Wednesday, February 13, 2008

Starbucks got the memo

Starbucks' CEO Howard Schultz is taking the right steps to get the coffee house back on track.

One simple conclusion: Howard must have read my earlier posting urging him to rediscover Starbucks' role as the Third Place. ;)

Starbucks has announced its plans to close 100 underperforming stores (do we need one on every corner?), stop selling breakfast sandwiches (when I step into Starbucks I want to smell coffee, not bacon), and on February 26 retrain all baristas nationwide on the lost art of making a good espresso (clearly Howard visited a Peet's coffee shop and tasted the difference). The chain also announced a new partnership with AT&T to offer free wi-fi to customers using a Starbucks card (as I suggested back in November).

Bravo to Howard Schultz. It's not often we see a CEO with the passion and courage to right the ship with bold, swift actions. Most rely on exhortations and firings.

2 comments:

Todd Fraipont said...

I've always been disappointed when a great company/brand begins to try to be things they're not. Like in your posting, Starbucks trying to bring the egg McMuffin to it's customers. I guess I understand that they are under constant pressure to grow, and getting people to drink even more coffee than the 10 cups per day they're already drinking may not be feasible, so they turn to other things outside their core compentency. But often times the result is eroding away the brand and the very reason you have customers in the first place.

A question I have, in the world of business/marketing today, what's so wrong with NOT trying to grow huge percentages year after year? What's so wrong with consistently knocking it out of the park with in terms of your core competencies, end of story? I realize that if you're a public company there are a different set of rules in terms of shareholders' expected/demanded growth. But for the others...

...is it possible to continue to succeed and stay on top without continued growth year after year after year?

I'm just a lowly media guy, so I don't know the answers to these deep marketing questions :)

David Murphy said...

Memo to "lowly media guy"...you've asked the smartest question to date! Growth is not the problem, but brand-diluting growth certainly is. Target grows nicely. Ditto for Best Buy and Apple. All three are examples of companies that know their core competency and find ways to apply it to new businesses.