Are you one of the millions of consumers who purchase a Starbucks coffee every day? On average 40 million people consume a Starbucks coffee every week from one of its multitude of stores spread across the US. (W. P. Carey Starbucked: Background reading for a corporate reorganization, Jan 2008).
This statistic is an impressive example of Starbucks Corporation immense saturation of the coffee industry market internationally. But what is the escalating interest in this coffee giant’s huge success?
There are many reasons why Starbucks Corp. has received quite a lot of attention since its early formation in the 1980s under the shrewd guidance of Chairman and returning CEO Howard Schultz. One of the main reasons for its huge success depends upon its origins.
Who would have thought that a coffee house would make millions selling exclusive coffee at $5 dollars a cup? Starbucks is one of the greatest small business concept success stories in the world, and this is what has created such mass appeal for Starbucks.
Howard Schultz envisioned the mass commercialization of coffee, but not just as a drink but as a lifestyle as well. Starbucks became known as the “third place”, a place where people could meet up with friends or enjoy a great coffee within a relaxing atmosphere- a place to relax between work and home.
This became known as the “Starbucks experience”. (Scott Bedbury, Vice-President of Marketing, New York Times, 1997). Starbucks triumphed as the leader in the coffee industry for its simple marketing techniques and in its mass clustering of Starbucks stores within specified areas.
So where did it all begin?
Starbucks Corporation sowed its roots in the coffee bean industry in the early 1980s when the first coffee making and supply shop was established in Seattle, Washington by Jerry Baldwin, Zen Siegel and Gordon Bowker. These three men were more interested in selling coffee within their locality, to be enjoyed within the home than in mass consumerism of their coffee.
However, the breakthrough in commercializing coffee into a world phenomenon came with the visionary Howard Schultz, a unique salesman with the ambition for great things. His relentless desire in growing the Starbucks business concept in early 1987 made him enough money to buy out Starbucks from its original owners- Baldwin, Siegel and Bowker for a cool $4 million dollars.
Since then Schultz has created a multi billion dollar business that is known as the greatest business success since the emergence of Walmart-Inc Stores in 1962.
Is Starbucks a coffee franchise?
Despite the myth and constant enquiry, Starbucks is not a coffee franchise. Starbucks has grown from strength to strength as the world’s leading coffee chain through the strategic planning of Schultz and his Starbucks Corporation team. It has never needed the reliance of a strong franchise network as it multiplied through unique business partnership alliances from its earliest beginnings.
According to Schultz “Starbucks will only enter into licensing arrangements with companies when access to prime real estate which would otherwise be unavailable such as airports, national grocery chains, college and university campuses, hospitals, major food service corporations.” (Source: Starbucks Home Website)
While Starbucks Corporation may not be a coffee franchise, its underlying principles as the greatest small business success story in the world lends itself very well to the principles of franchising and should inspire all potential franchisors and franchisees how small seeds can grow into a large fruitful network with the right product, hard work and the desire to succeed.
In its own right Starbucks is the quintessential franchisor’s dream.
As mentioned before, Starbucks underlying business principles- a great product, effective marketing and PR and sheer hard work and determination- can be applied to a successful working principle for any successful coffee franchise.
Why not view the following successful coffee franchises that posses these founding business principles, and see how you can become part of the very successful and profitable coffee franchise industry.