The good people and did not compromise on quality.

The company that I have chosen is the Starbucks Corporation, and addressing
the history of the companies meteoric growth using the precedent that was put
forward by the companies long tenured CEO Howard Schultz. Back in 1984 when Schultz
bought the original company, there only 6 stores and none actually served
drinks, they just roasted beans. So how did he growth the behemoth that it
currently from such a humble beginning? At first he walked away, the original
owners had no interest in becoming a restaurant, so it forced him with backing
of investors to start his own company called Il Giornale. The company was a
modest success and within three years the original owners of Starbucks decided
to sell the brand and focus exclusively on the Peets Coffee brand that they
also owned. As a result Howard Schultz was forced to return to his original
investors and find new ones but persuaded them all that buying Starbucks was a
worthy endeavor.

From the very beginning Howard Schultz didn’t approach the new firm with reckless
abandon; he approached it with unwavering passion but also as a focused project
manager. He established a profitability schedule, store opening schedule; and
surrounded himself with good people and did not compromise on quality. Part of
his management team’s growth strategy was a focus on rapid growth, ballooning
up to 3,500 stores by the year 2000, earning the jokes of the Starbucks within
the Starbucks or across the street from one another.

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By 2007 the firm had tripled in size to almost 12,000 stores, and in
February, 2007 a leaked memo from Howard Schultz showed that he recognized the
problem that his growth strategy had created, he said that “stores no longer
had soul of the past and
reflect a chain of stores vs. the warm feeling of a neighborhood store.” (Professor
J. Quelch; Harvard Business Review; How Starbucks’ Growth Destroyed Brand Value;
July 2, 2008). At first the executive team tried to correct the issues and add
value through innovation by adding WI-FI and creating and selling the brands
own “coffee shop” music, and focusing back on coffee and the quality of their
drinks. But the firm was forced to reckon with the reality of the brand having
oversaturated the market and needing to recognize, with the need to close
stores.

The tree pruning initiative and reorganization
was exactly what the firm needed in order to reinvigorate the brand and their
tired brand image; they had found new life, and more importantly new loyal
customer base in an ever expanding market. By 2017 however they have found
themselves in a similar situation, now with 8000 domestic stores and 18000
stores internationally Wall Street is indicating that it is time for the firm
to put the brakes on opening new stores and try a new approach. This is easier
said than done; in the China market for example the firm opens a new store
every 14 hours and has added 1300 new stores since 2011.

New Direction and Ideas: Branding

The firm is now, in 2017, faced with a
similar dilemma as 2007, consumers and experts alike are noticing that there
are just too many store options, what does a world class, uber popular brand do
to continue growth and keep with their CEO’s plan while addressing the growing
concern of oversaturation?  

The Starbucks Mission Statement is:
“Our mission: to inspire and nurture the human spirit – one person, one
cup and one neighborhood at a time.” In configuring their service to
include new formats, it is essential that they do not forget this; customers
enter Starbucks to find their “third place” and embrace the Starbucks
experience.

There are three new concepts
that have the potential to expand the brand into new markets and locate new
customers. These new concepts will allow the brand to break from the one style
of brick and mortar that while has far has wildly succeeded, it has also
clearly defined