Company Overview
Established in 1971, Starbucks turned from the purely coffee roasting company into the
world class beverage firm. Their annual revenue in 2011 was over $11 billion, contributed
from the diversified channels. Starbucks has had a stable growth since the start-up days
despite some difficulty in the 2008-2009 periods; end up with a total of over 17,000 stores
worldwide. Company has been known as one of the best place to work and the best
corporate responsibility in the world.
Company Strategies
Since majority of their stores have been built on the lease spaces with variety of share and
size, Starbucks established their own indoor design teams to handle the new stores
opening. All the stores have been designed to carry a consistence image and bring the best
experiment to the customers. Moreover, the company applied centralized system for newly
store expansion plans to have a better control over the costs.
Their expansion strategy was focused on “hub and spoke” model in which “hub” stand for
the central urban areas while “spoke” represent for the surrounding areas. At first, they will
establish their base operation (core management, region offices, etc.) in the “hub”, and
then expand to the “spoke” areas.
Although the “Starbucks Everywhere” strategy somehow reduced stores operating margin
(from 14% in 2007 to only 6% in 2008), however, it has been gradually increased the
brand images and the store traffic. The franchising also considered in 1995, and soon has
generated a source of stable profits for Starbucks through supplies, license fee and royalty,
