The growth process of American coffee giant Starbucks: success and failure also expansion

In the late 1990s, Starbucks, a loanword with an ingenious combination of free translation and transliteration, entered the vision of Chinese white-collar workers. Since then, rich fragrant coffee, soft and comfortable sofas, fresh and soothing music, heavy traffic outside the floor-to-ceiling window, together with the high price of 30 yuan a cup, have become an indispensable part of the memory of the generation. Sitting on your knees in such a "super-bourgeois" atmosphere in your spare time has a significant catalytic effect on the exchange of feelings among best friends, the promotion of feelings by couples, and the harmonious relationship between colleagues and partners. Now, however, people are beginning to worry that all this may soon only exist in memory.

Coffee is also "crazy"

Almost all business myths include a "humble" origin, a visionary leader and an unreplicable growth experience, and Starbucks is no exception. In April 1971, Americans Gerald Baldwin and Gordon Pork opened a company specializing in coffee beans and spices at the open-air farmers' market in Seattle.

In 1982, Howard Schultz, a vice president of an imported kitchen utensils company, decided to move to Starbucks as director of operations and marketing, but just three years later, he left Starbucks to set up the Daily Coffee Company. I hope to realize my dream of "coffee chain". In 1987, Starbucks was up for sale. When Schultz learned that he was determined to raise $4 million for the acquisition, Daily Coffee was merged into Starbucks, and Schultz became chairman himself. According to his design, Starbucks began the journey of expansion.

In 1990, Starbucks opened 30 new stores and made a profit for the first time, followed by 32 in 1991 and 53 in 1992. With the help of two investment banks, Starbucks shares were listed on NASDAQ on June 26, 1992, raising a total of US $28 million, laying a solid foundation for Starbucks' subsequent development. It was with the help of a lot of money that Starbucks began to accelerate its expansion.

As Starbucks prepares to go public, both large and small media in the United States are watching its latest developments, and the coffee chain has no shortage of fans in the financial industry, most of whom are happy to see their favorite brand successfully listed. For a while, "Starbucks" became a buzzword, stimulating a large number of public tentative consumption. After the listing of Starbucks, the stock price "rises as soon as the wind blows", and has become a "regular customer" in the financial and economic pages of newspapers and magazines, arousing more people's curiosity. Although Starbucks doesn't spend a penny on publicity, it is far more effective than paid advertising.

At one point, Starbucks shares rose 22-fold in 10 years, surpassing the combined returns of Wal-Mart, General Electric, Pepsi, Coca-Cola, Microsoft and IBM. Starbucks has also been named the most respected company by Fortune magazine for many years in a row. Schultz amassed personal wealth worth 1.3 billion dollars in just 20 years and created this miracle in an ancient industry with a history of more than 300 years.

It's not a drink, it's an experience.

The name "Starbucks" comes from a calm and charming first mate in American writer Melville's novel Moby Dick, whose hobby is drinking coffee. Starbucks' green logo is the mermaid-like double-tailed Poseidon, which is said to be inspired by medieval woodcuts. Today, "Green Mermaid", together with McDonald's golden "M", has become evidence of the global spread of American business culture.

In order to ensure the quality of coffee, Starbucks has established a global procurement system to select the best coffee beans and roast them in Seattle, so as to ensure the consistency of product quality in local stores. For more than 40 years, except for direct stores, Starbucks only allowed corporate joint ventures and authorizations, and refused to join individuals; legal persons who wanted to join must also go through rigorous intensive training to ensure that operators identify with Starbucks' brand concept and gain a foothold in the long term, rather than overdraft brands to make quick money.

Starbucks shop assistants have been carefully selected and strictly trained. The company's annual training expenses account for 11% of the total expenditure, not only to teach customer service skills, but also to deepen employees' understanding of coffee culture. Starbucks uses a high-end semi-automatic coffee machine. After brewing a cup of coffee in 23 seconds, Starbucks must deliver it to customers within 10 seconds. In order to maintain the original aroma of coffee, smoking is prohibited in Starbucks stores, and staff on duty are not allowed to use perfume.

Starbucks sells not only quality products and perfect service, but also the coffee experience, which is at the core of Starbucks brand value. Laughing through the huge glass window to see the crowd surging, and then sipping a sip of strong coffee is very consistent with the feeling of "yuppie". In many busy business districts, people can see the sign of another when they stand under the sign of one Starbucks branch, which virtually reinforces the sense of trust in the hearts of fans.

"I'm not in the office, I'm at Starbucks; I'm not at Starbucks, I'm on my way to Starbucks." Starbucks advocates the concept of "third space" beyond offices and residences, giving a stylish soul to coffee, an ancient consumer product.

Success expands and failure expands.

Today, Starbucks has more than 20, 000 stores in dozens of countries and regions around the world, and Schultz once set Starbucks' ultimate goal of 25000 stores to become a veritable global coffee empire. In Seattle, Starbucks' hometown, less than 10,000 people "own" a Starbucks branch. Starbucks has more than 400 stores in Greater China, about half of which are in the mainland, while Shanghai has the largest number of Starbucks stores in the mainland.

However, just as the famous names of Starbucks and Schultz reverberated in mainstream business school classes, the objective law of "prosperity and decline" and the simmering financial crisis threw Starbucks into a sudden havoc. In July 2008, a sharp decline in turnover forced Starbucks to close 600 stores and cut 12000 jobs worldwide, resulting in a net loss of $6.7 million in the third quarter of that year, halving its share price and hitting an all-time low. In its announcement, Starbucks blamed the economic downturn and shrinking pockets of target consumers, but Schultz privately had to admit that the excessive expansion from 1, 000 to 13000 stores has led to the dilution of the "Starbucks experience" and "brand commercialization".

Weak sales in the US have forced Starbucks to step up its overseas expansion. Brand promotion has increased the flow of admiring passengers, and quickly exceeded the reception capacity of the branch, resulting in a decline in service quality. The localization strategy implemented to cut costs has also seriously eroded the service experience. For example, in some branches in China, in addition to tables and chairs, music and decorative paintings are still the same, milk, cups, straws, mixing sticks and other items will make regular customers feel like a dog's tail. Some storefronts are overcrowded, and the densely arranged tables and chairs are reminiscent of snack stalls at temple fairs.

At the same time, the success of the coffee industry has made Starbucks believe that it can turn stone into gold and begin to expand across industries. Since 2007, Starbucks has set its sights on film production, book publishing, discount stores and other areas, even pouring the coffee at the bottom of the box into glass bottles and fake-hand supermarkets to sell them cheaply for two bottles for $3.

Although Schultz was "pro-government" again in 2008, reflecting and adjusting his expansion strategy, and the company's profit situation did improve significantly in the following years, people still heard the news of the frequent opening of new Starbucks stores and saw customers flee the crowded and noisy storefront with paper cups. On the other hand, the "de-experiential" glass bottle of Starbucks coffee is still lonely on the supermarket shelves waiting for the patronage of die-hard "star fans".

(responsible Editor: Leo)