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1. The author’s purpose in writing this selection is to
a. persuade possible entrepreneurs to go into business for themselves.
b. give a general discussion of Starbucks’ growth.
c. criticize Starbucks for setting their prices too low, thereby undercutting
competition.
d. compare and contrast Starbucks with other major coffee retailers.
2. The main idea expressed in this selection is
a. Starbucks has created a warm and friendly environment at all its outlets.
b. Coffee bars are located around the world.
c. Starbucks has risen to a world leadership position in coffee sales.
d. Starbucks practices social responsibility.
3. The tone of this selection is
a. surprised and amazed
b. formal and stiff
c. informative and enlightening
d. appreciative and grateful
4. The dominant pattern of organization used in this selection is
a. definition and example
b. chronological order
c. listing
d. classification and division
5. The tone of the last paragraph is
a. positive
b. solemn
c. doubting
d. elated
6. The transition word also in paragraph 7 indicates
a. addition
b. contrast
c. example
d. summary
True or False
7. Venture in paragraph 4 refers to a “business enterprise.”
8. According to the selection, Starbucks focused on attracting middle-aged customers.
9. Starbucks expanded its operation in China by selling tea.
10. Howard Schultz opened up stores in the United States before expanding

Starbucks coffee shops are now found everywhere, even in supermarkets. The following
selection gives a brief history of the founding of the company and its global expansion.

Starbucks

1) Starbucks Corporation was founded in Seattle’s open-air farmer’s market in 1971. In
1982, Howard Schultz joined Starbucks as director of retail operations and marketing. After
visiting Milan, Italy, with its 1,500 coffee bars, Schultz saw the opportunity to develop a
similar retail coffee-bar culture in Seattle. He began his own downtown Seattle coffee bar
serving Starbucks coffee and espresso beverages. Based on the coffee bar’s success,
Schultz acquired the assets of Starbucks and began opening stores across the United
States in 1987.
2) Since its start-up in 1971, the company has done things its own way, becoming an
industry pioneer in employee management and social responsibility. Starbucks extends
health benefits to all employees, including part-timers, and provides a stock option program
worth 12 percent of each employee’s base pay. This policy has kept employee turnover
rates well below those of competitors and granted the company a spot on Fortune
magazine’s annual list of the “Best Places to Work.” The company enjoys an excellent
reputation in Latin America as a result of its focus on environmental conservation and the
welfare of farmers who grow its coffee. Starbucks pays better-than-market-value prices for
coffee beans so that Latin American farmers can afford to treat their laborers well. Its efforts
have been well rewarded with annual sales in excess of $1 billion as well as growing
acceptance around the world.
3) Starbucks reversed a downward trend in the consumption of gourmet coffee that
started in the early 1960s. The Starbucks Coffee bar created a warm environment where
people could relax and socialize over coffee and coffee drinks. Starbucks became a stylish
environment that attracted younger customers who discovered coffee drinks after years of
cola drinks.
4) In its company operated retail stores, Starbucks sells whole bean coffees and coffee
related accessories and equipment. Starbucks also sells products through its catalog, mail-
order service, and the Internet. Starbucks re-signed joint ventures with Pepsi-Cola to sell a
bottled version of the Frappuccino blended beverage and with Dreyer’s to sell six flavors of
Starbucks Ice Cream and Frozen Novelties. Starbucks Ice Cream became the No. 1 brand
of coffee ice cream in the U.S. Starbucks signed an agreement with Kraft Foods to
distribute whole bean coffees through 30,000 supermarkets and this market is growing.
5) The company already has more than 1,500 shops in 28 countries, and it opens an
average of three new stores every day somewhere in the world. In Japan alone, it serves
more than 2 million customers a week. Starbucks exceeded its goal of opening 5,000
stores by 2005. The company recently opened its first stores in Turkey, Oman, and Chile.
In China, a tea drinking nation, Starbucks hopes to develop coffee drinking among the
locals, as well as cater to international customers. Hoping to reach the average consumer,
prices have been set very low in comparison to local competition. For instance, a cup of
house blend coffee sells for 9 Yuan compared to 22 Yuan ($2.66) for local coffee. Today
Starbucks has 500 stores in 12 Asian countries and a total of a 1,000 stores in 22 markets
outside the U.S. The quality of the product and the brand has made Starbucks a global
product.
6) The company’s goal is to establish Starbucks as the most recognized and respected
brand of coffee in the world. To achieve this goal, the company plans to expand retail
operations, grow its joint ventures and specialty sales, and leverage the Starbucks brand
through the introduction of new products and the development of new ways to distribute its

products. Starbucks serves 230 million customers in its stores each week and this figure is
growing.
7) While striving to meet its goal, Starbucks has maintained an excellent reputation for
social responsibility and business ethics. Starbucks donated $1 million to the September
11 th fund immediately after terrorist attacks in New York and Washington, D.C. Cash
contributions to this fund to assist victims and their families were accepted at all company-
owned Starbucks stores. The company also is committed to a role of environmental
leadership in the coffee industry. Starbucks developed a global code of ethics to protect
workers who harvest coffee and maintains efforts aimed at increasing the income of small-
scale coffee growers. The company provides employees (even part-timers) with the
opportunity for stock ownership. In addition, the company supports philanthropic efforts
through a nonprofit foundation.
(Ferrell, O.C., and Hirt, Geoffrey, Business: A Changing World, 5 th ed., New York: McGraw-Hill, 2006, p. 29.)