Starbucks Company Overview
Starbucks Company Overview Starbucks, a well-managed assertive company, has consistently achieved growth since its early beginnings. Starbucks is the largest retailer of specialty coffee drinks and coffee beans in the nation sold through company-owned retail outlets and supermarket chains (Starbucks Corporation, 2009). The Starbucks name has earned its place as an innovative organization that represents a sense of community and shared ideals among its customers, its employees, and the world at large and its brand is equivalent to quality.
By combining its well-known name and brand with focused superior customer service, Starbucks is positioning itself in the market with enhancing both its product line and its marketing channels since it first opened its doors in 1971. Current expansion has obtained growth of over 2,000 locations throughout the United States, the United Kingdom, Canada, and Asia. Starbucks brings the “exciting coffee experience to its customers almost anywhere” (The Gourmet Retailer, 2009). Starbucks, formerly known as Starbucks Coffee, Team and Spice was founded 1971 in Pike Place Market, Seattle, Washington.
The owners, two men by the names of Gerald Baldwin and Gordon Bowker used to import and roast the coffee themselves in an old industrial building next to a meat packing plant. Baldwin and Bowker founded Starbucks because they loved coffee and tea and wanted Seattle to have the best. Based on many of fundamental ideas of Alfred Peet from Peet’s Coffee and Tea in Berkeley, Baldwin and Bowker had a solid business of selling fine coffees, with 5 stores operating throughout Seattle area. Howard Schultz joined Starbucks in 1982 as head of marketing.
At Schultz’s urging, Starbucks began testing its’ first espresso bar in Seattle, on April of 1984. According to Schultz and Jones Yang (1999), “Within two months, the store was serving 800 customers a day” (p. 60). The average number of customer before the espresso bar opened was 250. After years of being in business, Gerald Baldwin and Gordon Bowker decided to sell Starbucks in March of 1987. By August of 1987, Howard Schultz bought Starbucks for $4 million dollars. On August 18, 1987, the Starbucks as we know it was born.
By 1990, Starbucks had opened 84 stores. On June 26, 1992, Starbucks went public and was listed on the NASDAQ with a price of $21 a share. Starbucks for the next decade continued to expand its’ stores domestically and internationally. Starbucks also continued to widen their menu selections by offering food and specialty drinks. By the end of 1999, Starbucks had opened 2,498 stores. By 2007, Starbucks opened 15, 756 stores. From 2000 to current year, Starbucks continues to be the leader in the coffee industry. Market
Role of Government Regulations Government regulations has major implications in different aspects of Starbucks’ business. First of all, being a publicly listed company, government regulations has major implications on financial reporting and accounting activities of the company. For example, Starbucks need to comply with strict government regulations such as Sarbanes Oxley Act of 2002 and other SEC/US GAAP related compliance issues pertaining to financial reporting and accounting policies. (Sutherland Asbill & Brennan LLP, April 2003, p. ) Non adherence to such regulations can result in significant penalties and fines for Starbucks. Government regulations also play an important role in global business of Starbucks, such as import of raw materials like Coffee and international operations of the company. Changes in government policies pertaining to import duties, tariffs, etc. can impact the import pricing of Company’s raw materials such as Coffee. Similarly, policies pertaining to international taxation can affect the profitability of its international subsidiaries.
Government regulations also affect areas pertaining to environmental protection. As Starbucks is a socially responsible corporation, it adheres to government regulations pertaining to environmental protection, disposal of waste, etc. Other areas where government regulations impact Starbucks operations are regulations pertaining to human resources of the company in areas such as recruitment and hiring, salary, etc. Starbucks need to comply with labor laws to avoid penalties and fines related to such laws.
Starbucks also has to comply with federal and state regulations that are applicable to the organization. Issues and Opportunities Summary and Conclusion References Starbucks Corporation. (2009). Starbucks. com. Retrieved September 2, 2009, fromhttp://www. starbucks. com/aboutus/overview. asp The Gourmet Retailer. (2009). gourmetretailer. com. Retrieved September 2, 2009, fromhttp://www. gourmetretailer. com/gourmetretailer/magazine/article_display. jsp? vnu_conte nt_id=1086864 Schultz, H. , & Jones Yang, D. (1999).
Pour your heart into it. How Starbucks built a company one cup at a time. New York: Hyperion. Sutherland Asbill & Brennan LLP (April 2003). Legal Alert: Sarbanes-Oxley Act of 2002 Compliance Update. Retrieved September 5, 2009, from http://www. sutherland. com/files/News/3523433c-b3c0-4daf-9da3-526153639409/Presentation/NewsAttachment/887a0e6b-bb72-4b68-9824-8d77f8a3de86/926210_2. pdfhttp://www. sutherland. com/files/News/3523433c-b3c0-4daf-9da3-526153639409/Presentation/NewsAttachment/887a0e6b-bb72-4b68-9824-8d77f8a3de86/926210_2. pdf