Starbucks in Israel- A Case of Global Strategy
Corporate background
The history of Starbucks dates to 1971, when Jerry Baldwin, Zev Siegl, and Gordon Bowker launched a coffee bean retailing store named Starbucks to sell specialty whole-bean coffee in Seattle. By 1981, the number of Starbucks stores had increased to five, and Starbucks had also established a small roasting facility in Seattle. Around the same time, Schultz, who was working with Hammarplast—a Swedish housewares company that marketed coffee mak¬ers—noticed that Starbucks, a small company from Seattle, was ordering more coffee mak¬ers than anyone else. In order to find out more about the company, Schultz visited Seattle. Schultz was so impressed by the company and its founders that he offered to work for the company.
In 1982, Schultz joined Starbucks as marketing manager, with an equity stake in the com¬pany. During his first year at Starbucks, he studied the various types of coffee and the intrica¬cies of the coffee business. The turning point came in 1983, when Schultz was sent to Milan, Italy, for an international housewares show. There he observed that every street in the city had an espresso coffee bar where people met and spent time. Schultz realized that Starbucks could introduce espresso coffee bars in the United States. He put forward this idea to his partners, but they did not like the idea of selling espresso coffee. However, after a lot of persuasion from Schultz, they agreed to allow him to sell espresso coffee in their retail shop. The busi¬ness picked up, and by the weekend, they were making more money by selling the beverage than by selling coffee beans. Still, the partners refused to venture into the beverage business, so Schultz decided to quit the company and start out on his ...