Starbucks: A Global Work-in-Progress

Starbucks was founded in 1971 by Jerry Baldwin, Zev Ziegler and Gordon Bowker - three men from Seattle who loved coffee. By 1995, Starbucks had expanded to 676 stores, all within the U.S. or Vancouver, Canada. Only in the next decade did Starbucks make its first entry into the international markets. By 2006, Starbucks had approximately 11,000 stores, with 70 percent in the U.S. and 30 percent in international markets. Outside observers, however, continually raised questions about the likely future growth of Starbucks and the mix and profitability of its U.S. versus international operations. Starbucks faced the ever-present issues of where and how to further expand its global presence. This case explores Starbucks’ possible growth modes—organic, acquisition, joint venture, and licensing—and covers issues that influenced Starbucks’ growth strategy, such as same versus new country expansion and profitability fluctuations in international markets.