks has a lot of shops around the world. Even planes carry it! But how did Starbucks expand its business? Well, way back in the early ages of the company, Schultz convinced them to expand out of Seattle and into other states. Also, when they started sharing stock, it was a big success and they actually gained $29,000,000 from just that alone! Isn’t that amazing! They used a lot of this money to expand on more shops. Also since they made a Starbucks app, people are able to order even when they are not there. This expands their business to something online, which allows more people to access Starbucks. They also expanded their business by making more high quality shops that have fancier items than usual. These shops are called a roastery. Inside you can actually see a big coffee roaster inside. There are tons of cool options you can get there, like coffee poured on ice cream and other things like that. They make these stores because they want to expand they shops and make a shop that has a really different and cool experience. It is also very easy for them to expand into different countries, because all they have to do is show them their existing business model. Expanding their shops is a way for everyone to enjoy Starbucks and also help Starbucks itself make some profit.

When you go to Starbucks, you order something that is made by the barista’s. But how do they get all these employees to come work for them? “Starbucks has taken an innovative approach that will increase employment opportunities” says Howard Rosenblum. There are some awesome things you get when you work there! Starbucks wants to help everyone have a happy life. That’s why Starbucks hires tons of refugees and is planning to 10,000 refugees by 2022. Also they are helping veterans and their families. Starbucks has employed 22,000 veterans! Additionally, Starbucks helps give the veteran education opportunities. These people all come because they need a job for their families, and Starbucks will help them because of all the trouble they have gone through. Now, once you start working there, things get pretty cool. Every week, employees get to have 1 or 2 free things. Also, anything they buy will be 30% off. If they are working hard and work for 1 year (this means no extra breaks or long absences) they can get 50% of the stock grant for the year. Full time employees also get health care and other medical needs. This means they have a very small part of the company. When make money, you make money. Did you you Starbucks will pay for your online college tuition? I know, shocking right?! But, you have use an online college from Arizona universities. When you finally take some time off and go on a vacation, Starbucks will actually pay for some of it! Starbucks will $10,000 for your newborn and time off. People work at Starbucks because of the cool things they get!

Being a really popular store means you will have a lot of competitors, which is exactly what Starbucks has to deal with. Starbucks biggest competitors are Dunkin and Mcdonalds. They are also competing with Maxwell house and Folgers. But where does Starbucks rank among its competitors? Sometimes it is hard to compare stores, because they are all different. Starbucks and Dunkin are heavily compared, Starbucks is more of a coffee shop, and Dunkin is more about donuts and food. But Mcdonalds is also very successful. This is because Mcdonalds was already super popular with its fast food items. So when they started to introduce coffee, it was automatically a big hit and many people bought it. Starbucks leads with 59.2% of how popular they are. Starbucks does have a lot of reasons to support they are better than their competitors. One thing that proves there awesome is that they have really quick service. Starbucks pretty much always makes your drink 5-10 minutes, and for the customers they have, that is super quick! Other stores that are popular, don’t go as quick. When you get your drink, you are never getting something really old. In fact, everything is super fresh and nothing is older than 30 minutes. I’m pretty sure most stores don’t do that! Starbucks is also more of a workplace than other stores. Starbucks offers free wifi so that you can work there. This makes them better than there competitors because they allow people to work there. It also helps their business because more people will come and buy things. People also buys things from Starbucks because of the great quality they have compared to other stores. They have really high quality machines that make delicious drinks. Also, the employees are super good and have perfected each and every drink. Starbucks ranks high among its competitors and will become even more successful!

Starbucks has done all of this to become really successful. But still, they could start becoming less and less famous. So how does Starbucks maintain its success? Well one big thing is making sure they make everyone happy. That is why they have a variety of choices and is pretty flexible too. They carry, regular, almond, coconut and soy milk. This is because more people will come again because of all the variety. They also have these many options because they are aware of allergies. If you are lactose – intolerant, you could have almond, coconut or soy milk. Or they could just remove the milk for you too. People may be hungry and not want a drink. It is very nice to also have food too. In fact, 20% of Starbucks sales are food. If you have a different array of things in your store, more people will keep on coming. This is because there are so many different things to try. Pretty much everyone knows what Starbucks is, because it is a very recognized brand. This means people will feel that they have a reliable coffee shop, which means they will keep on coming back since they know they can trust Starbucks. People also want to come back because of the cozy atmosphere. This is related to attracting customers too. But since it is so nice there, they will come back again.  Marketing agents say one of the most important things is how they refer to themselves to the 3rd place. This sounds very confusing but basically this means you have 3 places you go very often. The first one good be your house, the next could be home/work and the 3rd one is supposed to be Starbucks. This implies that you would go there often. Getting people thinking like this, makes them go there often. Cleary, there are so many ways for Starbucks to maintain its success.

This all proves how Starbucks became is so popular. Something I learned that it could start from from just selling coffee beans to making a huge company. You have find ways to make your business strong just like Starbucks. So now I’ve answered my question. This all is why Starbucks is successful!

Here are all my sources:

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Published 2009


Starbucks Corporation

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Published 2018


Starbucks SWOT analysis

Published July 4th, 2017


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