Web research: Stocks

Go the website of Starbucks Corporation at http://www.starbucks.com/aboutus and find information that you would use in developing a company profile. Click on the company, and then click on and read the brief Company Fact Sheet and Mission Statements. Then go back to the about us page and click on investor relations. Click on stock information and find the current price of the company’s stock and the high and low price of each share during the past year.
Discussion Question

How did Starbucks get its name? What is the current price of a share of Starbucks stock? What was the high and low price of a share of Starbucks stock during the past year? Does Starbucks Corporation appear to have an operating philosophy that is similar or dissimilar to other corporations? Do you think this philosophy is serving Starbucks well?

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My Response:
Jill Stidd
26 Sep 08 8:24 PM MST

I know that this post is a bit long winded,,,but I thought all these bits of information were so interesting along with all the “data” we were to get for this post. I like real life stuff. I also do not like to take simply what their website says but look further into what others are saying to get to the truth of thier statements.I wanted to find a little more details on the origination of Starbucks, It was very interesting to see where the first vision of three men started. “Starbucks began in 1971 when three academics—English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker—opened a store called Starbucks Coffee, Tea, and Spice in the touristy Pikes Place Market in Seattle. The three partners shared a love of fine coffees and exotic teas and believed they could build a clientele in Seattle much like that which had already emerged in the San Francisco Bay area. Each invested $1,350 and borrowed another $5,000 from a bank to open the Pikes Place store. Baldwin, Siegel, and Bowker chose the name Starbucks in honor of Starbuck, the coffee-loving first mate in Herman Melville's Moby Dick(so company legend has it), and because they thought the name evoked the romance of the high seas and the seafaring tradition of the early coffee traders. The new company's logo, designed by an artist friend, was a two-tailed mermaid encircled by the store's name. (http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html)

It was obvious that the inspiration for these 3 men came from Aflred, Peet, “The inspiration for the Starbucks enterprise was a Dutch immigrant, Alfred Peet, who had begun importing fine arabica coffees into the United States during the 1950s. Peet viewed coffee as a fine winemaker views grapes, appraising it in terms of country of origin, estates, and harvests. Peet had opened a small store, Peet's Coffee and Tea, in Berkeley, California, in 1966 and had cultivated a loyal clientele. (http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html)

After reading about how Schultz came on board with the company “In 1981, Howard Schultz, vice president and general manager of U.S. operations for Hammarplast—a Swedish maker of stylish kitchen equipment and housewares—noticed that Starbucks was placing larger orders than Macy's was for a certain type of drip coffeemaker. Curious to learn what was going on, he decided to pay the company a visit. The morning after his arrival in Seattle, Schultz was escorted to the Pikes Place store by Linda Grossman, the retail merchandising manager for Starbucks. A solo violinist was playing Mozart at the door, with his violin case open for donations. Schultz immediately was taken by the powerful and pleasing aroma of the coffees, the wall displaying coffee beans, and the rows of red, yellow, and black Hammarplast coffeemakers on the shelves. As he talked with the clerk behind the counter, the clerk scooped out some Sumatran coffee beans, ground them, put the grounds in a cone filter, poured hot water over the cone, and shortly handed Schultz a porcelain mug filled with the freshly brewed coffee. After three sips, Schultz was hooked. He began asking the clerk and Grossman questions about the company, about coffees from different parts of the world, and about the different ways of roasting coffee. (http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html)

As a man that knew nothing about coffee or brewing after visiting the Pikes Place store he was sold on the idea and approached the three owner to hire him. After much effort on Shultz part they hired him as the marketing director .I was interested to see why they were so resistant to his visionary ideas. I was really trying to see how Peets coffee and tea were involved, I found out that later the 3 owners of Pikes Place store also purchased Peet’s coffee and tea, located in San Francisco with about all the funds they had and there was nothing left to promote Shultz’s idea to expand locations. “But a more pressing reason for their resistance emerged shortly—Baldwin and Bowker were excited by an opportunity to purchase Peet's Coffee and Tea. The acquisition took place in 1984; to fund it, Starbucks had to take on considerable debt, leaving little in the way of financial flexibility to support Schultz's ideas for entering the beverage part of the coffee business or expanding the number of Starbucks stores.”
(http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html)

How strange that after various interactions with Shultz and Baldwin as owners of Starbucks and Shultz’s decision to go on his own that Baldwin would be involved yet again. “Ironically, as Schultz was finalizing the documents for his new company, Jerry Baldwin announced he would invest $150,000 of Starbucks' money in Schultz's coffee-bar enterprise, thus becoming Schultz's first investor. Baldwin accepted Schultz's invitation to be a director of the new company, and Gordon Bowker agreed to be a part-time consultant for six months. Bowker urged Schultz to make sure that everything about the new stores—the name, the presentation, the care taken in preparing the coffee—was calculated to lead customers to expect something better than competitors offered. Bowker proposed that the new company be named Il Giornale (pronounced ill jor-nahl-ee ) Coffee Company, a suggestion that Schultz accepted. In December 1985, Bowker and Schultz made a trip to Italy during which they visited some 500 espresso bars in Milan and Verona, observing local habits, taking notes about decor and menus, snapping photographs, and videotaping baristas in action.”
(http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html)To the question of Starbucks operating philosophy two things stood out for me…1. That Starbucks bases there attention on the employees that it hires for reasons that are very smart most companies even though they might understand this concept do not have the passion that Starbucks does, “Starbucks recognizes competitors can replicate products, but they can’t replicate people. That’s precisely why the company focuses so much attention on the employee experience, because it is employees who create meaningful connections with customers. Many marketers view employee relations as a job solely for human resources—they see employees as tools. But employees—happy, rewarded employees—can work wonders for the company’s marketing efforts. There is no better spokesperson for a company, product, and brand than someone who is happy with his job and respected by his employer and peers. A happy employee will in turn, make customers happy.”2. I found it very interesting that Starbuck has stock options for its employees. “Starbucks has more than 172,000 partners (employees) worldwide as of September 2007. Eligible part- and full-time partners qualify for a comprehensive benefit package that includes healthcare benefits and stock option grants through Bean Stock,Starbucks company-wide stock option plan. Starbucks is committed to maintaining the quality, integrity and great taste of coffee as the company grows. “We have the mostknowledgeable workforce in our industry,” says Schultz. “I take great pride, not in the number of stores we have opened, but in the growth and development of our people.”(http://tribalknowledge.biz/discussion-tribal-truths/33-the-employee-experience-matters)I think both of these topics do set Starbucks apart from other companies in terms of their operating philosophy, and I also feel that it is this commitment to their employees that creates the successes that they have had.In terms of stocks:Data as of 09/26/08 4:00 p.m. ET / $14.96 / 52 Week High$27.82/ 52 week Low $13.33Sept, 26, 2007 $27.09.

(http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-stockQuote)http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html retrieved: September 26, 2008http://tribalknowledge.biz/discussion-tribal-truths/33-the-employee-experience-matters retrieved: September 26, 2008http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-stockQuote retrieved: September 26, 2008