Featured Business Leader Howard Schultz
This week’s featured business leader may not be a name you’ll know, but it’s highly likely that you will know the brand he has built around the world. Howard Schultz is the CEO of Starbucks Coffee, a world leader in the food and beverage industry and a globally-recognised brand. With over 20,000 Starbucks stores scattered through 63 countries, it’s easy to see why he is seen to be a great business leader.
Howard Schultz was born in Brooklyn, New York in 1953. A naturally gifted athlete, his sporting talents were his ticket out of the neighbourhood he grew up in, and he worked hard throughout high school to earn an athletic scholarship to Northern Michigan University in 1970.
He juggled studying and playing at Northern Michigan University, and eventually he was awarded a Bachelor of Science specialising in Communication in 1975. After an impressive stint in sales and marketing at leading technology company Xerox, Howard Schultz attracted the attention of Swedish housewares company Perstorp AB, who approached him to become the vice president of their American subsidiary, Hammerplast USA.
Hammerplast USA specialised in espresso machines, and Howard Schultz had noticed that a small business in Seattle called Starbucks was buying a large number of Hammerplast products. He decided to fly to Seattle to investigate what the company was up to, and discovered that the products were being used in four separate Starbucks outlets. The first Starbucks store was founded in 1971 near Seattle’s well-known Pike Street Market by three friends -Jerry Baldwin, Gordon Bowker and Zev Siegl. The co-founders, who were also managing their business at the time, were impressed with Howard’s business knowledge and enticed him to join the company in 1982, as the Head of Marketing and Retail Operations.
The run to the top of the Starbucks ladder was not entirely smooth for Howard Schultz. After a vacation in Italy, he returned to Seattle with great ideas for building Starbucks into a series of ‘espresso bars’, in a format similar to that found in Milan. When his business partners were hesitant to change their ways, Howard elected to leave Starbucks in 1986 and build his own competitor, an espresso bar called Il Giornale. His business was booming, but he did not have the funding to secure further locations. Whilst rounding up investors in the Seattle area, the original founders of Starbucks – Jerry Baldwin and Gordon Bowker – decided to sell the chain they’d built. With help from his investors, Howard Schultz bought the chain he previously worked for and began to build the Starbucks empire.
The business slowly began to offer more exotic drinks in addition to basic coffees, including espressos, mochas, lattes and cappuccinos. Additionally, each store became known as a location to sit and enjoy a drink or meet with friends – building the social vibe that Howard Schultz was aiming for after his experiences in Milan.
Starbucks has continued to grow from strength to strength since its re-birth in the 1980’s. By 1998, there were more than 2,200 Starbucks stores across America, and the brand was synonymous with coffee.
In 2000, Howard Schultz announced that he was resigning his position as CEO of the Starbucks Coffee Company, but retained his good fortune. In his time off, he sat on many boards for leading American companies before resuming the role as CEO of Starbucks in 2008 to ensure that his company continued its success.
Today, there is no other single company that sells more coffee drinks to more people in more places than Starbucks. By 2014, Starbucks had more than 21,000 stores worldwide and a market value of more than $60 billion. The incredibly popular coffee company reportedly opens two or three new stores every day and attracts around 60 million customers per week.
What is your opinion on the Starbucks Empire, and the rise of Howard Schultz? Are you impressed by their branding efforts and the reach they have across the world? I’d love to hear your thoughts!
This article was written by Simone Ball on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources have been used to prepare this article: Biography, Wikipedia and Entrepreneur. Image sourced from MSNBC.