How a small idea became a huge business. Growing up in Brooklyn Howard Schultz had no aspirations. His only goal was to escape the struggles his working-class parents lived every day (Schultz 107).

Eventually, Schultz discovered his talent for sales, and was hired by a Swedish housewares corporation. By age 28, he was vice president in charge of sales in the United States. He has an excellent salary, a co-op apartment in New York City and was happily married. However, Schultz wasn't satisfied with all he had accomplished. He wanted to be in charge of his own destiny (107).

It was then in the early 1980's that he was introduced to the company, Starbucks Coffee and Tea. Starbucks's original was modest but full of character. Schultz was immediately impressed by its charm. Importantly, he thought the coffee was wonderful (Schultz 108). He then had dinner with a friend, Jerry Baldwin owner of Starb

Then, after working there for a year, he had a simple experience that changed his life. He traveled to Milan, Italy to attend an international housewares show. While, traveling he noticed a little espresso bar. The espresso bar brought to his attention the romance and ritual of a coffee bar. He realized that his company's connection to coffee lovers did not have to be limited to their homes, where they ground and brewed the coffee. Instead, he imagined that, coffee should be sold by the cup, in coffee bars (109).

Starbucks's aggressive real estate stratagem allows it to accumulate prime properties and "cluster" its stores. By locating two or more outlets near one another, the company can attract spillover from its own stores during busy hours. The method also serves to neutralize competitors by giving customers more chances to bump into a Starbucks (Simons 44). But the tactic may be back firing, as the company faces a formidable new competitor in many markets: itself (44).

Fifty percent of the adult population drinks a cup of coffee or more of coffee every day (Reese 200).

Starbucks is well aware of its image problems and it working to counter some of the hostility (44). Starbucks has not tabled a wage offer to date (1). On October 1, 1995 when the government raised the minimum wage to $7.00 per hour Starbucks did two things: Reduced the $7.50 starting wage to a minimum of $7.00 per hour; wiped out the automatic raise of $.25 cents to a starting wage and introduced a through and comprehensive performance review in which workers are graded and scrape by with minimal wage increases usually between $.41 to $.21 cents per hour (1). Starbucks' coffee prices have continued to rise since October 1, 1995 but their labor costs have gone down (2).

On his return to Seattle, however, his bosses argued that Starbucks was a retailer, not a restaurant, or a bar. Schultz felt torn between loyalty to Starbucks and confidence in his vision for coffee bars. In the end he followed his vision.

Starbucks now has more than 1500 stores and 25,000 employees. Unlike other retailers, they provide stock options and full health benefits, for even part-time employees (111).

Creating the perfect cup of coffee is stressed and has been vital for the company's success. "Brewing the Perfect Cup" is one of the 5 classes that all partners must complete during their first six weeks with the company. (Reese 192). The milk must be steamed to at least 150 degrees but never more than 170 degrees. Every espresso shot must be pulled within 23 seconds or tossed (192). All the drink making technicalities are dispensed within "Retail Skills", an eight hour marathon of lectures, demonstrations and hands on practice. They demonstrate how to wipe oil from the coffee bin, open a giant bag of beans, and clean the milk wand o

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Approximate Word count = 1897
Approximate Pages = 8 (250 words per page double spaced)