Starbucks: Case Study on Motivation



Starbucks: Case Study on Motivation

Starbucks began by three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who knew each other in the University of Seattle. In 1971, the first name of their store is “Starbucks Coffee, Tea, and Spice” in Seattle, Washington’s Pike Place Market. They engaged in making profit from selling coffee beans roasted to individual customers and restaurants. Until 1982, they had increased the number of stores to four. During the same period, a sales representative of the house ware business in New York, Hammerplast, visited them. Howard Schultz wanted to know why a small company needs a large number of percolators from Hammerplast. Because of the trade relationship between these two companies, he was acquainted with the three inventors. After he realized the atmosphere and environment of the company, he decided to be a part of Starbucks, then as a director of marketing and retail sales.

In the following year, he had a vocation to Milan, Italy. Though the time, he experienced an entirely different coffee culture from the United States. The culture of Italian café had been one part of people’s daliy life. There were numerous coffee bars around the area and the public usually liked to socialize in a coffee bar. Under those circumstances, Schultz had an idea of a new flavor of café and a stylish environment to communicating with friends.

After the trip, he prepared the business plan for his vision. However, the three initiators did not want to transfer their business into restaurant industry. Consequently, in 1985 he chose to establish a new coffee shop, named II Giornale, in Seattle. After the next two years, due to the successful strategy of Schultz, the original three owners of Starbucks decided to sell their corporation to Schultz. Then Schultz gathered other investors and took over the name of II Giornale to Starbucks. He sought to pursue his dream to make everyone taste his coffee, so he focused on the rate of expanding. At that time, he though that the most efficient way to grow the amount of branches is to set up new stores in other places. In I987, Starbucks had the first overseas store in Japan.

In the subsequent years, owing to the rising expenses with the worldwide broadening, there was a deficit in Starbucks for the next three years. In contrast, he firmly believed that not to “sacrifice long-term integrity and values for short-term profit” (Michelli, 2006). In 1991, it turned loss into gain and its sales grew up sharply to 84 percent. Until the end of 2002, Starbucks has developed from 17 stores to 5,688 spreading over 30 countries in by this strategy, it is an over 300 times growing in these ten years! (shown as Exhibit 1) From Fortune magazine, Starbucks was ranked the 11th best company to work for in 2005 in the USA and then risen up in 2006 to 29th. As to 2007, it was ranked as the 16th best. In the same year, Starbucks was also voted as one of the top ten UK workplaces by the Financial Times. (Resource: wikipedia)

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