In Search of Coffee Excellence: Part II: Case Study One — Starbucks. By Salman Khan.
- Salman Khan
- Feb 15
- 19 min read
Part II: Case Study One — Starbucks
2. Starbucks: Institutionalizing the ‘Third Place’
2.1 From a Single Seattle Coffee Shop to a Global Network
2.2 The Barista, the Store, and the Experience Economy
2.3 Supply Chain Ethics, Scale, and Brand Storytelling
2.4 Global Adaptation, Cultural Sensitivity, and Market Penetration
2.5 Starbucks Timeline Anchors
2.6 Conceptual Framework
2.7 Critical Counterpoint: Limitations of the Starbucks Model
2.8 Starbucks Success Story
2.9 Chapter Conclusion: From Starbucks to McDonald’s
2.10 Academic References
This a second part of the six series from initial research paper In search of Coffee excellence: Thinking globally acting locally. By Salman Khan. In search of Coffee excellence: Thinking globally acting locally.
Abstract ( for continuation purpose)
This research paper interrogates a persistent paradox within the global food and beverage industry: why certain enterprises trading in fundamentally ordinary commodities—such as coffee, sugar-based beverages, doughnuts, and burgers—successfully transcend geographical, cultural, and economic boundaries to become globally dominant brands, while others with comparable or even superior product quality remain confined to local or regional markets. The study is motivated by a long-standing intellectual curiosity informed by classical management theory, particularly the insights advanced by Peters and Waterman in In Search of Excellence, which emphasize organizational culture, disciplined execution, people-centric leadership, and customer obsession as drivers of sustained corporate success. for those who has missed out the first part of this comparative research paper please click the following link to acquainted yourself to the gravity of research and preamble. https://www.baristaacademysa.com/post/in-search-of-coffee-excellence-thinking-globally-acting-locally-by-salman-khan
2. Starbucks: Institutionalizing the ‘Third Place’ business model philosophy
Starbucks represents one of the most consequential case studies in the modern food and beverage industry—not because of coffee alone, but because of how coffee was transformed into a scalable, experiential, and cultural product. At its core, Starbucks did not merely sell beverages; it institutionalized a social concept—the “Third Place”—positioned deliberately between home (the first place) and work (the second place). This strategic framing allowed Starbucks to redefine value creation in the global coffee economy, elevating an everyday commodity into a lifestyle-driven, emotionally resonant offering.
From a management perspective, Starbucks demonstrates how organizational culture, systems, and values—when consistently executed—can turn an undifferentiated product into a globally dominant brand. The company’s trajectory offers critical lessons on experience design, human capital investment, ethical supply chains, and global market adaptation, making it a foundational case for understanding coffee excellence at scale.
2.1 From a Single Seattle Coffee Shop to a Global Network
Starbucks’ origins trace back to a single store opened in Seattle’s Pike Place Market in 1971, initially focused on selling high-quality roasted coffee beans rather than beverages. The company’s transformational inflection point came in the 1980s under the leadership of Howard Schultz, who, inspired by Italian espresso bars, envisioned coffee shops as communal social spaces rather than transactional retail outlets.
What followed was not rapid expansion for its own sake, but disciplined growth anchored in systems, brand consistency, and operational repeatability. Starbucks invested early in store standardization, training protocols, and supply chain infrastructure—allowing it to replicate the same experience across geographies while maintaining quality control. This mirrors the principles articulated in In Search of Excellence: a bias for action, close attention to customers, and strong value-driven leadership.
By the early 2000s, Starbucks had evolved into a global network spanning thousands of stores across continents, illustrating how strategic clarity combined with operational rigor can enable exponential scale without immediate dilution of brand identity.
2.2 The Barista, the Store, and the Experience Economy
A defining pillar of Starbucks’ success lies in its early recognition of the experience economy. Starbucks positioned the barista not as a low-skilled service worker, but as a brand ambassador and experience curator. This reframing had profound implications for training, employee engagement, and customer perception.
The store itself became a carefully designed environment—incorporating music, lighting, seating, aroma, and spatial flow—to encourage dwell time, social interaction, and emotional attachment. Coffee quality mattered, but it was the context in which coffee was consumed that differentiated Starbucks from competitors.
From a business management standpoint, Starbucks demonstrates how intangible assets—human interaction, ambiance, and brand rituals—can generate tangible economic value. The company’s investment in employee benefits, training, and internal culture reinforced service consistency and reduced turnover, turning labor from a cost center into a strategic asset.
2.3 Supply Chain Ethics, Scale, and Brand Storytelling
As Starbucks scaled globally, it faced the structural tension inherent in commodity-based industries: how to grow without disconnecting from origin. Starbucks responded by integrating supply chain ethics into its brand architecture through initiatives such as Coffee and Farmer Equity (C.A.F.E.) Practices, direct farmer engagement, and long-term sourcing contracts.
These initiatives served a dual purpose. Operationally, they helped stabilize supply, ensure quality, and mitigate reputational risk. Strategically, they provided a powerful narrative framework that connected consumers in urban markets to producers in developing economies. Starbucks thus transformed supply chain transparency into a form of brand storytelling—one that resonated strongly with ethically conscious consumers.
For industry professionals, this underscores a critical insight: in premium food and beverage markets, ethical sourcing is not merely a compliance issue but a source of competitive differentiation and brand trust.
Starbucks Vision Beyond Coffee
Starbucks’ journey began with a vision that went beyond merely serving coffee. Howard Schultz, who joined the company in 1982, transformed Starbucks from a small coffee bean retailer into a beloved brand. His vision was to create a "third place" between home and work where people could gather, relax, and savor quality coffee in a welcoming environment.
This guiding principle is what drives Starbucks to focus on providing not just a product, but a cherished experience. For example, Starbucks locations often feature cozy seating, free Wi-Fi, and friendly service—elements that invite customers to linger longer.
The Power of Brand Identity
Starbucks has perfected the craft of brand identity. The iconic green mermaid logo is recognized worldwide and represents more than coffee; it embodies a lifestyle and commitment to quality. The brand's messaging emphasizes ethically sourced coffee, sustainable practices, and community engagement. As of 2022, 87% of Starbucks customers identify with its mission. This alignment with customer values has contributed to a loyal customer base that sees Starbucks as more than just a coffee shop.
Investment in Quality and Innovation
A major factor in Starbucks' success is its relentless focus on quality. The company sources the best Arabica coffee beans and has implemented direct trade practices to support coffee farmers.
Additionally, Starbucks continuously innovates its menu. Seasonal offerings, like the Pumpkin Spice Latte, have generated over 20 million sales each fall. This commitment to quality and creativity not only keeps the menu fresh but positions Starbucks as a leader in coffee culture globally.
Strategic International Expansion
Starbucks employs strategic international expansion, adjusting its business model to fit diverse markets while upholding its core values. Each international location captures local customs and preferences, which helps nurture a sense of community among customers.
In China, for instance, Starbucks introduced tea beverages and designed stores to offer a more tranquil setting, resonating with local tastes. This adaptable approach has allowed Starbucks to thrive across cultures while maintaining a stable international presence.
Community Engagement and Customer Loyalty
Another pivotal element in Starbucks' success is its commitment to community engagement. The company supports local coffee farmers and participates in community projects to build trust with its customers.
The Starbucks Rewards program has also greatly boosted customer loyalty. By offering exclusive perks and tailored experiences, this program encourages repeat visits. In fact, over 30% of Starbucks transactions come from reward members—illustrating the program's effectiveness.
Embracing Technology and Digital Innovation
In our digital era, Starbucks has successfully integrated technology into its operations. The Starbucks mobile app allows customers to order and pay ahead, significantly reducing wait times.
The app’s connection to its rewards program offers personalized promotions, enhancing customer engagement. Starbucks uses data analytics to understand buying habits, optimizing its menu and service accordingly. In 2022, mobile orders accounted for over 25% of total orders, showcasing the effectiveness of its digital integration.
Commitment to Sustainability
As concern for the environment grows, Starbucks has made sustainability a priority. The company has set major goals, like becoming resource positive by minimizing waste, conserving water, and committing to renewable energy.
In 2021, Starbucks pledged to reduce single-use cup waste by 50% by 2030. These initiatives resonate with environmentally conscious consumers, distinguishing Starbucks from competitors and reinforcing its position in the market.
Cultivating a Strong Company Culture
Behind every successful business is a motivated workforce, and Starbucks exemplifies this. The company has built a strong culture focused on employee well-being and growth.
Starbucks provides comprehensive benefits, including healthcare for part-time workers, education assistance, and advancement opportunities. According to surveys, over 70% of employees report being proud to work at Starbucks. Happy employees lead to outstanding service, creating positive customer experiences.
The Road Ahead
Starbucks serves as a powerful example of vision, branding, and adaptability in building a global business empire. With unwavering dedication to quality, innovation, and sustainability, the brand has not only survived but thrived—connecting with millions of customers worldwide.
As Starbucks continues to adapt in a changing marketplace, its mission to create a meaningful coffee experience will likely remain at the heart of its ongoing success. The invisible forces fueling this iconic brand offer valuable insights for businesses looking to make their mark in the global arena.
Global Adaptation, Cultural Sensitivity, and Market Penetration
Starbucks’ international expansion offers a nuanced model of globalization—one that balances brand consistency with local adaptation. While the core Starbucks identity remains recognizable worldwide, menus, store formats, and pricing strategies are often localized to reflect cultural preferences, consumption patterns, and economic realities.
In markets such as Asia, the Middle East, and Africa, Starbucks adjusted beverage profiles, food offerings, and even store layouts to align with local norms while preserving the essence of the “Third Place.” This approach enabled deeper market penetration without cultural alienation, a common pitfall for global brands.
From a strategic management lens, Starbucks illustrates that successful globalization is not standardization alone, but contextual intelligence—the ability to listen, adapt, and co-create value with local markets.
Starbucks’ journey reveals that coffee excellence at scale is not accidental. It is the outcome of deliberate choices—about people, place, ethics, and purpose—executed consistently over time. For South African coffee brands and emerging market players, the Starbucks case offers both inspiration and caution: excellence is scalable, but only when values, systems, and culture grow in unison.
2.5 Starbucks Timeline Anchors:
· 1971 – Founded in Seattle as a specialty coffee bean retailer
· 1987 – Howard Schultz acquires Starbucks; café experience model introduced
· 1990s – Rapid U.S. and international expansion
· 2000s – Institutionalization of the “Third Place”
· 2010s–Present – Ethics, sustainability, and global lifestyle branding
Starbucks did not globalize coffee; it globalized the coffee experience.
2.6 Conceptual Frameworks
Figure 1: Starbucks and the Experience Economy Framework
(Adapted from Pine & Gilmore, 1999)
Dimension | Starbucks Application |
Entertainment | Music curation, in-store ambience |
Education | Coffee knowledge, barista interaction |
Escapism | “Third Place” away from home/work |
Esthetics | Store design, aroma, visual identity |
Interpretation:Starbucks does not compete solely on product quality but orchestrates a multi-dimensional experience. This framework explains how price premiums are justified and loyalty sustained.
Figure 2: Value Creation Pyramid in Starbucks
Commodity – Coffee beans
Product – Espresso-based beverages
Service – Skilled barista interaction
Experience – Third Place environment
Meaning – Ethics, identity, belonging
Managerial Insight:Most competitors compete at levels 2–3. Starbucks competes consistently at levels 4–5.
2.7 Critical Counterpoint: Limitations of the Starbucks Model
While Starbucks is widely regarded as a benchmark of global coffee excellence, its model is not without structural limitations—particularly for emerging market brands seeking replication.
1. Scale vs Authenticity Tension
As store density increases, the risk of experience dilution grows. In mature markets, Starbucks has faced criticism for over-standardization, reducing the intimacy that originally defined the “Third Place.”
2. Cost Structure Vulnerability
Starbucks’ premium pricing relies heavily on discretionary consumer spending. During economic downturns, particularly in emerging markets, affordability becomes a constraint, opening space for local competitors with leaner models.
3. Cultural Transferability Limits
Not all societies consume coffee as a social ritual. In some markets, Starbucks’ experiential model competes with deeply embedded local café cultures rather than replacing them.
4. Ethical Expectations Escalation
Once a brand positions itself as ethically responsible, stakeholder scrutiny intensifies. Any perceived deviation in labor, sourcing, or sustainability practices carries reputational risk.
Strategic Lesson: Starbucks is a reference model, not a universal blueprint. Excellence must be contextualized, not copied wholesale.
Starbucks Story of Success:
A Story of Growth Awake as usual at 4:00 a.m., Starbucks CEO Howard Schultz sipped a cup of Tribute Blend coffee as he reviewed the galley proofs for his latest memoir—Onward: How Starbucks Fought for Its Life without Losing Its Soul. The quiet surroundings gave him an opportunity to reflect on the remarkable ride that had brought him and Starbucks to January 2011, the beginning of the company's fortieth year. During those four decades, Starbucks had grown from a single location in Seattle, Washington, to a multibillion-dollar enterprise that operated more than 17,000 retail stores in fifty countries. Originally selling only coffee beans and ground coffee, it had added to its offerings prepared coffee, Italian-style espresso beverages, cold blended drinks, food items, premium teas, and beverage-related accessories and equipment. Outside of its retail stores, consumers could purchase Starbucks-branded beans, instant coffee, tea, and ready-to-drink beverages in tens of thousands of grocery and mass merchandise stores around the world. 1 As he reviewed the company's many successes, Schultz remembered the words he had spoken to Starbucks' partner’s just days before as they celebrated their best holiday season ever: "We have won in many ways, but I feel it's so important to remind us all of how fleeting success and winning can be."
History When Starbucks was founded in 1971, coffee consumption in the United States had been on the decline for nearly a decade (Exhibit 1). Most American coffee drinkers drank home-brewed Folgers, Maxwell House, or Nescafé—grocery store brands of light roast coffee with the smooth flavor generally preferred by Americans. Away from home, they ordered coffee with a meal at a diner or restaurant, or on the go from a fast food outlet, convenience store, or gas station. However, in a few neighborhoods in San Francisco and New York, small local coffeehouses and specialty coffee roasters such as Peet's had recently been established. Starbucks was created in this mold with the aim to roast and sell great coffee
2.8 STARBUCKS: A STORY OF GROWTH
By 1982, Starbucks had five retail outlets that sold beans and supplies for brewing coffee at home, but not prepared beverages. It also had a roasting facility and a wholesale business. This growth attracted the attention of Schultz, then the vice president of the American subsidiary of Hammarplast, a Swedish housewares company that made plastic cone coffee filters for home coffee brewing. Schultz went to Seattle to find out why a small company called Starbucks ordered more of these filters than any other customer. He liked what he found and joined Starbucks later that year as director of retail operations. During a business trip to Milan, Italy, the following year, Schultz was struck by the city's ubiquitous espresso bars.
The bars served well-prepared espresso and brewed coffee and were important places for conversation and socializing. Schultz realized that America lacked similar places offering high-quality coffee in a comfortable setting for meeting and relaxing. He left Milan with a determination to create such an establishment in America. Schultz later dubbed this "the third place" beyond home and work, a term he borrowed from The Great, Good Place, a book in which sociologist Ray Oldenburg laments the decline of traditional American community meeting places like country stores and soda fountains. 3 Starbucks' management, however, was not receptive to the idea of selling prepared drinks, turning Schultz down with the explanation that getting into the "restaurant business" would distract the company from its core assets and activities: roasting and selling coffee beans.
In 1986 Schultz left Starbucks to open Il Giornale, a café selling espresso, espresso-based drinks such as cappuccino, and food items, in addition to whole-bean coffee. Il Giornale attracted 1,000 daily customers within six months, prompting Schultz to open two more locations. Despite his success, Schultz faced skepticism from investors—when he was trying to raise $1.25 million to fund his expansion, Schultz was turned down by 217 of the 242 potential investors he approached, many of whom expressed concern that he had no patent on his dark roast, no special access to coffee beans, and no way to prevent someone else from imitating his concept. 4 In 1987 Il Giornale acquired Starbucks, including its retail outlets, coffee roasting facilities, and wholesale operation. Schultz rebranded the existing stores with the Starbucks name.
The first Il Giornale had been a virtual copy of a Milanese espresso bar, complete with bow-tied waiters, a stand-up coffee bar, and sleek European furniture. By contrast, the new Starbucks-branded locations were decorated in earth tones with overstuffed chairs, wood floors, and cozy fireplaces that encouraged patrons to linger and relax. 5 Starbucks coffee was different from the coffee most Americans were used to consuming.
In addition to being much more expensive, Starbucks coffee had a taste unlike typical American coffee. Starbucks roasted its beans in its own carefully controlled facility, where they were given a robust European-style flavor derisively called "Charbucks" by some,6 and then shipped them whole to its stores where they were ground immediately before brewing to ensure maximum freshness, flavor, and aroma. Starbucks espresso drinks were also prepared in a different way: a barista, a master of both the art and science of coffee production, "pulled" shots of espresso by hand using a La Marzocco machine, steamed milk to just the right temperature, and scooped elegant dollops of foam for cappuccinos, all while chatting with customers about the different varieties of Starbucks coffee.
In a nod to the heart of coffee culture, Starbucks invented a quasi-Italian lingo for its drink sizes (short, tall, grande, and venti) and the drinks themselves (e.g., Caramel Macchiato and Frappuccino). No matter how a customer ordered, counter clerks were trained to repeat the order using the correct terms in the Starbucks-specified order. Their tone was described as "not one of rebuke, but nevertheless most customers learn to avoid the implied correction by stating their order in the way that helps Starbucks's operations. . . . Indeed, for some customers, getting the order right is an aspiration, a small victory on the way to the office." 8 By 1996, the Starbucks mermaid logo appeared on more than 1,000 stores. Starbucks selected its locations carefully, targeting areas with large numbers of wealthy and highly educated professional workers. These were the new American elite—dubbed "bobos" (bourgeois bohemians) by commentator David Brooks—who used consumption as a way to distinguish themselves from the less enlightened masses.
Soon, more and more American consumers aspired to emulate the coffee drinkers that were first attracted to Starbucks. "Customers believed that their grande lattes demonstrated that they were better than others—cooler, richer, and more sophisticated. As long as they could get all of this for the price of a cup of coffee, even an inflated one, they eagerly handed over their money, three and four dollars at a clip."10 As Roly Morris, one of the team that helped bring Starbucks to Canada, observed, "We're offering a lifestyle product . . . that transcends the usual barrier. Maybe you can't swing a Beamer [BMW] . . . but most people can treat themselves to a great cup of coffee." 11 Starbucks Expands (1996-2006) Beginning in 1996 Starbucks embarked on a significant wave of growth by concurrently executing two initiatives: (1) selling Starbucks products through mass distribution channels, and (2) dramatically expanding its retail footprint. Schultz played an important role in both initiatives, first as CEO until 2000, and thereafter as chairman and chief global strategist.
Selling Through Mass Distribution Channels The first product Starbucks sold through mass distribution channels in the United States was its bottled Frappuccino coffee drink, brought to market through a joint venture in 1996 with Pepsi-Cola North America. The arrangement drew on Pepsi's expertise in managing store supply and demand but allowed Starbucks to retain control over the development and sale of its products.12 Around the same time, the company partnered with Dreyer's to produce a premium coffee-flavored ice cream. Soon after, Starbucks began to test market Starbucks-branded coffee beans and ground specialty coffee in grocery stores and supermarkets. In 1998, approximately a year after market testing, Starbucks coffee was on the shelf in approximately 3,500 supermarkets in ten West Coast cities.
13 On September 28, 1998, Starbucks announced a long-term exclusive licensing agreement with Kraft Foods "to accelerate growth of the Starbucks brand into the grocery channel across the United States."14 The agreement gave Kraft responsibility for all distribution, marketing, advertising, and promotions for Starbucks whole bean and ground coffee in more than 25,000 grocery, warehouse club, and mass merchandise stores. 15 Kraft was the largest coffee seller in the United States. Its grocery store brands Maxwell House, Yuban, and Sanka sold at much lower prices than Starbucks. In 1998, a 13 oz (375 g) can of Maxwell House sold for approximately $2.50, while a 13 oz (375 g) bag of Starbucks beans was priced at $7.45. Kraft's higher-end brand, Gevalia, was only available by mail order.
In 1998 Starbucks sold approximately $50 million of whole bean and ground specialty coffee in grocery stores (compared to approximately $1 billion in sales for Maxwell House and $1.3 billion for Folgers in the same year).17 By 2010 Starbucks coffee sales in grocery stores had grown to $500 million (a 10 percent increase over the previous year). In the same year, the sales of Folgers, the market share leader, fell by 2.1 percent. The sales of Maxwell House, the number two ground coffee brand, grew by only 2.8 percent to approximately $1.5 billion. 18 In addition to moving into mass distribution channels, Starbucks also expanded its product distribution through licensing agreements. It concluded an agreement in 1995 to provide coffee on all United Airlines flights, and in 2001 agreed to provide Starbucks coffee for all restaurants, room service, and meeting rooms at Hyatt hotels. By 2008, 16 percent of Starbucks revenues came from sources other than its company-owned retail stores.
Dramatically Expanding Retail Stores
By 1996 Starbucks had opened just over 1,000 stores. Within five years, that number had grown to nearly 5,000 (Exhibit 2). In 2007 Starbucks operated 15,000 stores and in the same year publicly announced a goal to open 40,000 locations worldwide, with 20,000 in the United States alone. (In the same year, McDonald's operated approximately 14,000 restaurants in the United States and 31,000 locations worldwide.20 ) The expansion of Starbucks attracted media attention, not all of which was positive.
On April 1, 1996, National Public Radio aired a satirical report that "Starbucks will soon announce their plans to build a pipeline costing more than a billion dollars, a pipeline thousands of miles long from Seattle to the East Coast, with branches to Boston and New York and Washington, a pipeline that will carry freshly roasted coffee beans."21 The Onionlampooned the growth of Starbucks stores in 1998 with the mock headline, "Starbucks, the nation's largest coffee-shop chain, continued its rapid expansion Tuesday, opening its newest location in the men's room of an existing Starbucks." 22 Schultz was undeterred by critics. Reflecting on the company's growth in 1998, he commented.
Customers don't always know what they want. The decline in coffee drinking [in the years before Starbucks existed] was due to the fact that most of the coffee people bought was stale and they weren't enjoying it. Once they tasted ours and experienced what we call "the third place" . . . a gathering place between home and work where they were treated with respect . . . they found we were filling a need they didn't know they had.
In conjunction with this expansion, Starbucks made some operational changes. First, the La Marzocco espresso machines Starbucks had used since its inception were replaced with push- button Verismo models. This decision simplified the hiring and training of baristas since the Verismo machines produced a uniform product with less operator training. They also reduced the time to pull an espresso shot from sixty seconds to thirty-six seconds, helping stores meet the company's stated goal of serving every customer within three minutes.
On the other hand, the height of the Verismo machines' grinding apparatus blocked the customer's view of the barista, and the simplicity of the machine eliminated much of the romance and theater that accompanied a barista's customized preparation of each order. Some longtime customers insisted that the new machines produced inferior espresso. Another change involved the coffee beans. Delivering a consistent Starbucks flavor required that the beans be roasted centrally and distributed to the global network of stores. There they were ground just before brewing in order to preserve the volatile oils that produced the best-tasting—and smelling—coffee. However, measuring and grinding beans for every pot of coffee was time consuming and hampered a store's ability to meet the three-minute service goal. As a result, Starbucks stopped shipping coffee to its stores as whole beans to be ground throughout the day and instead shipped air-tight packs of pre-ground beans that it claimed would maintain their flavor for one year.
In addition to these easily observable changes, one observer suggested that as it expanded, Starbucks "skimped on quality [of the coffee beans it purchased] knowing that its trademark dark, smoky roast covered up imperfections, and added: "In its mission statement, Starbucks pledged to serve the 'finest coffee in the world,' but its need for mountains of beans have made this impossible." The look and feel of the stores was also affected by the dramatic growth in their numbers. In order to lower store-opening costs, in 1996 Starbucks limited new stores to four standardized design templates, each of which allowed for limited variation in materials and details.
Growth also exposed weaknesses in operations and supply chain management. Stores regularly ran out of ingredients—such as flavored syrups and bananas—that were necessary to meet customer demand. Merchandise displays in the stores were inconsistent—even as Starbucks expanded the variety of non-coffee merchandise it sold, some of its stores did not carry basic coffee-making items such as filters and French presses. According to Schultz, "in 2008 the chance of a store getting everything it asked for on time and intact was about 35 percent, and it was highly likely that every day, thousands of stores were out of something."
Information technology was much the same. Each store had a computer in its office, but it generally could not run spreadsheet software, access the Internet, easily send e-mails outside of the company, or send or receive e-mail attachments.
The lack of Internet connectivity as late as 2008 was particularly ironic given Starbucks' popularity among its customers as a Wi-Fi hotspot. Cash registers ran MS-DOS software that required drinks to be entered in a predetermined order: size, drink name, and then additions such as syrup or an extra shot of espresso. Any deviations to this sequence required the entire sale to be voided and re-entered.
During this period, Starbucks broadened its business, starting with a foray into music. This began with the marketing of compilation CDs of music played in its stores, but the company quickly expanded into selling entire kiosks full of music, and even produced an album—the award-winning Genius Loves Company featuring Ray Charles—that sold more than 32 million copies, percent of which were purchased at its stores. Buoyed by this success, Starbucks moved into book publishing and movie production.
Starbucks Pursues New Growth Initiatives (2009-2011) Starting in 2009 Starbucks undertook three new growth initiatives outside of its retail coffeehouse presence. First, it made several moves to expand its presence in the "away from the store" coffee market. Second, it pursued coffee initiatives outside of the Starbucks brand. Finally, Starbucks acquired a supplier that moved it into the business of manufacturing high-end coffee brewing equipment. Sources: https://www.cliffsnotes.com/study-notes/19145647
2.9 Chapter Conclusion: From Starbucks to McDonald
Starbucks demonstrates how meaning, culture, and experience can elevate coffee beyond commodity status. Yet cultural resonance alone does not explain sustained global dominance. The ability to replicate experiences with precision, discipline, and operational consistency across thousands of locations remains equally decisive. The next chapter therefore shifts from the experiential to the operational, examining McDonald’s—arguably the most systematized food service organization in history—to understand how process, standardization, and execution enable global scale without sacrificing reliability.
About the Curator and Author: Salman Khan is a Barista judge, social entrepreneur, food and drink anthropologist, researcher and culinary educator. To access 2024 coffee consumer survey report in South Africa please send an email to buy a copy of it.
Salman Khan Paul Harris Fellow, T.I.
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A. Academic References
Key References
Pine, B. J., & Gilmore, J. H. (1999). The Experience Economy: Work Is Theatre & Every Business a Stage. Boston, MA: Harvard Business School Press.
Peters, T., & Waterman, R. H. (1982). In Search of Excellence: Lessons from America’s Best-Run Companies. New York, NY: Harper & Row.
Schultz, H., & Yang, D. J. (1997). Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time. New York, NY: Hyperion.
Schultz, H. (2011). Onward: How Starbucks Fought for Its Life Without Losing Its Soul. New York, NY: Rodale.
Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York, NY: Free Press.
Starbucks Corporation. (2023). Global Environmental & Social Impact Report. Seattle, WA.
World Coffee Portal. (2023). Global Coffee Chain Market Report. London, UK.
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