1. Starbucks
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This article is about the coffeehouse chain. For other uses, see Starbuck.
Starbucks Corporation
Type Public
Traded as NASDAQ: SBUX
NASDAQ-100 Component
S&P 500 Component
Industry Restaurants
Genre Coffee house
Founded Pike Place Market in Seattle, Washington (March
30, 1971)
Founder(s) Jerry Baldwin
Gordon Bowker
Zev Siegl
Headquarters Seattle, Washington, U.S.
Number of 20,366 in 61 countries(November 16, 2012)[1]
locations

2. Area served Worldwide
Key people Howard Schultz
(Chairman, President and CEO)
Products Whole bean coffee
Boxed tea
Made-to-order beverages
Bottled beverages
Baked goods
Merchandise
Frappuccino beverages
Smoothies
Services Coffee
Revenue US$ 13.29 billion (2012)[2]
Operating income US$ 1.99 billion (2012)[2]
Net income US$ 1.38 billion (2012)[2]
Total assets US$ 8.21 billion (2012)[2]
Total equity US$ 5.10 billion (2012)[2]
Employees 149,000 (2011)[2]
Subsidiaries Starbucks Coffee Company
Tazo Tea Company
Seattle's Best Coffee
Torrefazione Italia
Hear Music
Ethos Water

3. Evolution Fresh
Website www.starbucks.com
Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle,
Washington. Starbucks is the largest coffeehouse company in the world, with 20,366 stores in 61 countries,
including 13,123 in the United States, 1,299 in Canada, 977 in Japan, 793 in the United Kingdom, 732 in China,
473 in South Korea, 363 in Mexico, 282 in Taiwan, 204 in the Philippines, and 164 in Thailand. [1]
Starbucks sells hot and cold drinks, coffee beans, salads, hot and cold sandwiches, sweet pastries, snacks,
and items such as mugs and tumblers. Through the Starbucks Entertainment division and Hear Music brand,
the company also markets books, music, and film. Many of the company's products are seasonal or specific to
the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores.
From Starbucks' founding in 1971 in Seattle as a local coffee bean roaster and retailer, the company has
expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into
the 2000s. The first store outside the United States or Canada opened in the mid-1990s, and overseas stores
now constitute almost one third of Starbucks' stores.[3] The company planned to open a net of 900 new stores
outside of the United States in 2009,[4] but has announced 300 store closures in the United States since 2008.[5]
Contents
[hide]
1 History
2 Corporate governance
3 Products
o 3.1 Tea
o 3.2 Coffee quality
4 Locations
o 4.1 Current
o 4.2 Former
o 4.3 Unbranded stores
o 4.4 Automated locations
o 4.5 Facilities
5 Advertising
o 5.1 Logo

4. o 5.2 Partnerships
6 Parodies and infringements
7 Intellectual property
o 7.1 Environmental impact
 7.1.1 Recycling
o 7.2 Fair trade
o 7.3 Ethos water
8 Controversy
o 8.1 Market strategy
o 8.2 Labor disputes
o 8.3 Opening without planning permission
o 8.4 Hoax letter
o 8.5 "The Way I See It"
o 8.6 US military viral email
o 8.7 Gun controversy
o 8.8 Same-sex marriage
o 8.9 European tax avoidance
9 Music, film, and television
10 Parent company relationships
11 See also
12 References
13 Further reading
14 External links
[edit]History
Interior of the Pike Place Market location in 1977.

5. The Starbucks store at 1912 Pike Place. This is the second location of the original Starbucks, which was at 2000 Western
Avenue from 1971 to 1976.
The first Starbucks opened in Seattle, Washington, on March 30, 1971 by three partners: English teacher Jerry
Baldwin, history teacherZevSiegl, and writer Gordon Bowker. The three were inspired by coffee roasting
entrepreneur Alfred Peet, whom they knew personally, to sell high-quality coffee beans and
equipment.[6] Originally the company was to be called Pequod after a whaling boat from Moby-Dick but this
name was rejected by some of the co-founders. The company was instead named after the chief mate on
the Pequod, Starbuck.[7]
From 1971–1976, the first Starbucks was at 2000 Western Avenue; it then was relocated to 1912 Pike
Place.[8] The company only sold roasted coffee and did not yet brew coffee to sell.[9] During their first year of
operation, they purchased green coffee beans from Peet's, then began buying directly from growers.
The Starbucks Center, Seattle.The company HQ, in the oldSears, Roebuck and Co.catalog distribution center building
In 1984, the original owners of Starbucks, led by Jerry Baldwin, took the opportunity to purchase Peet's.[citation
needed]
During the 1980s total sales of coffee in the USA were falling, but sales of specialty coffee increased,
forming 10% of the market in 1989, compared to 3% in 1983.[10] By 1986 the company had 6 stores in
Seattle[10] and had only just begun to sell espresso coffee.[11] Howard Schultz In 1987, the original owners sold

6. the Starbucks chain to Schultz who rebranded some of his own Il Giornale coffee outlets as Starbucks' and
quickly began to expand. In the same year, Starbucks opened its first locations outside Seattle at Waterfront
Station in Vancouver,British Columbia, and Chicago, Illinois.[12] By 1989 there were 46 stores across the
Northwest and Midwest in 1989 and Starbucks was roasting over 2,000,000 pounds (910,000 kg) of coffee a
year.[10] At the time of its initial public offering on the stock market in June 1992, Starbucks had grown to 140
outlets and had a revenue of $73.5m, up from $1.3m in 1987. It's market value was $271m. The 12% portion of
the company sold raised the company around $25m which would help it double the number of stores over the
next two years.[13] By September 1992, the share price had risen 70% to over 100 times the earnings per
share of the previous year.[9]
The first Starbucks location outside North America opened in Tokyo, Japan, in 1996.[14] Starbucks entered the
U.K. market in 1998 with the $83 million[15] acquisition of the then 60-outlet, UK-based Seattle Coffee
Company, re-branding all the stores as Starbucks. In September 2002, Starbucks opened its first store in Latin
America, at Mexico City.
In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called
Circadia.[16] These restaurants were soon "outed" as Starbucks establishments and converted to Starbucks
cafes.
In October 2002, Starbucks established a coffee trading company in Lausanne, Switzerland to handle
purchases of green coffee. All other coffee-related business continued to be managed from Seattle.[17]
In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC
Enterprises for $72m. The deal only gained 150 stores for Starbucks, but according to the Seattle Post-
Intelligencer the wholesale business was more significant.[18] In September 2006, rival Diedrich
Coffee announced that it would sell most of its company-owned retail stores to Starbucks. This sale includes
the company-owned locations of the Oregon-based Coffee People chain. Starbucks converted the Diedrich
Coffee and Coffee People locations to Starbucks, although the Portland airport Coffee People locations were
excluded from the sale.[19]
In August 2003, Starbucks opened its first store in South America in Lima, Peru.[20]
In 2007, the company opened its first store in Russia, ten years after first registering a trademark there.[21]
In March 2008 they purchased the manufacturer of the Clover Brewing System. They began testing the "fresh-
pressed" coffee system at several Starbucks locations in Seattle, California, New York and Boston.[22]

7. Graph showing the growth in the number of Starbucks stores between 1971 and 2011. [12]
In early 2008, Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and
feedback from customers. Other users comment and vote on suggestions. Journalist Jack Schofield noted that
"My Starbucks seems to be all sweetness and light at the moment, which I don't think is possible without quite
a lot of censorship". The website is powered by the Salesforce software.[23]
In May 2008, a loyalty program was introduced for registered users of the Starbucks Card (previously simply a
gift card) offering perks such as free Wi-Fi Internet access, no charge for soy milk & flavored syrups, and free
refills on brewed drip coffee.[24]
A store in Seattle known for its use of the corporation's new ideas reopened in the fall 2010 with a modified
interior design in which the espresso machines were placed in the middle of the store.[25]
On November 14, 2012, Starbucks announced it will purchase Teavana for $620 million dollars in cash.[26]
Corporate governance
Howard Schultz, CEO of Starbucks
Orin C. Smith was President and CEO of Starbucks from 2001 to 2005.

8. Starbucks' chairman, Howard Schultz, has talked about making sure growth does not dilute the company's
culture[27] and the common goal of the company's leadership to act like a small company.
In January 2008, Schultz resumed his roles as President and CEO after an eight-year hiatus, replacing Jim
Donald, who took the posts in 2005 but was asked to step down after sales slowed in 2007. Schultz aims to
restore what he calls the "distinctive Starbucks experience" in the face of rapid expansion. Analysts believe that
Schultz must determine how to contend with higher materials prices and enhanced competition from lower-
price fast food chains, including McDonald's and Dunkin' Donuts. Starbucks announced it will discontinue its
warm breakfast sandwich products, originally intended to launch nationwide in 2008, in order to refocus the
brand on coffee, but the sandwiches were reformulated to deal with complaints and the product line
stayed.[28] On February 23, 2008, Starbucks closed its stores from 5:30–9:00 pm local time to train its
baristas.[29][30]
Products
A typical sales area, this one inPeterborough, UK, showing a display of food and the beverage preparation area
Starbucks stopped using milk originating from rBGH-treated cows in 2007.[31]
In June 2009, the company announced that it will be overhauling its menu and selling salads and baked goods
without high-fructose corn syrup or artificial ingredients.[32] This move was expected to attract health- and cost-
conscious consumers and will not affect prices.[32]
Starbucks introduced a brand new line of instant coffee packets called VIA "Ready Brew", in March 2009. It
was first unveiled in New York City with subsequent testing of the product also in Seattle, Chicago and London.
The first two VIA flavors include Italian Roast and Colombia, which were then rolled out in October 2009,
across the U.S. and Canada with Starbucks stores promoting the product with a blind "taste challenge" of the
instant versus fresh roast. Many people could not tell the difference between the instant and fresh brewed
coffee. Some analysts theorized that by introducing instant coffee, Starbucks would devalue its own brand. [33]

9. Starbucks began selling beer and wine at at some US stores in 2010. As of April 2012 it is available at seven
locations and others have applied for licences.[34]
In 2011, Starbucks introduced its largest cup size, the Trenta, which can hold 31 ounces.[35] In September
2012, Starbucks announced the Verismo, a consumer-grade single serve coffee machine that uses sealed
plastic cups of coffee grounds, and a "milk pod" for lattes.[36]
On November 10, 2011, Starbucks Corporation announced that it had bought juice company Evolution Fresh
for $30 million in cash and plans to start a chain of juice bars starting in around middle of 2012, venturing into
territory staked out by Jamba Inc. Its first store released in San Bernadino, California and plans for a Store in
San Francisco will be launched in Early 2013.[37]
In 2012, Starbucks began selling a line of iced refresher beverages in its stores which contain an extract
from green arabica coffee beans. The beverages are fruit flavored and contain caffeine but, according to the
company, "with none of the coffee flavor". Starbucks' green coffee extraction process involves soaking the
beans in water.[38]
Name Measurement Notes
Demi 3 US fl oz (89 mL) Smallest size. Espresso shots.
Short 8 US fl oz (240 mL) Smaller of the two original sizes
Tall 12 US fl oz (350 mL) Larger of the two original sizes
Grande 16 US fl oz (470 mL) Italian/Spanish/Portuguese/French for "large"
Venti 20 US fl oz (590 mL), 26 US fl oz (770 mL) Italian for "twenty"
Trenta 30 US fl oz (890 mL) Italian for "thirty"
Tea
Starbucks entered the tea business in 1999 when it acquired the Tazo brand for US$8.1 million.[39][40] In late
2012 Starbucks stated it will be paying US$620 million in cash to buyTeavana[41] As of November 2012, there is

10. no intention of marketing Starbucks' products in Teavana stores, though the acquisition will allow the expansion
of Teavana beyond its current main footprint in shopping malls.[40]
Coffee quality
Kevin Knox who was in charge of coffee quality at Starbucks from 1987 to 1993 recalled on his blog in 2010
how George Howell, coffee veteran and founder of the Cup of Excellence, had been appalled at the dark
roasted beans that Starbucks was selling in 1990.[22][42] Talking to the New York Times in 2008, Howell stated
that the dark roast used by Starbucks does not deepen the flavor of coffee, but instead can destroy nuances of
flavor.[22] The March 2007 issue of Consumer Reports compared American fast-food chain coffees and ranked
Starbucks behind McDonald's Premium Roast. The magazine called Starbucks coffee "strong, but burnt and
bitter enough to make your eyes water instead of open".[43]
Locations
Current
[1]
As of November 16, 2012, Starbucks is present in 61 countries.
Central
Transcontine Africa North America America & South Oceania Asia Europe
Caribbean America
ntal (Europe
and Asia)
Turkey Egypt Aruba Argent Argent Austr Bahrain Austria
Russia Morocco Curaçao ina ina alia China Belgium
El Brazil Brazil New Hong Bulgaria
Salvador Chile Chile Zeala Kong Cyprus
Guatemala Peru Peru nd Indone Czech
Costa Rica sia Republic
Puerto India Denmar
Rico Sri k
The Lanka Finland
Bahamas Japan France
Jordan German
Kuwait y
Lebano Greece
n Hungary
Macau Ireland

11. Malaysi Netherla
a nds
Oman Norway
Philippi Poland
nes Portugal
Qatar Romani
Saudi a
Arabia Spain
Singap Sweden
ore Switzerl
South and
Korea United
Taiwan Kingdom
Thailan
d
United
Arab
Emirate
s
In 2008, Starbucks continued its expansion, settling in Argentina, Belgium, Brazil, Bulgaria, the Czech
[12]
Republic and Portugal.
[44]
European and Scandinavian expansion continued in 2009 with Poland (April), Utrecht, Netherlands
[45]
(August), and Sweden at Arlanda airport outside Stockholm (October).
In 2010, the growth in new markets continued. In May 2010, Southern Sun Hotels South Africa
announced that they had signed an agreement with Starbucks that would enable them to brew Starbucks
coffees in select Southern Sun and Tsonga Sun hotels in South Africa. The agreement was partially
reached in order for Starbucks coffees to be served in the country in time for the commencement of the
[46]
2010 FIFA World Cup hosted by South Africa. In June 2010, Starbucks opened its first store
in Budapest, Hungary and in November the company opened the first Central American store in El
[47]
Salvador's capital, San Salvador.
In December 2010, Starbucks debuted their first ever Starbucks at sea, where with a partnership
with Royal Caribbean International; Starbucks opened a shop aboard their Allure of the Seas Royal
[48]
Caribbean's second largest ship, and also the second largest ship in the world.
[when?]
Starbucks is planning to open its third African location, after Egypt and Morocco, in Algeria. A
partnership with Algerian food company Cevital will see Starbucks open its first Algerian store
[49]
in Algiers.
In January 2011, Starbucks and Tata Coffee, Asia's largest coffee plantation company, announced plans
for a strategic alliance to bring Starbucks to India and also to source and roast coffee beans at Tata
[50] [51]
Coffee's Kodagu facility. Despite a false start in 2007, in January 2012 Starbucks finally announced

12. a 50/50 joint venture with Tata Global Beverages Limited which will own and operate as Starbucks Coffee
[52]
"A Tata Alliance. Starbucks had previously attempted to enter the Indian market, in 2007, with a joint
venture involving its Indonesian franchise and Kishore Biyani of the Future Group. However, the joint
venture withdrew its foreign investment proposal with the Indian government. Starbucks did not cite any
[53]
reason for the withdrawal. Starbucks opened its first store in India in Mumbai on 19 October
[54][55][56]
2012.
In February 2011, Starbucks started selling their coffee in Norway, the first Norwegian shop opened
February 8, 2012 at Oslo lufthavn, Gardermoen. Instead they supply Norwegian food shops with
Starbucks. In October 2011, Starbucks opened another location in Beijing, China, at the Beijing Capital
International Airport's Terminal 3, international departures hall; making the company's 500th store in
China. The store is the 7th location at the airport. The company plans to expand to 1,500 stores in China
[57]
by 2015. In May 2012, Starbucks opened its first coffeehouse in Finland, with the location
[58]
being Helsinki-Vantaa airport in Vantaa.
Many bookstores have Starbucks licensed stores within them, including Barnes & Noble in the United
States, Chapters-Indigo in Canada (company operated), Jarir Bookstores in Saudi
[citation needed]
Arabia, LivrariaSaraiva, Fnac in Brazil and B2S in Thailand. In October 2012, Starbucks
[59]
announced plans to open 1,000 stores in the United States in the next five years. The same month, the
[60]
largest Starbucks in the US opened at the University of Alabama's Ferguson Center.
Starbucks at West Coast Plaza, Singapore
Starbucks in İzmir, Turkey
One Starbucks location in Hong Kong uses a retroBingSutt design

13. Starbucks in Angeles City, Philippines
Starbucks in Lima, Peru
Starbucks in San Salvador, El Salvador
Starbucks in Beirut

14. Starbucks in old Orange Daily News building
[edit]Former
In 2003, Starbucks closed all six of its locations in Israel, citing "on-going operational challenges" and a
[61][62]
"difficult business environment."
The Starbucks location in the former imperial palace in Beijing closed in July 2007. The coffee shop had
been a source of ongoing controversy since its opening in 2000 with protesters objecting that the
[63][64]
presence of the American chain in this location "was trampling on Chinese culture."
In July 2008, the company announced it was closing 600 underperforming company-owned stores and
[65][66]
cutting U.S. expansion plans amid growing economic uncertainty. On July 29, 2008, Starbucks also
cut almost 1,000 non-retail jobs as part of its bid to re-energize the brand and boost its profit. Of the new
[67]
cuts, 550 of the positions were layoffs and the rest were unfilled jobs. These closings and layoffs
effectively ended the company's period of growth and expansion that began in the mid-1990s.
Starbucks also announced in July 2008 that it would close 61 of its 84 stores in Australia in the following
[68]
month. Nick Wailes, an expert in strategic management of theUniversity of Sydney, commented that
[69]
"Starbucks failed to truly understand Australia's cafe culture."
In January 2009, Starbucks announced the closure of an additional 300 under-performing stores and the
elimination of 7,000 positions. CEO Howard Schultz also announced that he had received board approval
[70]
to reduce his salary. Altogether, from February 2008 to January 2009, Starbucks terminated an
[71]
estimated 18,400 U.S. jobs and began closing 977 stores worldwide.
In August 2009, Ahold announced closures and rebranding for 43 of their licensed store Starbucks kiosks
for their US based Stop & Shop and Giant supermarkets. However, Ahold has not yet abandoned the
[72][73]
licensed Starbucks concept; they plan to open 5 new licensed stores by the end of 2009.
In July 2012, the company announced that they may begin closing unprofitable European stores
[74]
immediately.
[edit]Unbranded stores
In 2009, at least three stores in Seattle were debranded to remove the logo and brand name, and
[75][76]
remodel the stores as local coffee houses "inspired by Starbucks." CEO Howard Schultz says the
[77]
unbranded stores are a "laboratory for Starbucks". The first, 15th Avenue Coffee and Tea, opened in
July 2009 on Capitol Hill. It serves wine and beer, and plans to host live music and poetry
[78] [75][79]
readings. Although the stores have been called "stealth Starbucks" and criticized as "local-
[80]
washing", Schultz says that "It wasn't so much that we were trying to hide the brand, but trying to do
[77]
things in those stores that we did not feel were appropriate for Starbucks."
[edit]Automated locations
Starbucks has automated systems in some areas. These machines have 280 possible drink combinations
to choose from. They have touchscreens and customers get to play a game while they wait for their
[81]
order.
[edit]Facilities
Free Wi-Fi Internet access varies in different regions. US & Canadian card holders can access 2 hours of
Internet access through AT&T Inc. in the United States and through Bell Canada within Canada. In

15. Germany customers can get 2-hours of free Wi-Fi through BT Openzone, and in Switzerland and Austria
customers can get 30 minutes with a voucher card (through T-Mobile).
In September 2009, Starbucks in the UK rolled out free Wi-Fi at most of its outlets. Customers with a
Starbucks Card are able to log-on to the Wi-Fi in-store for free with their card details, thereby bringing the
[82]
benefits of the loyalty program in-line with the United States. Beginning in July 2010, Starbucks plans
to offer free Wi-Fi in all of its US stores via AT&T and information through a partnership with Yahoo!. This
is an effort to be more competitive against local chains, which have long offered free Wi-Fi, and
[83]
against McDonald's, which began offering free wireless internet access in 2010. On June 30, 2010,
Starbucks announced it would begin to offer unlimited and free Internet access via Wi-Fi to customers in
[84]
all company-owned locations across Canada starting on July 1, 2010.
Advertising
Starbucks sign in Naga City, Philippines
Starbucks at Ibn Battuta Mall, Dubai
The store in Insadong, Seoul, South Korea with Hangeul script sign

16. Starbucks Coffee (星巴克咖啡) in Xi'an, China
Starbucks coffee in Nicosia, Cyprus
Logo
In 2006, Valerie O'Neil, a Starbucks spokeswoman, said that the logo is an image of a "twin-tailed
[85]
mermaid, or siren as she's known in Greek mythology". The logo has been significantly streamlined
[86]
over the years. In the first version, which was based on a 16th-century "Norse" woodcut, the Starbucks
[87]
siren was topless and had a fully visible double fish tail. The image also had a rough visual texture and
[88]
has been likened to a melusine. In the second version, which was used from 1987–92, her breasts
were covered by her flowing hair, but her navel was still visible. The fish tail was cropped slightly, and the
primary color was changed from brown to green, a nod to Bowker's Alma Mater, the University of San
[89]
Francisco. In the third version, used between 1992 and 2011, her navel and breasts are not visible at
all, and only vestiges remain of the fish tails. The original "woodcut" logo has been moved to the
Starbucks' Headquarters in Seattle.
At the beginning of September 2006 and then again in early 2008, Starbucks temporarily reintroduced its
original brown logo on paper hot-drink cups. Starbucks has stated that this was done to show the
company's heritage from the Pacific Northwest and to celebrate 35 years of business. The vintage logo
[90]
sparked some controversy due in part to the siren's bare breasts, but the temporary switch garnered
little attention from the media. Starbucks had drawn similar criticism when they reintroduced the vintage
[91]
logo in 2006. The logo was altered when Starbucks entered the Saudi Arabian market in 2000 to
[92]
remove the siren, leaving only her crown, as reported in a Pulitzer Prize-winning column by Colbert I.
King in The Washington Post in 2002. The company announced three months later that it would be using
[93]
the international logo in Saudi Arabia.
In January 2011, Starbucks announced that they would make small changes to the company's logo,
[94]
removing the Starbucks wordmark around the siren, enlarging the siren image, and making it green.

17. Original brown logo, used from 1971–1987.
Green logo used from 1987–2010, still being used as a secondary logo.
Redesigned logo used from 2011–present.
Partnerships
Starbucks has agreed to a partnership with Apple to collaborate on selling music as part of the
"coffeehouse experience". In October 2006, Apple added a Starbucks Entertainment area to the iTunes
Store, selling music similar to that played in Starbucks stores. In September 2007 Apple announced that
customers would be able to browse the iTunes Store at Starbucks via Wi-Fi in the US (with no
requirement to login to the Wi-Fi network), targeted at iPhone, iPod touch, iPad, and MacBook users. The
iTunes Store will automatically detect recent songs playing in a Starbucks and offer users the opportunity
to download the tracks. Some stores feature LCD screens with the artist name, song, and album
information of the current song playing. This feature has been rolled out in Seattle, New York City, and
[95]
the San Francisco Bay Area, and was offered in limited markets during 2007–2008. During the fall of
2007, Starbucks also began to sell digital downloads of certain albums through iTunes. Starbucks gave
away 37 different songs for free download through iTunes as part of the "Song of the Day" promotion in
2007, and a "Pick of the Week" card is now available at Starbucks for a free song download. Since 2011
Starbucks also gives away a "Pick of the Week" card for app downloads from the App Store. A Starbucks
app is available in the iPhone App Store.

18. Starting on June 1, 2009, the MSNBC morning news program Morning Joe has been presented as
"brewed by Starbucks" and the show's logo changed to include the company logo. Although the hosts
have previously consumed Starbucks coffee on air "for free" in the words of MSNBC president Phil Griffin,
[96]
it was not paid placement at that time. The move was met with mixed reactions from rival news
organizations, viewed as both a clever partnership in an economic downturn and a compromise of
[97]
journalistic standards.
Parodies and infringements
Starbucks has been a target of parodies and imitations of its logo, and has used legal action against
those it perceives to be infringing on its intellectual property. In 2000, San Francisco cartoonist Kieron
Dwyer was sued by Starbucks for copyright and trademark infringement after creating a parody of its siren
logo and putting it on the cover of one of his comics; later placing it on coffee mugs, t-shirts, and stickers
that he sold on his website and at comic book conventions. Dwyer felt that since his work was a parody it
was protected by his right to free speech under U.S. law. The case was eventually settled out of court, as
Dwyer claimed he did not have the financial ability to endure a trial case with Starbucks. The judge
agreed that Dwyer's work was a parody and thus enjoyed constitutional protection; however, he was
forbidden from financially "profiting" from using a "confusingly similar" image of the Starbucks siren logo.
Dwyer was allowed to display the image as an expression of free speech, but he can no longer sell
[98]
it. In a similar case, a New York store selling stickers and T-shirts using the Starbucks logo with the
[99][100]
words "f—k off" was sued by the company in 1999. An anti-Starbucks website,
[101]
starbuckscoffee.co.uk, which encouraged people to deface the Starbucks logo was transferred to
[102][103]
Starbucks in 2005, but has since resurfaced at www.starbuckscoffee.org.uk. Christian bookstores
and websites in the US are selling a T-shirt featuring a logo with the siren replaced by Jesus and the
[104]
words "Sacrificed for me" around the edge.
Other successful cases filed by Starbucks include the case won in 2006 against the chain Xingbake in
Shanghai, China for trademark infringement, because the chain used a green-and-white logo with a name
[105]
that sounded phonetically similar to the Chinese for Starbucks. Starbucks did not open any stores
after first registering its trademark in Russia in 1997 and in 2002 a Russian lawyer successfully filed a
request to cancel the trademark. He then registered the name with a Moscow company and asked for
[21]
$600,000 to sell the trademark to Starbucks, but was ruled against in November 2005.
In 2003, Starbucks sent a cease-and-desist letter to "HaidaBucks Coffee House" in Masset, British
Columbia, Canada. The store was owned by a group of young Haida men, commonly referred to as
"bucks." After facing criticism, Starbucks dropped its demand after HaidaBucks dropped "coffee house"
[106]
from its name. Sam Buck Lundberg, who owns a coffee store in Oregon, was prohibited from using
[107]
"Sambuck's Coffee" on the shop front in 2006.
In 2005 Starbucks lost a trademark infringement case against a smaller coffee vendor in South Korea that
operates coffee stations under the name Starpreya. The company, Elpreya, says Starpreya is named
after the Norse goddess, Freja, with the letters of that name changed to ease pronunciation by Koreans.
[108]
The court rejected Starbucks' claim that the logo of Starpreya is too similar to their own logo. A bar
owner in Galveston, Texas, USA won the right to sell "Star Bock Beer" after a lawsuit by Starbucks in

19. 2003 after he registered the name, but the 2005 federal court ruling also stated that the sale of the beer
[109]
must be restricted to Galveston, a ruling upheld by the Supreme Court in 2007.
Ongoing cases include a dispute over the copyright application for Seattle's Rat City Rollergirls logo in
[110] [111]
2008 The company claimed the roller derby league's logo by a Washington artist was too similar to
its own. Starbucks requested an extension to further examine the issue and possibly issue a complaint,
which was granted by the Trademark Office. The July 16, 2008 deadline passed without action by the
[112]
corporation. Starbucks launched action against an Indian cosmetics business run by Shahnaz Husain,
after she applied to register the name Starstruck for use with coffee and related products. She said her
[113]
aim was to open a chain of stores selling coffee and chocolate-based cosmetics.
Others have used the Starbucks logo unaltered and without permission, such as a café in Pakistan that
[114]
used the logo in 2003 in its advertisements and a cafe in Cambodia in 2009, the owner saying that
[115]
"whatever we have done we have done within the law".
Intellectual property
Environmental impact
Grounds for your Garden
In 1999, Starbucks started "Grounds for your Garden" to make their business environmentally friendlier.
This gives leftover coffee grounds to anyone requesting it for composting. Although not all stores and
regions participate, customers can request and lobby their local store to begin the practice.
In 2004, Starbucks began reducing the size of their paper napkins and store garbage bags, and lightening
[116]
their solid waste production by 816.5 t (1,800,000 lb). In 2008, Starbucks was ranked No.15 on the
U.S. Environmental Protection Agency's list of Top 25 Green Power Partners for purchases of renewable
[117]
energy.

20. In October 2008, The Sun newspaper reported that Starbucks was wasting 23.4 million liters (6.2 million
US gal) of water a day by leaving a tap constantly running for rinsing utensils in a 'dipper well' in each of
[118] [119]
its stores, but this is often required by governmental public health code.
In June 2009, in response to concerns over its excessive water consumption, Starbucks re-evaluated its
use of the dipper well system. In September 2009, company-operated Starbucks stores in Canada & the
United States successfully implemented a new water saving solution that meets government health
standards. Different types of milk are given a dedicated spoon that remains in the pitcher and the dipper
wells were replaced with push button metered faucets for rinsing. This will reportedly save up to 150 US
[120][not in citation given]
gal (570 l) of water per day in every store.
A bin overflowing with Starbucks cups
Recycling
Starbucks began using 10% recycled paper in their cups in 2004, which they claimed was the first time
that recycled material had been used in a product that came into direct contact with a food or
[121]
beverage. In 2005 Starbucks received the National Recycling Coalition Recycling Works
[122]
Award. Allen Hershkowitz of the Natural Resources Defense Council called the 10% content
[121]
'miniscule' but Starbucks claimed they only used 10% recycled material because it is more expensive.
Starbucks bought 2.5 billion cups for stores in North America in 2007. The 10% recycled paper cups used
by Starbucks are not recyclable, because the plastic coating that prevents the cup from leaking also
prevents it from being recycled. The plastic cups used for cold drinks are also non-recyclable in most
regions. Starbucks cups were originally made using plastic No.1 (polyethylene terephthalate, PETE) but
were changed to plastic No.5 (polypropylene, PP). The former type of plastic can be recycled in most
regions of the U.S. whereas the latter cannot. Starbucks is considering using biodegradable material
instead of plastic to line the cups, and is testing composting of the existing cups. The exception to this is
stores in Winnipeg, Manitoba, Canada, where paper cups are recycled to a local company called
"Wriggler's Wranch", where they are composted. The majority of Starbucks stores do not have recycling
[123]
bins; only 1/3 of company-owned stores recycled any materials in 2007; however, improvements have

21. since been made and recycling bins are popping up in more stores (the only thing hindering Starbucks'
ability to have bins in every store is the lack of facilities for storage and collection of recycling in certain
[citation needed]
areas.)
Starbucks gives customers a 10-cent discount when they bring their own reusable cup, and it now uses
corrugated cup sleeves made from 85 percent post-consumer recycled fiber, which is 34 percent less
[123]
paper than the original.
Fair trade
Starbucks coffee beans
[124]
In 2000, the company introduced a line of fair trade products. Of the approximately 136,000 metric
tons (300 million pounds) of coffee Starbucks purchased in 2006, only about 6% was certified as fair
[125]
trade.
According to Starbucks, they purchased 2,180 metric tons (4.8 million pounds) of Certified Fair Trade
coffee in fiscal year 2004 and 5,220 metric tons (11.5 million pounds) in 2005. They have become the
largest buyer of Certified Fair Trade coffee in North America (10% of the global market). Transfair
[126]
USA, a third-party certifier of Fair Trade Certified coffee in the United States, has noted the impact
Starbucks has made in the area of Fair Trade and coffee farmer's lives:
Since launching its FTC coffee line in 2000, Starbucks has undeniably made a significant contribution to
family farmers through their rapidly growing FTC coffee volume. By offering FTC coffee in thousands of
stores, Starbucks has also given the FTC label greater visibility, helping to raise consumer awareness in
the process.
[127]
All espresso roast sold in the UK and Ireland is Fairtrade.
Groups such as Global Exchange are calling for Starbucks to further increase its sales of fair trade
[128]
coffees.
Beyond Fair Trade Certification, Starbucks argues that it pays above market prices for all of its
[citation needed]
coffee. According to the company, in 2004 it paid on average $1.42 per pound ($2.64 kg) for
[129]
high-quality coffee beans, 74% above the commodity prices at the time.
After a long-running dispute between Starbucks and Ethiopia, Starbucks agreed to support and promote
[130]
Ethiopian coffees. An article in BBC NEWS, states that Ethiopian ownership of popular coffee
designations such as Harrar and Sidamo is acknowledged even if they are not registered. The main
reason Ethiopia fought so hard for this acknowledgement was to allow its poverty-stricken farmers a

22. chance to make more money. Unfortunately, this has not been the case. In 2006 Starbucks says it paid
$1.42 per pound for its coffee. At, the coffee Starbucks bought for $1.42 per pound had a selling price,
after transportation, processing, marketing, store rentals, taxes and staff salary and benefits of $10.99 per
[131]
pound. As of August 2010, Starbucks sells only one Ethiopian coffee on its website and it is
proclaimed by the website to be new.
Ethos water
Ethos, a brand of bottled water acquired by Starbucks in 2003, is sold at locations throughout North
America. Ethos bottles feature prominent labeling stating "helping children get clean water", referring to
the fact that $.05 from each $1.80 bottle sold ($.10 per bottle in Canada) is used to fund clean water
projects in under-developed areas. Although sales of Ethos water have raised over $6,200,000 for clean
water efforts, the brand is not incorporated as a charity. Critics have argued that the claim on the label
misleads consumers into thinking that Ethos is primarily a charitable organization, when it is actually a for-
profit brand and the vast majority of the sale price (97.2%) does not support clean-water
[132][133]
projects. The founders of Ethos have stated that the brand is intended to raise awareness of third-
world clean water issues and provide socially responsible consumers with an opportunity to support the
[134]
cause by choosing Ethos over other brands. Starbucks has since redesigned the American version of
the Ethos water bottles, stating the amount of money donated per bottle in the description.
Controversy
A local coffee shop in New York's East Village claiming it had to close because Starbucks is willing to pay higher rent for the
space
Market strategy

23. Starbucks footprint in the United States, showing saturation of metropolitan areas
Some of the methods Starbucks has used to expand and maintain their dominant market position,
including buying out competitors' leases, intentionally operating at a loss, and clustering several locations
in a small geographical area (i.e., saturating the market), have been labeled anti-competitive by
[135]
critics. For example, Starbucks fueled its initial expansion into the UK market with a buyout of Seattle
Coffee Company, but then used its capital and influence to obtain prime locations, some of which
operated at a financial loss. Critics claimed this was an unfair attempt to drive out small, independent
[136]
competitors, who could not afford to pay inflated prices for premium real estate.
Labor disputes
Baristas work inside the Seattle store at 1912 Pike Place.
Starbucks workers in seven stores have joined the Industrial Workers of the World (IWW) as
[137]
the Starbucks Workers Union since 2004.
According to a Starbucks Union press release, since then the union membership has begun expanding to
[138][139]
Chicago and Maryland in addition to New York City, where the movement originated. On March 7,
2006, the IWW and Starbucks agreed to a National Labor Relations Board settlement in which three
Starbucks workers were granted almost US$2,000 in back wages and two fired employees were offered
[140][141][142]
reinstatement. According to the Starbucks Union, on November 24, 2006, IWW members
picketed Starbucks locations in more than 50 cities around the world in countries including Australia,
Canada, Germany, and the UK, as well as U.S. cities including New York, Chicago, Minneapolis and San
[143]
Francisco, to protest the firing of five Starbucks Workers Union organizers by Starbucks and to
demand their reinstatement.

24. The Reverend Billy leading an anti-Starbucks protest in Austin, Texas in 2007
[144] [145] [146]
Some Starbucks baristas in Canada, Australia and New Zealand, and the United States belong
to a variety of unions.
In 2005, Starbucks paid out US$165,000 to eight employees at its Kent, Washington, roasting plant to
settle charges that they had been retaliated against for being pro-union. At the time, the plant workers
were represented by the International Union of Operating Engineers. Starbucks admitted no wrongdoing
[137]
in the settlement.
[145]
A Starbucks strike occurred in Auckland, New Zealand, on November 23, 2005. Organized by Unite
Union, workers sought secure hours, aminimum wage of NZ$12 an hour, and the abolition of youth rates.
The company settled with the Union in 2006, resulting in pay increases, increased security of hours, and
[147]
an improvement in youth rates.
In March 2008, Starbucks was ordered to pay baristas over US$100 million in back tips in a
Californian class action lawsuit launched by baristas alleging that granting shift-supervisors a portion
of tips violates state labor laws. The company plans to appeal. Similarly, an 18-year-old barista in
Chestnut Hill, MA has filed another suit with regards to the tipping policy. Massachusetts law also states
[148][149]
that managers may not get a cut of tips. A similar lawsuit was also filed in Minnesota on March 27,
[150]
2008.
[edit]Opening without planning permission
Starbucks has been accused by local authorities of opening several stores in the UK in retail premises,
without the planning permission for a change of use to a restaurant. Starbucks has argued that "Under
current planning law, there is no official classification of coffee shops. Starbucks therefore encounters the
difficult scenario whereby local authorities interpret the guidance in different ways. In some instances,
[151]
coffee shops operate under A1 permission, some as mixed use A1/A3 and some as A3".
In May 2008, a branch of Starbucks was completed on St. James's Street in Kemptown, Brighton,
England, despite having been refused permission by the local planning authority, Brighton and Hove City
[152][153]
Council, who claimed there were too many coffee shops already present on the street. Starbucks
appealed the decision by claiming it was a retail store selling bags of coffee, mugs and sandwiches,
[154]
gaining a six month extension, but the council ordered Starbucks to remove all tables and chairs from

25. [155]
the premises, to comply with planning regulations for a retail shop. 2500 residents signed a petition
[156]
against the store, but after a public inquiry in June 2009 a government inspector gave permission for
[157]
the store to remain.
A Starbucks in Hertford won its appeal in April 2009 after being open for over a year without planning
[158] [159] [160] [161]
permission. Two stores in Edinburgh, one in Manchester, one in Cardiff, one in Pinner and
[151]
Harrow, were also opened without planning permission. The Pinner cafe, opened in 2007, won an
[162] [163]
appeal to stay open in 2010. One in Blackheath, Lewisham was also under investigation in 2002
for breach of its licence, operating as a restaurant when it only had a licence for four seats and was
limited to take away options. There was a considerable backlash from members of the local community
who opposed any large chains opening in what is a conservation area. To this date, the Starbucks is still
operating as a takeaway outlet.
[edit]Hoax letter
There have been calls for boycott of Starbucks stores and products because it has been wrongly claimed
[164]
that Starbucks sends part of its profits to the Israeli military, but such allegations are based on a hoax
[165]
letter attributed to the President, Chairman and CEO of Starbucks Howard Schultz, who is Jewish and
[166]
supports Israel's right to exist. He is a recipient of several Israeli awards including "The Israel 50th
Anniversary Tribute Award" for "playing a key role in promoting a close alliance between the United
[167]
States and Israel."
The hoax letter claiming that Schultz had donated money to the Israeli military was actually written by
[166][168] [169]
Andrew Winkler, editor of the ziopedia.org website and an AustralianHolocaust denier. Winkler
[166]
has admitted fabricating the document. Starbucks responded to these claims, widely circulated on the
internet, stating that "Neither Chairman Howard Schultz nor Starbucks fund or support the Israeli Army.
[167]
Starbucks is a non-political organization and does not support individual political causes." The protests
against Starbucks derived from the Winkler letter were not the first, these reported occurred in June 2002
[168]
in Cairo, Dubai and Beirut universities in response to Schultz's criticism of Yasser Arafat.
Starbucks has been a regular target of activists protesting against the Israeli intervention in Gaza over the
(false) claims. Starbucks was forced to close a store in Beirut, Lebanon due to demonstrators shouting
[170]
anti-Israel slogans and causing customers to flee. Demonstrators hung several banners on the shop's
window and used white tape to paste aStar of David over the green-and-white Starbucks sign. They also
distributed a letter saying Schultz "is one of the pillars of the American Jewish lobby and the owner of the
[171]
Starbucks," which they said donates money to the Israeli military.
A store on Piccadilly with its windows boarded up after being smashed by protesters

26. A damaged front window of a Starbucks coffee shop in Toronto
On January 2009, two Starbucks stores in London were the target of vandalism by pro-
Palestinian demonstrators who broke windows and reportedly ripped out fittings and equipment after
[172][173][173][174][175][176][177]
clashes with riot police.
"The Way I See It"
Quotes by artists, writers, scientists and others have appeared on Starbucks cups since 2005 in a
[178]
campaign called "The Way I See It". Some of the quotes have caused controversy, including one by
writer Armistead Maupin and another by Jonathan Wells that linked 'Darwinism' to eugenics, abortion and
[179]
racism. Disclaimers were added to the cups noting that these views were not necessarily those of
[citation needed]
Starbucks.
US military viral email
A US Marines Sergeant emailed ten of his friends in August 2004 having wrongly been told that
Starbucks had stopped supplying the military with coffee donations because the company did not support
the Iraq War. The email became viral, being sent to tens of millions of people. Starbucks and the
[180]
originator sent out a correction, but Starbucks' VP of global communications, Valerie O'Neil, says the
[181][182][183]
email is still forwarded to her every few weeks.
Gun controversy
As gun laws in many US states have become more relaxed, and more states have adopted open
carry or concealed carry statutes, some gun owners have begun carrying guns while performing every
day shopping or other tasks. Many stores and companies have responded by banning the carrying of
guns on their premises, as allowed by many states local laws. Starbucks has not instituted a policy
banning guns in their stores.
[184][185]
In 2010, the Brady Campaign proposed a boycott of Starbucks due to their gun policy. At that time,
Starbucks released a statement saying "We comply with local laws and statutes in all the communities we
serve. That means we abide by the laws that permit open carry in 43 U.S. states. Where these laws don't
exist, openly carrying weapons in our stores is prohibited. The political, policy and legal debates around
[186][187]
these issues belong in the legislatures and courts, not in our stores."

27. In 2012, the National Gun Victims Action Council published an open letter to Starbucks, asking them to
revise their policy, and also proposed a "Brew not Bullets" boycott of the chain until the policy is changed,
[188][189][190]
with Valentine's Day selected as a particular day to boycott the chain.
In response, gun rights advocates started a counter "Starbucks Appreciation Day" buycott to support
Starbucks stance, and suggested paying for products using two-dollar bills as a sign of Second
[191][192][193]
Amendment support.
Same-sex marriage
In January 2012, a Starbucks executive stated it supports the legalization of same-sex marriage. This
[194]
resulted in a boycott by the National Organization for Marriage, a traditionalist Christian group. On the
[195]
other hand, 640,000 people signed a petition thanking Starbucks for its support.
European tax avoidance
In October 2012, Starbucks faced criticism after a Reuters investigation found that the company
reportedly paid just £8.6m in corporation tax in the UK over 14 years, despite generating over £3bn in
[196][197]
sales. This included no tax having been paid on £1.3bn of sales in the three years prior to 2012. It
is alleged Starbucks was able to do this by charging high licencing fees to the UK branch of the business,
[198]
allowing them to declare a £33m loss in 2011. The British subsidiary pays patent fees to the USA
subsidiary, purchases coffee beans from the Netherlands subsidiary (where corporation tax is lower than
[199]
the UK) and the Swiss subsidiary for other "miscellaneous services". A YouGovsurvey suggested that
Starbucks' brand image was substantially weakened by the controversy surrounding how much tax it pays
[200]
in the UK several weeks after the allegations surfaced. Starbucks' chief financial officer (CFO)
appeared before the Public Accounts Committee in November and admitted that the Dutch government
granted a special tax rate to their European headquarters which the UK business pays royalties
[201]
to. Dutch law permits companies to send royalties collected from other countries to be transferred
[202]
totax havens without incurring taxes, unlike in the rest of the EU. The CFO denied that they chose the
Netherlands as their European headquarters to avoid tax, but rather because they have a coffee
[201]
roasting plant there. Until 2009 the royalty rate was 6% of UK sales but after being challenged by UK
[202]
tax authorities it was reduced to 4.7%. The CFO told the committee this reflected costs such as
designing new stores and products, but admitted that there was no detailed analysis by which the rate is
decided. The coffee they serve in the UK is purchased from the Swiss subsidiary which charges a 20%
[201]
markup on the wholesale price and pays 12% corporation tax on profits. Coffee is not transported to
[203]
Switzerland but the 30 people who work in the subsidiary assess coffee quality. Regarding how
Starbucks frequently reports a loss in the UK, the CFO told the committee Starbucks are "not at all
[201]
pleased" about their financial performance in the UK. MPs replied that it "just doesn't ring true" that the
business made a loss, pointing out that the head of the business had been promoted to a new post in the
[204][196]
USA and they consistently told shareholders that the business was profitable.
In Ireland, Starbucks' subsidiary Ritea only paid €35,000 in tax between 2005 and 2011 and the
subsidiary recorded losses in every year other than 2011. Ritea is owned by Dutch-based Starbucks
[205]
Coffee Emea. Their French and German subsidiaries make large losses because they are in heavily in
debt to the Dutch subsidiary which charges them higher interest rates than the group pays to borrow.
Reuters calculated that without paying interest on the loans and royalty fees, the French and German

28. subsidiaries would have paid €3.4m in tax. The Dutch subsidiary that royalties are paid to made a €507k
profit in 2011 from revenues of €73m, while the company that roasts coffee made a profit of €2m in 2011
[202]
and paid tax of €870k.
Protesters, who were unimpressed by the company's offer to pay £20 million tax in the next two years,
[206]
took part in protests in December 2012 in affiliation with UK Uncut.
Music, film, and television
Main article: Hear Music
Starbucks' second Hear Music Coffeehouse at the South Bank development adjacent to the River Walk in downtown San
Antonio, Texas.
Hear Music is the brand name of Starbucks' retail music concept. Hear Music began as a catalog
company in 1990, adding a few retail locations in the San Francisco Bay Area. Hear Music was
purchased by Starbucks in 1999. Nearly three years later, in 2002, they produced a Starbucks opera
album, featuring artists such as Luciano Pavarotti, followed in March 2007 by the hit CD "Memory Almost
Full" by Paul McCartney, making McCartney the first artist signed to New Hear Music Label sold in
Starbucks outlets. Its inaugural release was a big non-coffee event for Starbucks the first quarter of 2007.
In 2006, the company created Starbucks Entertainment, one of the producers of the 2006 film Akeelah
[207]
and the Bee. Retail stores heavily advertised the film before its release and sold the DVD.
Parent company relationships
Starbucks maintains control of production processes by communicating with farmers to secure beans,
roasting its own beans, and managing distribution to all retail locations. Additionally, Starbucks’ Coffee
and Farmer Equity Practices require suppliers to inform Starbucks what portion of wholesale prices paid
[208][209]
reaches farmers.

29. Howard Schultz
From Wikipedia, the free encyclopedia
Howard Mark Schultz
Born July 19, 1953 (age 59)
Brooklyn, New York, United States
Alma mater Northern Michigan University
Occupation Chairman and CEO of Starbucks
Salary US$ 21,775,000[1]
Net worth $1.5 Billion
Religion Judaism
Spouse(s) Sheri Kersch Schultz
Children 2

30. Website
Starbucks
Howard Mark Schultz (born July 19, 1953) is an American businessman and writer. He is best known as the
chairman and CEO[2] ofStarbucks and a former owner of the Seattle SuperSonics. Schultz co-
founded Maveron, an investment group, in 1998 with Dan Levitan.
In 2012, Forbes magazine ranked Schultz as the 354th richest person in the United States, with a net worth
of $1.5 billion.[3]
Contents
[hide]
1 Biography
o 1.1 Career
2 Ownership of the Seattle SuperSonics
3 Controversy
4 Awards
5 References
6 Further reading
7 External links
Biography
Howard Mark Schultz was born to a German-Jewish family on July 19, 1953 in Brooklyn, New York, the son of
ex-US Army trooper and then truck driver Fred Schultz, and his wife Elaine.[4] With his younger sister, Ronnie,
and brother, Michael, he grew up in the CanarsieBayview Houses of the New York City Housing Authority. As
Schultz's family was poor, he saw an escape in sports such as baseball, football, and basketball. He went
to Canarsie High School, from which he graduated in 1971.[5] In high school, Schultz excelled at sports and was
awarded an athletic scholarship to Northern Michigan University[4] – the first person in his family to go to
college. A member of Tau Kappa Epsilon, Schultz received his bachelor's degree in Communications in 1975.
He has two children, named Eliahu Jordan, who goes by Jordan, and Addison.
Career

31. After graduating, he worked as a salesperson for Xerox Corporation. In 1979 he became a general manager
for Swedish drip coffee maker manufacturer, Hammarplast.[4] In 1981, Schultz visited a client of Hammarplast,
a fledgling coffee-bean shop called Starbucks Coffee Company in Seattle which he joined as the Director of
Marketing a year later.[6] On a buying trip to Milan, Italy for Starbucks, Schultz noted that coffee bars existed on
practically every street. He learned that they not only served excellent espresso, they also served as meeting
places or public squares; they were a big part of Italy's societal glue, and there were 200,000 of them in the
country.
On his return, he tried to persuade the owners (including Jerry Baldwin) to offer traditional espresso beverages
in addition to the whole bean coffee, leaf teas and spices they had long offered. After a successful pilot of the
cafe concept, the owners refused to roll it out company-wide, saying they didn't want to get into the restaurant
business. Frustrated, Schultz started his own coffee shop in 1985, named 'Il Giornale' after the Milanese
newspaper. Two years later, the original Starbucks management decided to focus on Peet's Coffee & Tea and
sold its Starbucks retail unit to Schultz and Il Giornale for $3.8 million.
Schultz renamed Il Giornale with the Starbucks name, and aggressively expanded its reach across the United
States. Schultz's keen insight in real estate and his hard-line focus on growth drove him to expand the
company rapidly. Schultz did not believe in franchising, and made a point of having Starbucks retain ownership
of every domestic outlet.
Schultz authored the book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time with
Dori Jones Yang in 1997. His second book Onward: How Starbucks Fought for Its Life Without Losing Its
Soul with Joanne Gordon, was published in 2011.
On January 8, 2008 Schultz regained his status as CEO of Starbucks after an eight-year hiatus.[7] At this time,
Schultz was earning a total compensation of $9,740,471, which included a base salary of $1,190,000, and
options granted of $7,786,105.[8] Schultz is a significant stakeholder in Jamba Juice.[9]
Ownership of the Seattle SuperSonics
Schultz is the former owner of the NBA's Seattle SuperSonics. During his tenure as team owner, he was
criticized for his naivete and propensity to run the franchise as a business rather than a sports team. [10] Schultz
feuded with big name star Gary Payton, feeling that Payton disrespected him and the team by not showing up
to the first day of training camp in 2002.[citation needed]
On July 18, 2006, Schultz sold the team to Clayton Bennett - chairman of the Professional Basketball Club
LLC, an ownership group from Oklahoma City - for $350 million, after having failed to convince the city
of Seattle to provide public funding to build a new arena in the Greater Seattle area to replace KeyArena. At the
time of the team's sale, it was speculated that the new owners would move the team to their city some timeafter

32. the 2006-2007 NBA season.[11] On July 2, 2008, the city of Seattle reached a settlement with the new
ownership group and the SuperSonics moved to Oklahoma City and became the Thunder for the 2008-09 NBA
season.[12] The sale to the out-of-state owners considerably damaged Schultz' popularity in Seattle.[13] In a local
newspaper poll, Schultz was judged "most responsible" for the team leaving the city.[14] Before the city of
Seattle settled with the Oklahoma City ownership group, Schultz filed a lawsuit against Bennett - in April 2008 -
to rescind the July 2006 sale based on what Schultz claimed was fraud and intentional misrepresentation,
perhaps trying to reduce the damage to his local image for having sold the team to out of state owners.
However, Schultz quickly dropped the lawsuit in August 2008. When Bennett purchased the SuperSonics and
its sister franchise in the WNBA, the Seattle Storm, for $350 million, he agreed to a stipulation that he would
make a "good-faith best effort" for one year to keep both teams in Seattle. The sincerity of the good faith effort
was widely disputed by the way Bennett acted and by direct quotes from his partnerAubrey McClendon. On
January 8, 2008, Bennett sold the Storm to Force 10 Hoops, LLC, an ownership group of four Seattle women,
which kept the team in Seattle.[15]
Controversy
Speaking to CNBC in February 2009 about his concerns over the global economic crisis, Schultz said that "the
place that concerns us the most is western Europe, and specifically the UK", which he considered to be in a
"spiral", expressing concern with the levels of unemployment and consumer confidence in the country.
Lord Mandelson, the then-UK Business Secretary, responded saying that Britain was "not spiralling, although
I've noticed Starbucks is in a great deal of trouble", and suggesting that Schultz was projecting his own
company's trouble in the United Kingdom onto the wider national economy. Mandelson was later overheard at
a drinks reception, saying: "Why should I have this guy running down the country? Who the hell is he? How the
hell are [Starbucks] doing?"[16]
An official comment from Starbucks read that "It is a difficult economic situation in the US and around the
world. Please be assured that Starbucks has no intention of criticising the economic situation in the UK. We are
all in this together and as a global business we are committed to each and every market we serve."[16]
Awards
In 1998, Schultz was awarded the "Israel 50th Anniversary Tribute Award" from the Jerusalem Fund of Aish
Ha-Torah for "playing a key role in promoting a close alliance between the United States and Israel". [17]
In 1999, Schultz was awarded the "National Leadership Award" for philanthropic and educational efforts to
battle AIDS.[18]

33. The recipient of the 2004 International Distinguished Entrepreneur Award, presented to him from the University
of Manitoba for his outstanding success and commendable conduct of Starbucks. [19]
In 2007 he received the FIRST Responsible Capitalism Award.[20]
On March 29, 2007, Schultz accepted the Rev. Theodore M. Hesburgh, C.S.C., Award for Ethics in Business at
the Mendoza College of Business at the University of Notre Dame. The same night, he delivered the Frank
Cahill Lecture in Business Ethics.[21]
Schultz became Fortune Magazine's "2011 Businessperson of the Year" for his initiatives in the economy and
job market.[22]
SWOT Analysis for Starbucks Coffee Company
(I developed this SWOT Analysis as an assignment in my Strategic Marketing
class)
SWOT Analysis
1. A. Strengths
Strength 1: Developed a niche in the market as a high-end brand of coffee,
offering rich, exotic coffee blends
Strength 2: The atmosphere in their coffee bars provides customers with a
feeling of sophistication, style and a sense of knowledge. This has turned into a
Starbucks culture.
Strength 3: Have attracted employees who are well educated and eager to
communicate the message of their product.
How do these strengths enable the firm to meet customers’ needs?
These strengths enable the firm to meet customer’s needs because they allow
the customer to experience a rich, exotic blend of coffee, and a way of life.
They focus on the quality of their product so that the customer can taste the
difference between their gourmet cup of coffee and the traditional, cheap cup

34. of black liquid found in convenient stores. Moreover, they provide customers
with feeling of sophistication, style, and a sense of knowledge when they walk
into their coffee bars. In doing so, they replicated authentic, Italian-style
coffee bars to allow customers to experience a way of life when they visit their
store. They are successful with this because they hire employees who are well
educated and eager to express the Starbucks culture.
How do these strengths differentiate the firm from its competitors?
These strengths differentiate the firm from its competitors because Starbucks
has developed a niche in the market as a high-end brand of coffee. This is
different from the traditional cup of coffee found in convenient stores or at
home because Starbucks focuses on the quality of their coffee by using the
finest coffee beans and maintaining freshness with their Flavor Lock Bags.
Furthermore, the atmosphere inside a Starbucks coffee bar provides customers
a feeling of sophistication, style, and a sense of knowledge. This is
characteristics of their store that cannot be matched by other competitor’s
locations such as McDonalds. Also, Starbucks has gained loyal and dedicated
employees. This has transitioned into excellent customer service.
B. Weaknesses
Weakness 1: Many people believe that coffee is a substitute product. This
means that people are willing to find other means of consumption if price
increases or availability is diminished.
Weakness 2: Although Starbucks provides excellent customer service due to
their loyal and dedicated employees, they do this at a cost. They pay their
employees more than restaurants and retailers. Furthermore, they offer
benefits to full-time and part-time employees. This results in high costs for the
company.
How do these weaknesses prevent the firm from meeting customers’ needs?
The most important reason that these weaknesses prevent the firm from
meeting the customer’s needs is because in the event that prices should rise at
Starbucks, or the economy should experience a recession, people are likely to

35. spend more conservatively. This is because many people treat coffee as a
substitute product. If consumers are not loyal coffee drinkers and they choose
to spend conservatively, they might prefer a cheap cup of coffee over the
premium price that Starbucks charges for its gourmet coffee.
How do these weaknesses negatively differentiate the firm from its
competitors?
These weaknesses differentiate this firm from its competitors because other
competitors are not getting hit as hard during this economic recession. This is
because Starbucks most significant competitors are low-price operators such as
McDonalds. While Starbucks operates as a high-end, higher priced product,
consumers are likely to turn to these competitors if they are spending more
conservatively.
C. Opportunities (external situations independent of the firm—not
strategic options)
Opportunity 1: Emerging international markets.
Opportunity 2: Technological advancements.
How are these opportunities related to serving customers’ needs?
These opportunities are related to serving customer needs because Starbucks
will be able to satisfy the desire for their coffee –along with the experience– in
other countries. Emerging international markets allow Starbucks to expand
while our country is experiencing and economic recession. Furthermore,
technological advancements allow Starbucks to increase quality and decrease
waiting time. Technology is continuously improving, making things quicker,
faster and better. It most certainly will make its way towards the coffee
business.
What is the time horizon of each opportunity?
Starbucks has already begun flourishing in these emerging international
markets, beginning in China. Specifically, they have opened 420 stores and
consider it a great opportunity because of the large number of people in this

36. area. Furthermore, the company has considered buying high-end brewing
machines that will allow baristas to act more easily with customers, providing
an even better experience.
D. Threats (external situations independent of the firm)
Threat 1: Economy experiencing a recession.
Threat 2: Emergence of competitors.
Threat 3: Rise in the cost of coffee & dairy products.
How are these threats related to serving customers’ needs?
These threats are related to serving customer’s needs because they impact the
price the consumers pay for a cup of coffee. While our economy is experiencing
a recession, consumers who are not loyal coffee drinkers are likely to look for
substitute products. This is because substitute products, such as coffee from
McDonalds are less expensive. These competitors are emerging and flourishing
during this economy because gourmet coffeehouses like Starbucks are having
trouble lowering prices while the cost of coffee beans and dairy products are
rising.
What is the time horizon of each threat?
Time can only tell when the economy will turn around. Signs point to stability
in the near future, but until this happens, Starbucks will be under pressure to
compete with low-cost operators such as McDonalds. Although Starbucks has
always competed against low-cost operators, the emergence and flourishing of
these competitors during this economic recession will continue to act as a
threat.
E. The SWOT Matrix
Strengths: Opportunities:
•Developed a niche in the market as a • Emerging international markets.

37. high-end brand of coffee • Technological advancements.
• The atmosphere in their coffee bars
provides customers with a feeling of
sophistication, style and a sense of
knowledge.
• Have attracted employees who are
well educated and eager to
communicate the message of their
product.
Weaknesses: Threats:
• Many people believe that coffee is a • Economy experiencing a recession.
substitute product.
• Emergence of competitors.
• Although Starbucks provides
excellent customer service due to their • Rise in the cost of coffee & dairy
loyal and dedicated employees, they products.
do this at a cost.
F. Developing Competitive Advantages
Describe ways that the firm can match its strengths to its opportunities to
create capabilities in serving customers’ needs.
The firm can math its strengths to its opportunities to create capabilities in
serving customer needs by selling the Starbucks experience in foreign
countries. There are emerging international markets for coffee, such as China,
who seem to be accepting the taste and culture of the Starbucks brand.
However, Starbucks must be aware of the fact that, although the demographics
might tell them to expand in a certain area, not everyone is enthusiastic about
American culture. Furthermore, Starbucks must maintain the quality and
customer service that distinguishes them from the competition.
Also, technological advancements have influenced Starbucks to consider buying
high-end brewing machines that will allow baristas to act more easily with

38. customers, providing an even better experience. The experience is the focal
point of what Starbucks is trying to sell when you walk into their coffeehouse.
Are these capabilities and competitive advantages grounded in the basic
principles of operational excellence, product leadership, and/or customer
intimacy? If so, how are these capabilities and advantages made apparent to
customers?
These competitive advantages allow Starbucks to enter an untapped market
and create first mover advantages. There are many countries that value coffee;
however, Starbucks is becoming and internationally noticed brand.
Can the firm convert its weaknesses into strengths or its threats into
opportunities? If not, how can the firm minimize or avoid its weaknesses
and threats?
The firm can convert its weaknesses into strengths by maintaining the quality
of their product and the excellent customer service their business was built
upon. Although we are experiencing an economic recession, Starbucks has
developed a niche product that many people are still willing and able to buy.
Does the firm possess any major liabilities (unconverted weaknesses that
match unconverted threats) or limitations (unconverted weaknesses or
threats that match opportunities)? If so, are these liabilities and limitations
apparent to customers?
The firm does possess major liabilities. This is because the economy is facing a
recession and there are still many people that believe coffee is a substitute
product. If prices rise, people might be looking to buy the cheaper product. I
believe these limitations are apparent to customers because Starbucks sales
have staggered over recent years, causing them to close underperforming
coffeehouses.
Can the firm do anything about its liabilities or limitations, especially those
that impact the firm’s ability to serve customers’ needs?

39. The firm can continue to provide excellent customer service and maintain
great quality in their product in order to serve customers’ needs. This is the
niche that separates them from the rest of the competition. Moreover, this is
the base to what their company was built upon. There are many consumers
that will still be willing to pay a premium price for a premium product.
G. Developing a strategic focus.
What is the overall strategic focus of the marketing plan? Does the strategic
focus follow any particular direction, such as aggressiveness, diversification,
turnaround, defensiveness, or niche marketing?
The overall strategic focus of the marketing plan is to reenergize the company
by returning to its roots. Howard Shultz is once again CEO of Starbucks. His
main priority is to excel in customer service and maintain the quality of his
gourmet coffee that everybody recognizes. For instance, he terminated the
idea of selling hot breakfast sandwiches inside the coffeehouse, due to conflict
of scent with the coffee beans. Also, Starbucks has considered buying high-end
brewing and espresso machines that will allow baristas to act more easily with
customers. Furthermore, he continues to stress education and training to
employees to allow better customer service and quality. In addition, they have
developed web-sites and social networks to allow customer feedback, along
with developing ideas for energy drinks and health oriented items. These are
all steps on bringing Starbucks back to its grassroots.
Describe the firm’s strategic focus in terms of a strategy canvas. How does
the firm’s strategic thrust provide sufficient focus and divergence from
other firms in the industry?
Although many believe that Starbucks is saturating the market by opening up
too many locations, Howard Schultz believes that weaker stores can be closed
and stronger ones can take their place. At the beginning of the company’s
existence, Shultz aimed for replication of authentic, Italian-style coffee bars.
These bars were social gathering places, usually two to three to a block. Shultz
has always been a firm believer in growth; thus, although we are experiencing
an economic recession, Starbucks still hopes to grow and become a worldwide

40. leader. This differs from other firms in the industry who are taking a more
conservative approach.