Starbucks Coffee Company, established in 1971 by Gordon Bowker, Jerry Baldwin, and Zev Siegel in Seattle, Washington, emerged as the leading specialty coffee retailer globally by 2006. With over 11,000 stores and more than 10,000 employees across 36 countries, Starbucks had a significant presence in its primary market of the United States alone with over 7,000 retail locations.
Initially, their store had a diverse range of 30 whole-bean coffee options, bulk tea, spices, and other supplies. Over the course of a decade, the store underwent expansion and employed a workforce of 85 individuals across five retail stores. The logo featuring a mermaid gained widespread recognition and respect. Despite not offering coffee by the cup initially, Howard Schultz was greatly influenced by his visit to Italy and his personal connection with coffee. In an effort to convince Starbucks to change this policy, he proposed his idea but it was ultimately rejected. Consequently, Schultz established his own coffee shops in 1985. By 1987, each store’s annual sales amounted to approximately $500,000.
In 1987, Starbucks was purchased by Howard Schultz and began implementing a store-opening process that involved opening new stores every six months. By 1996, they had opened a total of 330 outlets. In addition to this domestic expansion, Starbucks also expanded globally through various alliances. To enter international markets, such as Asia, they utilized joint ventures, licenses, and company-owned operations. The primary focus for expanding into Asia was due to its stage of development. After successfully establishing themselves in Japan and China as major markets, Starbucks had intentions to enter the Indian market.
In 2002 and 2003, Starbucks announced their plan but could not execute it. India was ranked as the fourth-largest economy globally in 2006 based on purchasing power parity, which made it a sought-after location for BPO companies. However, India faced obstacles such as insufficient infrastructure, bureaucratic procedures, restrictions on foreign investment and controls, limitations on essential products for small-scale industries, and significant fiscal deficits that hindered its economic progress. Furthermore, the Indian retail market was valued at US$350 billion in 2006. Additionally, there were diverse food preferences across different regions of India.
According to research, urban areas account for 71% of coffee consumption. Although India has a tea culture, there is a growing coffee culture among young adults. Starbucks had expressed intentions to enter the Indian market in 2006, but they have not yet done so.
Starbucks is committed to implementing water and energy conservation strategies, using eco-friendly building materials and construction methods. This dedication is evident in the construction of all their new stores, which are built to meet the Certification Standards of LEED, a globally recognized green building program. Furthermore, Starbucks continuously seeks out new sustainable practices to further enhance their business operations.
