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Howard Schultz: Entrepreneurship

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by Mashton32
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Howard Schultz: Entrepreneurship

Howard SchultzStarbucksMission Statement: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

Top Three Competitors of Starbucks:1. McDonalds- Starbucks went through the slump where Schultz was no longer CEO, and Starbucks actually lost in a blind taste test to McDonalds.2. Costa coffee- is the second largest coffee chain behind Starbucks and the largest coffee chain in the United Kingdom.3. Coca-Cola- Mark C. discovers how the brand now uses web-based channels to engage with customers and employees. Starbucks has overtaken Coca-Cola as the most popular brand on Facebook with more than 10 million fans on the social media site.Other big competitors include:1. Yum! Brands Inc.2. Krispy Kreme 3. Jamba Inc.4. Dunkin' Brands 5. Chipotle6. Crumbs Bake Shop

Risks:1. When he discovered Starbucks, he moved his life to seatle.2. Incorporated new ideas that he'd found in Italy3. He left Starbucks , started his own company from the ground up, became successfull, and went back to buy out Starbucks. 4. In 2007, Schultz stepped down as CEO and became chairman of the board.5. Recently, in 2013, Starbucks bought it;s very own coffee farm in Costa Rica. They are experimenting with different and new kinds of coffee plants and flavors.

History of Howard:SynopsisBorn in Brooklyn, New York, on July 19, 1953, Howard Schultz graduated from Northern Michigan University with a bachelor's degree in communications before becoming director of retail operations and marketing for the Starbucks Coffee Company in 1982. After founding the coffee company Il Giornale in 1987, he purchased Starbucks and became CEO and chairman of the company. In 2000, Schultz publicly announced that he was resigning as Starbucks's CEO. Eight years later, however, he returned to head the company. In 2014, Starbucks had more than 21,000 stores worldwide and a market cap of $60 billion.Early Life and CareerHoward D. Schultz was born in Brooklyn, New York, on July 19, 1953, and moved with his family to the Bayview Housing projects in Canarsie, a neighborhood in southeastern Brooklyn, when he was 3 years old. Schultz was a natural athlete, leading the basketball courts around his home and the football field at school. He made his escape from Canarsie with a football scholarship to Northern Michigan University in 1970.After graduating from the university with a Bachelor of Science degree in communication in 1975, Schultz found work as an appliance salesman for Hammarplast, a company that sold European coffee makers in the United States. Rising through the ranks to become director of sales, in the early 1980s, Schultz noticed that he was selling more coffee makers to a small operation in Seattle, Washington, known then as the Starbucks Coffee Tea and Spice Company, than to Macy's. Every month, every quarter, these numbers were going up, even though Starbucks just had a few stores. Schultz later remembered. And I said, I gotta go up to Seattle. Howard Schultz still distinctly remembers the first time he walked into the original Starbucks in 1981. At that time, Starbucks had only been around for 10 years and didn't exist outside Seattle. The company's original owners, old college buddies Jerry Baldwin and Gordon Bowker and their neighbor, Zev Siegl, had founded Starbucks in 1971. The three friends also came up with the coffee company's ubiquitous mermaid logo. When I walked in this store for the first time- I know this sounds really hokey- I knew I was home. Schultz later remembered, ''I can't explain it. But I knew I was in a special place, and the product kind of spoke to me.'' At that time, he added, ''I had never had a good cup of coffee. I met the founders of the company, and really heard for the first time the story of great coffee... I just said, ''God, this is something I've been looking for my whole professional life.''' Little did Schultz know then how fortuitous his introduction to the company would truly be, or that he would have an integral part in creating the modern Starbucks.Birth of the Modern StarbucksA year after meeting with Starbucks' founders, in 1982, Howard Schultz was hired as director of retail operations and marketing for the growing coffee company, which, at the time, only sold coffee beans, not coffee drinks. ''My impression of Howard at that time was that he was a fabulous communicator,'' co-founder Zev Siegl later remembered. ''One to one, he still is.''Early on, Schultz set about making his mark on the company while making Starbucks' mission his own. In 1983, while traveling in Milan, Italy, he was struck by the number of coffee bars he encountered. An idea then occurred to him: Starbucks should sell not just coffee beans but coffee drinks. ''I saw something. Not only the romance of coffee, but ... a sense of community. And the connection that people had to coffee- the place and one another,'' Schultz recalled. ''And after a week in Italy, I was so convinced with such unbridled enthusiasm that I couldn't wait to get back to Seattle to talk about the fact that I had seen the future.''Schultz's enthusiasm for opening coffee bars in Starbucks stores, however, wasn't shared by the company's creators. ''We said, 'Oh no, that's not for us,''' Siegl remembered. ''Throughout the '70s, we served coffee in our store. We even, at one point, had a nice, big espresso machine behind the counter. But we were in the bean business.'' Nevertheless, Schultz was persistent until, finally, the owners let him establish a coffee bar in a new store that was opening in Seattle. It was an instant success, bringing in hundreds of people per day and introducing a whole new language- the language of the coffeehouse- to Seattle in 1984.But the success of the coffee bar demonstrated to the original founders that they didn't want to go in the direction Schultz wanted to take them. They didn't want to get big. Disappointed, Schultz left Starbucks in 1985 to open a coffee bar chain of his own, Il Giornale, which quickly garnered success.The venture was a hit. Schultz wanted to open more shops, but didn't have the funding he needed to expand. In a quirky twist of fate, a year later he learned that Baldwin and Bowker wished to sell their outlets, so after rounding up investors from the Seattle area, Schultz purchased the original Starbucks chain for $3.8 million and merged the stores with his own. When Schultz purchased Starbucks, he merged Il Giornale with the Seattle company. Subsequently, he became CEO and chairman of Starbucks (known thereafter as the Starbucks Coffee Company). Once in charge, Schultz set out to completely overhaul Starbucks according to his vision. In addition to the $1-per-cup ''basic'' brew, he expanded Starbucks' offerings to include more exotic coffee beverages such as espresso, cappuccino, café latte, iced coffee and café mocha. He also sought to create a more appealing atmosphere for his customers-the proverbial ''clean, well-lighted place'' where they could relax and enjoy their coffee in comfort.But the most radical change Schultz made was to improve the way his company dealt with its employees. Convinced that friendly, efficient service would boost sales, he instituted a training program designed to groom knowledgeable employees who would enjoy working behind a counter, an occupation considered by many to be menial labor. ''Service is a lost art in America.it's not viewed as a professional job to work behind a counter,'' Schultz says. ''We don't believe that. We want to provide our people with dignity and self-esteem, so we offer tangible benefits.'' Among the benefits Schultz offers is complete health-care coverage to both full- and part-time employees, as well as stock options, practices that are virtually unheard of in corporate America. As a result of Schultz's vision, Starbucks experienced unprecedented growth throughout the 1990s, blossoming from 425 stores in 1994 to more than 2,200 stores in 1998. And the company was on target to break the $2 billion in the year 2000.With annual sales topping $1.7 billion in 1999, Starbucks Corp. reigned as the nation's No. 1 specialty coffee retailer. Quite an impressive achievement for a blue-collar kid from the projects. But despite Starbucks' phenomenal success, what Howard Schultz seems most proud of is not how much he has earned, but the kind of company he has created. ''My dad was a blue-collar worker,'' Schultz explains in an Inc. magazine interview. ''He didn't have health insurance or benefits, and I saw firsthand the debilitating effect that had on him and on our family. I decided if I was ever in the position to make a contribution to others in that way, I would. My greatest success has been that I got to build the kind of company my father never got to work for.''In 2000, Schultz publicly announced that he was resigning as Starbucks' CEO. Eight years later, however, he returned to head the company. In a 2009 interview with CBS, Schultz said of Starbucks' mission, ''We're not in the business of filling bellies; we're in the business of filling souls.''Continued SuccessIn 2006, Howard Schultz was ranked No. 359 on Forbes magazine's ''Forbes 400'' list, which presents the 400 richest individuals in the United States. In 2013, he was ranked No. 311 on the same list, as well as No. 931 on Forbes's list of billionaires around the globe.Today, no one company sells more coffee drinks to more people in more places than Starbucks. By 2012, Starbucks had grown to encompass more than 17,600 stores in 39 countries around the world, and its market capitalization was valued at $35.6 billion. By 2014, Starbucks had more than 21,000 stores worldwide and a market cap of $60 billion. The incredibly popular coffee company reportedly opens two or three new stores every day and attracts around 60 million customers per week. According to the company's website, Starbucks has been ''committed to ethically sourcing and roasting the highest-quality arabica coffee in the world'' since 1971.Howard Schultz currently resides in Seattle, Washington, with his wife, Sheri (Kersch) Schultz, and two children, Jordan and Addison.

Factors of Production1. Land- Naturally, Starbucks sources arabica coffee from three key growing regions, Latin America, Africa, and Asia-Pacific, a spokesperson for the coffee empire confirms, but their signature coffee blends are mostly from the Asia-Pacific region.African coffees offer flavor notes that range from berries to exotic spies to citrus fruits, and aromas that offer hints of lemon, grapefruit, flowers, and chocolate. Some of the world's most unusual and sought-after coffees come from this region, the Starbucks spokesperson says. Think: flavors of wine.And the Asia-Pacific region is home to coffees that range from assertive herbal spiciness and depth typical of semi-washed coffees from Indonesia to the balanced acidity and complexity that define the washed coffees of the Pacific Islands. Because of their full-flavor and character, the Asia-Pacific beans are found in many of Starbucks signature coffee blends.2. Labor- As of right now about 180,000 full time workers are employed at starbucks. Starbucks is operating in 64 different countries, and it has 21,536 stores worldwide. 3. Capital- He used capital by selling stok. Starbucks' stock is currently selling at $54.75 (picture: bottem right corner)

Bumps in the Road:As you've already read Schultz ideas were not accepted by his fellow Starbucks associates- I believe this was a big bump in the road, but he overcame it by doin what he felt was right and what he thought would make more money.An earlier bump in the road would be his home life. Howard grew up in a project housing in a not so great part of town, but he didn't let that affect him- he kept his grades up, excelled at sports, and was the first person in his family to attend college.

Change in the Market:Howard changed the market by not playing it safe and sticking to selling coffee beans, but by starting in house brewing. Howard also had a different approach towards hiring/training workers. He instituted a training program designed to groom knowledgable employees who enjoyed working behind a counter. All said I think he employed new, and effective strategies in the marketing and selling of coffee as well as revolutionizing a pre-existing idea and product.

My favorite fact that I learned was that Starbucks was actually founded by Jerry Baldwin, Zez Siegel, and Gordan Bowker, not by Howard Schultz.

Entrepreneur Strategy:If I was an entrepreneur starting out my business I would use the same ideas in training my employees. I feel like if the employees love working, then the customers will love the servic and sales will go up.

The Production:What- Starbuck's produces coffee, tea, juice, milkshakes, ice creams, ice drinks, hot/cold sandwiches, pastries, cakes. muffins, salads, yogurts, gift cards, books, , mugs, music, movies, ect.How- They buy coffee beans from around the world. Primarily in the Asia-Pacific Region and Latin America. When Starbucks Coffee Tea and Spices was just starting up (which was before Schultz bought it) the owners bought coffee beans from Peets. For Whom- General Public

Works cited:http://spiderbook.com/starbucks-competitors.htmlhttps://en.wikipedia.org/wiki/Costa_Coffeehttp://www.biography.com/people/howard-schultz-21166227#synopsisHoward Schultz: A Profile in Failure | Jeff Stibel | LinkedInAdvice from Starbucks Founder Howard Schultz | AllBusiness.comHow Starbucks Constantly Reinvents Itself | Inc.comthe first coffee bar in america - Google SearchCoffeehouse - Wikipedia, the free encyclopediahttp://www.shape.com/blogs/fit-foodies/do-you-know-where-your-coffee-beans-comehttp://www.statisticbrain.com/starbucks-company-statistics/


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