Starbucks, the coffee making and serving company took its unique name from a character of the novel â€œMoby Dickâ€ and has its roots in Seattle, Washington. Here you can still find the very first coffee shop at the pike place market, which has been opened since 1971. In 1987, Starbucks was bought by Howard Schultz and ever since has been exploring all over the United States. Today Starbucks is the most known chain of coffeehouses around the world (Lambert, Emily â€œThe buck stops hereâ€, Forbes 2003 Volume 171, p.52). There are over 6500 coffee stores all over North America and 30 other countries around the world. According to Fortune Magazine three new stores are opened every day making Starbucks biggest competitor Starbucks itself by cutting off up to 30% of neighboring store` s sales. The companyâ€™s strategy is to â€œblanket an area completely, even if the stores cannibalize one another` s businessâ€, as it â€œcuts down on delivery and management costs, shortens customer lines at individual stores, and increases foot traffic for all the stores in an areaâ€ (Daniels, Cora â€œMr. Coffee, The man behind the $ 4.75 Frappuccino makes the 500â€Fortune 2003 Volume 147).
This is probably why Starbucks became so popular and famous with an unbelievably high average visit rate of 18 times a month by a typical consumer (growing 6-8% a year) and a minimum cost of advertising (only 1% of their annual revenues). No other business company reaches the numbers that Starbucks has. In March 2003, they even made it to Fortune Magazineâ€™s top 10 of 500 of America` s most admired companies for the first time. .
Starbucksâ€™ sales have kept on increasing up to 20% a year ever since they went public in 1992 (Holmes, Stanley â€œPlanet Starbucks to keep up the growth, it must go global quicklyâ€, Business Week, 2002, issue 3798).