Starbucks
Starbucks Coffee: A Multichannel Strategy
What'll you have? Skinny latte, espresso, almond truffle mocha? How about a Raspberry Mocha Chip Frappuccino or Tazoberry and Cream? Consumers globally are increasingly turning to Starbucks to quench a growing thirst for specialty coffee and beverages.
THE COMPANY
Starbucks has been hugely successful. Net sales have grown from $800,000 in 1990 to an estimated $2.6 billion in 200 I. Starbucks got its start in 1971 as a gourmet coffee bean store in Seattle. In 1987, Starbucks' current chief executive, Howard Schultz, opened the first stylish Starbucks coffee bar. The focus then and now has been on high-end gourmet coffees. Customers can buy fresh- roasted beans from around the world, gift packs, Star- bucks coffee cups, sweets, as well as freshly brewed coffees. All coffee beans are roasted in-house to maintain quality. The company prides itself on buying top-quality beans. It vacuum packs the beans two hours after roasting and donates to charity any beans that go unsold seven days after opening the bag.
Starbucks employees are given over 24 hours of coffee making training and lore. Starbucks maintains designers and architects in-house to develop, maintain, and update the hip, upscale image of the stores. All of this has led to the high-quality service that has built Starbucks' brand loyalty.
Citing concern about maintaining quality, Starbucks initially turned down lucrative franchising agreements for its coffee bars. As Starbucks moved into international markets, however, it utilized licensing agreements with local partners in addition to having company-owned stores-a departure from its original channel strategy. Starbucks even has licensed stores in North America. There were over 4,303 Starbucks stores in place globally as of May 2001. Roughly one-third of the international stores are company-operated, compared to almost 70 percent operated by licensees. The percentages are re- versed for the North American...
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