What Makes Starbucks a Giant: It’s Not Actually a Coffee Shop!

Do you think that the only way to turn the famous coffee shop you stop by when you crave a cup of coffee and maybe a cookie, to become the giant it is today, is to sell coffee only? This article will surprise you.

In a thread we did recently McDonalds We explained that the source of his wealth is not selling hamburgers. There is another company that rises from an area like McDonalds that seems to be very unrelated to its business: Starbucks.

Come, once upon a time coffee roaster in one shop Let’s see how the company founded by three friends turned into one of the most well-known coffee chains in the world today, and how it changed the balance in different sectors.

Starbucks didn’t serve coffees at first.

When Starbucks was first established, there were no such drinks as Pumpkin Spice Latte or Frapuccino. Already Starbucks coffee bean He was selling, that is, he was a kind of American Kurukahveci Mehmet Efendi. Jerry Baldwin, Zey Siegl and Gordon Bowker What changed the fate of the company founded by Howard Schultz it happened. Schultz, who managed to get himself into the company as the sales and marketing manager, became the name that changed the future of Starbucks.

Schultz, who went to a coffee shop in Milan, Italy, thought of Starbucks. convert to coffee chain That’s where the idea came from. The founders of the company did not take kindly to this idea at all. Thereupon, Schultz, who took a group of investors behind him in 1985-86, bought Starbucks and the Starbucks we know today emerged.

Starbucks grew rapidly during this period, until it went public in 1992. in 140 different locations started to serve. In 1994, that number tripled. 1996 was the year we saw the 1000th Starbucks and the first store outside the USA (Japan). by the year 2000 When the company arrived, the company had around 3000 stores.

Running to Starbucks, four minutes from home: The Frapuccino Effect

frappuccino effect

On the other hand, in 2000, Howard Schultz rose to the presidency of the company, while Orin Smith left the CEO seat. During the Smith era, the firm opened roughly 1,500 new stores each year. The size of the company in this process more than four times It increased.

In this period, it is necessary to open a separate paragraph for the company’s real estate investment choices. Starbucks, of optimizing (I promised to explain this in the McDonalds article, I swear I will tell you) began to be seen as a castle. In addition, to places with high valuation potential, one of the first brands remembered as one. Even to this Frappuccino Effect was named. In summary, if there was a Starbucks near a real estate, the value of that real estate would increase significantly.

Of course, since it is not without a lot of lies, not much growing pains. Starbucks Of course, there are also problems during this period. Chief among these was the company’s putting customer experience and coffee quality on the back burner during the rapid growth process under the management of Orin Smith. 2008 crisis along with Starbucks received serious injuries. Thereupon, Schultz returned as the CEO of Starbucks.

Howard Schultz didn’t just like doing coffee shops business, either

howard schultz

Schultz, who did not like the job of selling only seeds at first and changed it, also continued during his second CEO period. don’t just sell drinks and tired of closing shops in beautiful places. Instead, he decided to turn the firm into a bank, or even a fintech bank.

“What is the vision?” The CEO, who almost answered the question, first CTO (CEO’s minister of technology affairs) has been hired. After this recruitment, Starbucks launched its loyalty card program. At first, this program was no different from the others. Shopping with a card had small advantages, you could drink a free coffee once in a while or get small discounts.

Starbucks’ amazing invention here also makes cards money loading vehicles it became. Money can be loaded onto the card and this money can be used for Starbucks products. On the other hand, it is not possible to withdraw money from the card except in very rare cases. Which brings us to the next point:

Starbucks: coffee bank


Take the money we load into our Starbucks cards or mobile apps. This money is now of Starbucks money, they promise us coffee in return. We also collect stars when we use the app. If there is no campaign etc, we earn 1 star for each drink, and we get a free coffee on our birthday. In this respect, the application has consumer-friendly features.

On the other hand, the money in only at Starbucks passing. So it is not possible to use the money elsewhere. In this case, users actually lend the money in their accounts. The brand with thousands of branches, 30% of its sales By doing so with Starbucks cards or accounts, it provides an additional $1.5 billion per year.

Of course, the interest paid by the company to its customers in return for this amount. 0%. If it had received $1.5 billion as an investment loan from the United States, the firm would have approximately 50 million dollars would pay interest. Moreover, this is not the only advantage of the program.

Average amount of money entering the system 10% of forgotten, lost or somehow not used. This amount, which is included in the balance sheets, can be translated into Turkish as “loss value” in general. $150 million annually finds it. So Starbucks stays in the position of owner of this money without doing anything. .

There is also more money in Starbucks’ vault than in banks in general. thousands of banks in the USA. Its total assets do not reach 1 billion dollars. Also, the fact that people gift each other Starbucks cards means that money can change hands without leaving the company ecosystem.

So what will Starbucks do now?


The CEO of South Korea’s third-largest financial group said in a statement that Starbucks’ an unregulated bank He said it was a coffee shop and not just a coffee shop. According to another bank, the firm actually fintech firm. So what will Starbucks do in the future?

There is so much that an organization with such great financial strength can do. A little “I wish it was me” To give an example, as an institution with such a wide network and holding balances of different types, for international roaming I would make it fit. Afterwards, paving the way for Starbucks card use in agreements with different brands and enter the insurance industry can take place. Of course, these are my views, there is no news that the company has such a plan.

As you can see, even though large companies seem to be doing a single job, large and complex operations take place in the background.


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