August 27th, 2013
Case Analysis #1: Starbucks Corporation, April 2012

Starbucks is one of the world’s most recognized and loved brands. It is known in most parts of the world, leading it to become the largest supplier of coffee on the planet! Although it seems like Starbucks has always been on top of its game, that is certainly not the case. A brief history on the company provides some insight into its strengths and weaknesses over the company’s twenty-six year existence. Starbucks was started by Howard Schultz, a man who once visited a coffee shop and realized that the coffee he was drinking there was superior to any coffee he had experienced in the past. His subsequent visit to Milan inspired him to open his own coffee bar called Il Giornale, and by 1987, he decided to acquire the six Starbucks locations in the United States and merge them with the three locations of Il Giornale. Starbucks locations spread like wildfire over the next couple of decades, and the company raked in profits as a result. This expansion had a logic that involved a cluster system. This meant that a single metro area would have multiple Starbucks locations, and due to this, so residents could always have access to a convenient location, regardless of whether they were at work, home, or some other place. Starbucks, like most other global scaled companies, took a major downturn with the economic recession of 2008. It hit its peak stock price of forty dollars in October of 2006. The economic crisis decreased the prices of Starbucks stock by seventy five percent over the succeeding couple of years, and growth of same-store sales as well as operating profits were sharply reduced. A major problem that decreased Starbucks’ success can be attributed to the fact that company grew too quickly, and unfortunately many employees had to be laid off to make way for a reinvention of the