The Big Gulp at Starbucks

By BARBARA KIVIAT / SEATTLE
Posted Sunday, Dec. 10, 2006

Starbucks fancies itself a small company, which might ring a little odd, considering that the coffee giant is regularly parodied as being practically unavoidable. Well, the joke is only going to get funnier as the Seattle firm, with its shareholders clearly in mind, gets even bigger, selling more stuff, from hot food to hot music, in more places than ever before. Right now Big Green runs 12,440 locations worldwide, but the goal is 40,000, which would trump even McDonald's.

But McDonald's doesn't try to behave like a chain of boutiques, and that's where the tension inside Starbucks lies. "The battle within the company is making sure growth doesn't dilute our culture," says founder and chairman Howard Schultz. In the Starbucks ethos, the best authority is decentralized, and the best decisions are made store by store. The company stays clear of focus groups, acts on its instincts and doesn't open franchises for fear of losing control. Schultz decided to sell the New York Times, not USA Today, in stores because, he says, "it felt right." If he or another senior exec doesn't like a new drink concoction, it doesn't get sold. How's that for research?

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