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Starbucks: how to become the greatest coffee shop ever☕️🧁

Country: the USA
Valuation: $150 billion
Business model: restaurant

This is the world largest company selling coffee. There are more than 30,000 coffee shops in 66 countries. In the last few years, Starbucks has become one of American symbols as well as McDonald’s. Nevertheless, the startup had to go through big challenges and fails. Let’s look into its history point by point.

Concept
Starbucks is an American coffee shop chain. The company offers hot and cold espresso-based drinks, coffee beans, tea, sandwiches, cakes, and stuff for coffee like mugs and thermos bottles.

Starbucks refuses the idea of franchising. That’s why a mere businessman cannot buy its franchise. Franchising is possible only when opening a coffee shop at the airport, educational institution, or other socially important objects.

Besides, the company has started an international expansion. Though, in some regions the coffee shop didn’t settle in as successfully as in the US. For example, in Austria Starbucks hasn’t been in great demand which made them to cease the expansion.

Background
Jerry Baldwin and Zev Siegl used to be teachers of English language and history. Gordon Bowker worked as a writer. In 1971, altogether they decided to chip in $1,350, borrow $5,000 more, and opened the first coffee shop in Seattle. They were inspired by the idea of trading high-quality coffee beans and equipment.

Initially, the startup didn’t even make coffee: they only sold roasted whole coffee beans. In the first year, Starbucks bought beans from Peet’s Coffee and then directly took from farmers.

Expansion
In 1987, the original owners sold the company to Howard Schultz. At that point, he already ran another coffee shop chain. Howard renamed it to ‘Starbucks Corporation’ and started rapidly expand. The company opened the first cafes beyond Seattle.

In 1995, Starbucks owned 165 points of sale thanks to entering the stock market. The annual income amounted to $73 million. The company valued at $270 million. 12% sold stocks brought in enough money which allowed the startup to double the number of shops.

Fails
In 2009, the company launched a new kind of instant coffee ‘Ready Brew’. However, many critics claimed that Starbucks devalued their own brand by offering instant coffee.

According to Reuters’ investigation, it was estimated that the company payed only £8,6 million of corporative taxes despite the revenue of £1,3 billion. This accusation cast a slur on Starbuck’s reputation.

The coffee shop also didn’t manage to develop in Australia and took big losses. They had to close 61 shops out of 84 and, subsequently, sell the rest of them.

Regardless of Starbucks’ strategic mistakes, the company remains the greatest coffee shop in the history. The people who weren’t related to coffee industry, eventually, conquered it.

What do you think about Starbucks’ story? Would you like us to write about the causes of its success? Share in the chat 💬


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