The Location or Place

Given the rapid pace of expansion of the retail stores that the company has set for itself Starbucks employs the services of 200 store designers along with contractors property mangers financial mangers, operations staff developers and a half dozen law firms around the country, to follow well defined guidelines that move a potential store location to serving customers lattes. The process ideally takes 26 weeks flat. The development team has the task of successfully completing this process more than four times each day.

Parameters for a desirable location are laid down by the company with respect to the size of the store and the profile of the target population. The demographic and psychographics of the population, along with the level of pedestrian and vehicular traffic are considered important for a specific site to be considered.

The store designs created are always culturally sensitive, for example in predominantly Muslim countries such as Saudi Arabia, where Starbucks stores offer sex segregated seating. The site being considered also has to accommodate the company’s trademarked, 15 letters Starbucks Coffee logo. Starbucks decides to take on a particular site and the design and lease are complete a construction crew takes over for a brief five to seven week build out of the store. Six weeks later, the sore is handed over to operations and four days later, Starbucks is serving lattes to customers.

Very often Starbucks sites are found across the road. Howard Schultz states that this was not part of a master plan and happened by chance. The company operated one of its busiest stores in downtown Vancouver in a 1,000 square foot space. Eventually it became too small fro its level of traffic and service levels suffered. Then, a bigger location across the street came up for event, which the company finally decided to take up. The original store experienced 10 to 15 per cent sales dilution for the first year in which both stores were in operation but within 18 months the two had developed different customers’ profiles and were in positive sales territory. We’ve repeated that strategy countless times, he says.

The layout of the stores is more or less standardized with sections clearly demarcated where the sale happens and the other area which is termed as the back area. Unless very small the store also has a cafe section where the customers can sit down with their drinks.

The café section is often provided with several comfortable stuffed chains, and several tables with hard backed chairs. There are ample electrical outlets providing free electricity for patrons using or charging their portable music devices or laptop computers. It is not uncommon to see people conducting their work from a Starbucks café section for house at a time.

The people

From the very beginning Starbucks wanted to be the employer of choice, a company that everybody wanted to work for. Howard Schultz aimed at creating a company culture that cared about its employees. For example if gives stock options to every single person who works more than 20 hours per week – the vast majority of its employees – and has been doing so since 1990. The baristas (employees are referred to as Partners) in each store, work in different shifts throughout the day, usually divided into two (AM and PM) or three (morning, afternoon, evenings) shifts. Each shift usually has two or four baristas (the number may change, depending on customer flow of the specific store), who share different duties throughout the shift.

Schultz say one thing he has learned over the years is everything Starbucks employees do in front of customers’ matters. He says the company started out with a philosophy of acquiring and roasting the highest quality coffee in the world and delivering it fresh to its customers. But it has evolved to include the way in which it’s delivered the style, the elegance the environment the relationships its people have with customers and the trust staff have built with customers.

Starbucks does not look at the brand as a piece of advertising but everything communicates what Starbucks is. The place, the physical environment really, has become an extension of the brand and it’s very important to the success of the brand and the company.