Globalizing Coffee Culture: The Case of Starbucks

Kai-Ingo Voigt, Oana Buliga and Kathrin Michl
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Kai-Ingo Voigt: Friedrich-Alexander University Erlangen-Nürnberg
Oana Buliga: Friedrich-Alexander University Erlangen-Nürnberg
Kathrin Michl: Friedrich-Alexander University Erlangen-Nürnberg

Chapter 5 in Business Model Pioneers, 2017, pp 41-53 from Springer

Abstract: Abstract In the early 1970s, the U.S.A. was the largest coffee consuming country in the world, offering an enormous market potential for new entrants. However, a few large established players were already dominating the market, for instance Procter & Gamble. During the 1960s, P&G took over its competitor, Folgers Coffee Company, and started to distribute coffee under this brand nationally. Soon after, Folgers became the top U.S. coffee brand. Yet the business models of P&G and Folgers were fully different from the one envisioned by Starbucks: the incumbents saw coffee as a beverage like any other. Their value proposition was instant and roasted coffee, sold in supermarkets, and intended for home brewing. No efforts were put into establishing a genuine coffee culture, for which Starbucks later became renowned. Americans of that time also did not view coffee shops in the sense of a community, or as a socializing possibility, and Italian-style coffee bars were barely known on the home market. Schultz sensed this as an opportunity to create a place for social interaction, and the high customer numbers enjoyed by the Starbucks stores from the beginning confirmed his intuition.

Keywords: Business Model; Coffee Bean; Coffee Shop; Instant Coffee; Rainforest Alliance (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/978-3-319-38845-8_5

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