Provocative Starbucks Commentary

Following the recent Starbucks news of more store closures, more layoffs, and more meandering into convoluted sales initiatives, Kevin Coupe says Howard Schultz must go. His argument breaks down the issues with Howard’s near-sighted business vision. It’s provocative and worthy of reading. Here's a snippet...

"It is my sense that Starbucks has lost its way, and that blaming the economic downturn misses the point. After all, great brands and great thought leaders find ways to transcend these kinds of challenges, profound as they may be. They find ways to reinforce the differential advantages of the brand, and to see the challenges and opportunities for strategic innovation.

Since Schultz took back the reins of the company a year ago, it has seemed like management has embarked on a series of tactical decisions designed for short-term fixes rather than long-term growth

This is not a diatribe against Howard Schultz. He should be lauded for his vision and service to the company. He should be praised for the fact that he was willing to give up his million-dollar-plus salary and work for a dollar a year while getting the company back on track. But it is time for a change, to someone who can think and act strategically rather than tactically." ***READ MORE***

[hat tip to Paul Williams]

Comments

[Jackie Huba]

I absolutely agree.

But also a funny story: I've been to Starbucks more in the past month than in the entire year and a half in Austin. Need wi-fi while getting car fixed recently. Spent an hour at Starbucks on S Lamar. Tasted sample of a new Tea Latte. Pretty good. Went BACK there last week to get another one.

Not sure Tea Lattes are gonna save them though : )

[Charles]

Although, I strongly dislike Schultz for selling the Seattle Sonics to Oklahoma, I have to disagree. Getting rid of Schultz is like getting rid of Bill Gates or Steve Jobs. Starbucks needs a leader that is proven and makes smart marketing decisions in these tough times.

[Dominique Hind]

I agree. The unfortunate thing is that in light of all of these store closures, Starbucks have been doing some great marketing.

They got on the back of the Sales Force platform that Dell used for IdeaStorm and they are doing their bit for Social Corporate Responsibility, see post below:

http://dominiquehind.wordpress.com/2009/02/02/online-community-driving-offline-change-starbucks/

Starbucks aren't capitalising on these opportunities and they need to be. There is obviously something that isn't right within Starbucks and now is the right time to be asking the questions.

While everyone else is making changes to ensure their survival, it might be good for Starbucks to do the same.

[Shamus McConomy]

The problem with companies like Starbucks is that what makes them unique eventually gets watered down when the company begins to serve the masters of Wall Street. The demands for year over year revenue growth by analysts require an unsustainable expansion rate that ultimately transforms a unique brand into a ubiquitous brand which has lost its focus. For once a CEO needs to do what is right by all stakeholders and ignore the seduction of being a stock market darling. The road is well worn with beauty queen stocks that have lost their luster. The road untaken is for a company that stays true to its vision regardless what the stock analysts say. Beside what do analysts know about running a company?