Starbucks opened its first store in 1971, at a time when coffee consumption in the United States had been declining for a decade and rival brands used cheaper coffee beans to compete on price. The Starbucks founders decided to experiment with a new concept: a store that would sell only the world’s finest imported coffee beans and coffee-brewing equipment. Its original store in Seattle’s historic Pike Place Market didn’t sell coffee by the cup, only beans. The name, inspired by that of a character in Melville’s Moby-Dick, evoked the romance of the high seas and the seafaring tradition of the early coffee traders.

Howard Schultz came to Starbucks in 1982. While in Milan on business, he had walked into an Italian coffee bar and had an epiphany: “There was nothing like this in America. It was an extension of people’s front porch. It was an emotional experience.” He had a vision of bringing the Italian coffeehouse tradition back to the United States and convinced the founders of Starbucks to test the coffeehouse concept in downtown Seattle, where the first Starbucks caffè latte was served in 1984. Following the success of the coffeehouse experiment, Schultz left Starbucks for a short time to start his own Il Giornale coffeehouses, which offered brewed coffee and espresso beverages made from Starbucks coffee beans. In 1987, Shultz purchased Starbucks with the help of local investors, with the aim of creating a company that would reflect Italian elegance blended with U.S. informality. He envisioned Starbucks as a “personal treat” for its customers, a comfortable, sociable gathering spot bridging the workplace and home.......

Questions

1. What are the key aspects of Starbucks’s strategy and tactics?

2. Where does a company like Starbucks draw the line in supporting socially responsible programs? How much of its annual budget should go toward these programs How much time should employees focus on these programs? Which programs should Starbucks support?

3. Starbucks has worked hard to make business decisions that are both ethical and responsible. How are the results of Starbucks’s socially responsible programs measured?