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How Starbucks Became An $80B Business | amazon business website

How Starbucks Became An $80B Business

How Starbucks Became An $80B Business

How Starbucks Became An $80B Business with near cafes across the globe Starbucks has become more than just a household name from its iconic cups often adorned with misspelled names to the espresso inside them Starbucks has catapulted from one coffee bean shop in Seattle to a sprawling billion-dollar business over the last years Starbucks sales account for percent of the total cafe market yes nearly two-thirds of all coffee sold at cafes in us comes from a Starbucks but this impressive expansion hasn't come without growing pains with more than locations in the US alone Starbucks has spread itself too thin having too many stores have led to fewer transactions at individual stores to compensate the company and raised prices but doing this too quickly or too often can drive customers away so how did this happen and

Whats a coffee giant to do about it the year is college friends Zev Siegel Jerry Baldwin and Gordon Bowker decide to get into the coffee business 

they found a mentor and Alfred Peet founder of Petes coffee and the man responsible for bringing custom coffee roasting to the US he knew the coffee industry inside and out especially the gourmet and he was the most educated coffee guy in the country at that time so with Petes help the three friends opened Starbucks a coffee bean shop and roastery at Seattle's famous Pike Place Market in Pete provided the young entrepreneurs with roasted coffee beans and connected them with coffee brokers until they could set up their own roastery and source their own beans for the first decade the founders opened five more locations in Seattles at this point contemporary coffee consumers might have noticed a glaring absence actual coffee drinks thats a thing about the 70s coffee culture it didnt really exist outside the home there were no coffee bars nor was there much of a demand for espresso based bricks you purchase coffee beans and you either took them home as beans or we ground them for you in the store nobody expected to get a beverage at a Starbucks coffee store until after Starbucks initial focus was bringing high quality beans to consumers
Who is more accustomed to instant or canned coffee but that changed with the addition of one man the company hired its first really professional director of marketing and sales and that man was Howard Schultz and he couldn't figure out

Why we weren't selling beverages in Schultz travels to Italy and returns with an idea turn the coffee bean stores into cafes Starbucks served 

its first latte the next year the experiment was a success and four years later Schultz partnered with investors and bought Starbucks for a million he was only at the time Schultz pursued a strategy of aggressive expansion by the time the company went public in it had stores by and it opened more than a thousand locations including its first international cafes in Japan and Singapore growth was so rapid that just three years later Starbucks opened its mm location once they found a business model that works that translated to other geographies that gave them the opportunity to really accelerate growth really at the pedal to the metal in terms of expanding across the globe shell switch from CEO to executive chairman in at
Which time Starbucks operated stores in more than a dozen countries between and the number of Starbucks cafe is more than quadrupled from to over during this period the company opened an average of stores every year including in alone sales shot up from billion to nine-point four billion consumers were increasingly ditching their kitchen mugs for these iconic paper to go cups but then Starbucks hit a wall financial crash that year its rapid growth screeched to a halt and its stock price plummeted by as cash-strapped consumers backed away from Tracy coffee habits the Great Recession was devastating for the restaurant industry

What we typically salt or treating out some consumers taking a pause on that everyday luxury that Starbucks offered

 so Starbucks brought back Howard Schultz this news alone caused Starbucks stock to shoot up by Schultz halted growth and focused on customer experience he shuddered cafes more than and another in and laid off around baristas a month after his return Schultz ordered Starbucks to close all of its Us locations for one afternoon so he could retrain more than baristas about how to make its signature expresso Schultz his goal was to remind customers

What they loved about the brand by making the stores and experience not just a place to get a quick coffee they stopped selling breakfast sandwiches

 and brought back inhouse grinding infusing the cafes once again with that fresh coffee aroma Schultz even mandated the removal of automatic expressive sheets these maid service faster but removed much of the romance and theater of watching baristas craft each cup of coffee Schultz's makeover worked the company's stock soared more than one hundred and forty three percent in and same-store sales rebounded Starbucks has posted positive same-store sales ever since during Schultz's makeover of the cafes Starbucks barely opened any new stores but the pace picked up again in by Starbucks opened to nearly more locations ending the year with cafes around the world however this brings us back to the first problem profit cannibalization oversaturation particularly in urban locations has spread sales thin because Starbucks has so many locations customers don't have to be loyal to just one so even if Starbucks overall sales are growing its individual seem store sales wont reflective compounding this problem are changing consumer preferences people are shying away from sugar-laden calorie pubs
Which happens to be one of Starbucks staples these signature frappuccinos contain an average of grams of sugar that's more than double the recommended daily limit of sugar so to combat these problems Starbucks is changing once again the company announced the closure of a hundred and fifty stores in that may seem like a drop in the bucket for a sprawling company like Starbucks but its three times the number of stores it usually closes each year the company will still open stores but future growth will be focused additionally decadent drinks topped with
Whipped cream or taking a backseat instead the company is pushing lighter drinks like cold brew and its fruity refreshers the company also plans to roll out delivery to a quarter of its company-owned stores by the middle of perhaps the company's biggest undertaking is its new line of upscale stores Starbucks reserve roastery these massive square foot stores are designed to be a tourist destination here Starbucks baristas and bartenders experiment with different brewing methods and craft new innovative beverages these have proven popular in the first weeks the Shanghai roastery made an average of thousand dollars every day
Which is double
What a regular cafe makes in a week the company is open for roastery so far with plans for two more it doesn't want you to feel like anything else that Starbucks has those are the kind of experience stores the high-end experience stores that consumers are really looking for but I think
What's gonna be actually coming out of it as the halo effect that puts the Brandon and a higher light among consumers now that that's pretty meaningful you you 'How Starbucks Became An $80B Business
How Starbucks Became An $80B Business