The first Starbucks location opened in 1971. The name Starbucks was inspired by Moby Dick’s
first mate. This name and the mermaid logo were inspired by the love of the sea, from Starbucks
original location in Seattle Washington in the heart of Pike Place Market. Starting as a single
shop specializing in high quality coffee and brewing products the company grew to be the largest
roaster in Washington with multiple locations until the early 80’s. In 1981, current CEO Howard
Schultz, recognized a great opportunity and began working with the founder Jerry Baldwin. After
a trip to Italy to find new products, Schultz realized an opportunity to bring the café community
environment he found in Italy to the United States and the Starbuck’s brand we know today
began to take form. Selling espresso by the cup was the first test. Schultz left Baldwin to open
his own Italian coffee house, II Giornale, which found outrageous success and in 1987 when
Starbucks decided to sell the original 6 locations, Schultz raised the money with investors and
purchased the company and fused them with his Italian bistro locations. The company
experienced rapid growth going public in 1992, and growing tenfold by 1997, with locations
around the United States, Japan and Singapore. Starbucks also began expanding its brand.
Throughout the history of Starbucks they have offered the following products:
• Offering Starbucks coffee on United Airlines flights.
• Selling premium teas through Starbucks’ own Tazo Tea Company.
• Using the Internet to offer people the option to purchase Starbucks coffee online.
• Distributing whole bean and ground coffee to supermarkets.
• Producing premium coffee ice cream with Dreyer’s.
• Selling CDs in Starbucks retail stores.
Starbucks uses minimal advertising and has grown on word of mouth and brand recognition.
According to Garza by 2004 Starbucks had reached 1,344 locations.
1. In the beginning, how was Starbucks different from other coffee options for
coffee drinkers in the United States? What activities and assets did Starbucks
leverage to differentiate itself from competitors?
Starbucks strategy at the beginning was based upon creating a symbolic-expressive value
through a social meaning concept of offering the American community meeting places; this
positioned its original products and made associations to identify consumers with self-expression
providing personal, social and sociocultural meaning.
Assets acquired such as Starbucks-branded locations were decorated with detailed patrons to
define a symbolic environment focused in giving privileged interactions with specialized staff
(baristas) to support status and privilege. Starbucks focused in assuring supply chain innovation
upon differentiation in the coffee tone providing unique flavor products and consistency in the
product quality, specialized service and speed.
When Schultz took over, he was determined to establish Starbucks as “the third place” beyond
home and work. He wanted to differentiate and create a distinct identity of Starbucks and so was
not receptive to the idea of selling prepared drinks. He justified it by saying that getting into the
“restaurant business” would distract the company from its core assets and activities: roasting and
