Essay About Original Starbucks And Operations Of Italian Espresso Bars

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Executive Summary
Three friends and coffee aficionados in Seattle, Washington founded Starbucks
Corporation in 1971. The original Starbucks sold only coffee beans and coffee making
equipment, not coffee drinks. Howard Schultz joined the company in 1982 as director of Retail
Operations. He tried to convince the founders of the company to incorporate the idea of selling
coffee at the locations after he observed the operations of Italian espresso bars, during a trip to
Italy in 1983. Schultz eventually purchased Starbucks for $4 million and merged it with his own
company called Il Giornale, retaining Starbucks name (Moon, Y, & Quelch, J., 2006).
Since its creation in 1971, Starbucks had faced many changes, and obstacles. Like the
need for large-scale changes in efficiency and standardization, optimizing revenue, lowering
costs, and at the same time maintaining quality. However, at the same time wanted to provide
customers with the “Starbucks Experience”, as a neighborhood coffeehouse. The analysis
conducted for this case study will help to determine if the proposed recommendations would
conflict with Starbucks operating model. These recommendations would help Starbucks to
consistently grow operations, and overcome many obstacles as the company expand its
operations to more profitable emerging markets (Moon, Y, & Quelch, J., 2006).
Background
Starbucks defined its business objectives as establishing the company “as one of the most
recognized and respected brands in the world” by continuing the rapid expansion of its retail
operations into new market, growing its specialty operations, and constantly looking for new
opportunities to capitalize on the Starbucks brand. Consequently, Starbucks has invested
significant resources in the hiring, training, and retention of employees in order to build a more
capable and stable workforce (Kotha, S. & Glassman, D., 2003). The expansion of its