Business World

Swinton 1

PRODUCTS, SERVICE, AND PRICES IN THE FREE MARKET

University of Phoenix

MBA 501

May 7, 2007

The company or organization I chose to focus on is Starbucks Corporation. I will begin with a few little known facts about this mega corporation. Starbucks Corporation is a coffeehouse chain based in the United States (Schultz p.56). Starbucks was named after the character in the novel Moby Dick. Also, this is the largest coffee house company in the world which consists of 7521 self-operated and 5647 licensed stores in 3 countries. Starbuck serves a multitude of beverages such as drip brewed coffee, espresso- and non-espresso-based hot beverages, tea, and ice-blended drinks. This company also offers pastries, salads, and sandwiches. Through its Starbucks Entertainment division and Hear Music brand, the company has ventured beyond refreshments into books, music, and film (Market line). Beginning with 17 stores, Starbucks went through a rapid expansion that began in the 1990’s and continued in to the 2000s.

Swinton 2

The chairman of Starbucks Howard Schultz aim was eventually to operate more than 40,000 retail stores around the world. Howard wanted the company to act like a small business company (Schultz 78). According to the company fact sheet, as of February 2007, Starbucks had 7,521 company-operated outlets worldwide: 6,010 of them in the United States and 1,511 in other countries and U.S. territories. In addition, the company has 5,647 joint-venture and licensed outlets, 3,391 of them in the United States and 2,256 in other countries and U.S. territories. This brings the total locations (as of February 2007) to 13,168 worldwide. Starbucks are even beginning to pop up in popular grocery chains in the US, and in some cities (e.g. Seattle, Vancouver) there are actually Starbucks stores located across the street from each other (The Insider 2006). Starbucks main focus was to make their establishment the third place as they called it. They wanted to make an environment that’s comfortable to be in aside from home and work. In other words, the more time spent in the store the more money people would spend. This is a main reason for all the comfortable chairs and tables with hard-backs located throughout the cafй. Another great idea the company came up with is providing enough outlets so their customers can charge and use their portable devices and or laptop computer. And unlike many other store Starbucks do not charge for their wireless connection.

Swinton 3

It is hard to argue with the increasing sales of Starbucks within the last twenty years. After reviewing the moguls of the company which consist of ten of the top executive’s in the world and four being women it showed that the company produced a brand that is known world wide. Starbucks, for instance, was ranked 91st in the 100 Top Brands 2006 ranking of Business Week and Inter brand, an international branding consulting firm. The Business Week-Interbrand combine valued the Starbucks brand at $3,099 million in 2006, up from $2,576 million in 2005 (Fortune 2005). Now, after reviewing the following I can only see a couple of possibilities of how I or Starbucks can increase revenues. Starbucks created and I also thought about and agreed that exploring the entertainment business would be a gold mine. Starbucks entered the music industry in 1999 with the acquisition of Hear Music, and