Starbucks' 'Third Place' Strategy Derived From Howard

Starbucks' 'third place' strategy derived from Howard Schultz' experience in Milan, where he saw how the coffee shop could serve this role, and how the comfortable environment attracted customers. Starbucks decided to cultivate this third place with a number of key policies. The first is that the company needed outlets with ample seating in order to facilitate a large number of customers in the establishment at any given time.

The staff needed to be oriented to allowing customers to remain in place for long periods of time as well, so some training was required in order to implement this strategy. In addition, the design and layout of the stores was important. Starbucks stores need to feel comfortable, so that people are encouraged to linger. This creates an atmosphere that other customers pick up on, and becomes part of the culture of the company's stores.

The company has also supported this with its strategy towards music, which is generally anything but abrasive, as well as its policies towards computers (having plugs) and Internet (now offering free Wifi). The objective of the third place strategy was to make Starbucks a comfortable place, something that many coffee shops lacked in the U.S. prior to Starbucks. By creating this environment Starbucks attracts customers to come to the stores more often. Other elements of the strategy play into the third place.

The rich desserts that Starbucks offers are part of the package that encourages relaxing, for example. In addition, the casual atmosphere among the staff is critical. If the stores had stressed-out or incompetent staff the atmosphere would be noticeably less enticing. The third place strategy has proven critical to the company's success is most markets. In Japan and China, where city-dwellers often live in cramped apartments, the third place was a legitimate need, especially as there is no pub culture there.

Consumers in these countries have responded with their patronage, even though they typically are not from coffee-drinking cultures. The third place has also resonated in North America, putting the "break" in coffee break. As the company grows, certain elements of the culture become harder to maintain. The casual, cozy atmosphere is difficult to maintain when the company's stores are produced and furnished on a massive scale. Creating a unique identity for each store while maintaining its identity as a Starbucks is especially difficult. This challenge also exists with the staff.

The staff is a critical component of the atmosphere in a Starbucks staff, but it can be a challenge to find good staff on the scale that Starbucks requires. In addition, the.