Starbucks began as a small company who provided coffee to fine restaurants and espresso bars. It has since, over the last twenty-one years, become the largest retail coffee company in the world. Starbucks has seen its company grow from having a mere 17 stores in 1987 to having currently 5, 688 locations globally. This amazing expansion can be attributed to Howard Schultz, who bought the Starbucks name fifteen years ago.

A large reason Starbucks has done so well for almost two decades can be attributed to changes of the coffee image among consumers. The recent popularity of specialty coffee is due to four new consumer trends: 1) the adoption of a healthier lifestyle, which led people to replace alcohol with coffee; 2) coffee bars had become a place where people could meet, and talk; 3) people developed a liking of affordable luxuries, and specialty coffee became the beverage to drink; and 4) consumers had become more aware about coffee, as its popularity quickly spread throughout North America. From 1990-1998 retail sales of specialty coffee has seen an increase of 18.5%. Because of coffee's newfound popularity, Starbucks quickly began to take advantage of new ventures. I

4) Develop enthusiastically satisfied customers all of the time.

6) Recognize that profitability is essential to our future success.

By looking at the strengths, weaknesses, opportunities and threats of this type of industry, this type of business strategy is very effective. By creating a type of work atmosphere with employees wanting the company to succeed, and rewarding the for it, Starbucks has achieved more in the last ten years than most businesses could ever dream of. They are an ever-growing company, but somehow manage to limit their growth as to not spread themselves to thin, and run the risk of over-branding their product. The new ventures they are taking on are both of related substance, and should be pursued aggressively.

Starbucks Internal Strengths and Weaknesses

t has pursued such projects as a direct mail program, which helped increase sales and transaction sizes, as well as introduce its customers with a wider range of products. The company has also tapped into the international market in a big way, and has found that to be quite successful as well. Currently it is pursuing ventures in the ice cream market, the bottled iced coffee beverages market, and perhaps the biggest one, the grocery market.

Currently, a key concern is the marketing of the company's brand equity. Starbucks is unsure as to how to market its products and what direction to take in order to continue its dominance in the coffee industry. A possible reason for this is the company's inability to concretely define its brand image.

Starbucks in addition has to be aware of some possible threats that may arise. Weather is always a factor in any type of farming industry. In some situations, it can put companies out of business. For example, in 1975 the Brazilian frost drove the price of coffee up, and U.S. coffee consumption declined 18.5 percent. There are also a number of other environmental factors that need to be taken into account. These can include health of the coffee trees, harvesting practices, disease and infection caused by insects, and the social, political, regulatory and economic environments of the coffee-producing countries.

The Starbucks' formula is decisively based in its coffee, its employees, its merchandising, its ownership values, its real-estate approach, its image, and its innovativeness.

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