Starbucks is facing an identity crisis of sorts. I just finished an interesting book called "Grande Expectations: A year in the life of Starbucks Stocks." It is a great read that peals back the curtains and dives into markets, stocks, and history of the company. The book gives you a good feel for what Starbucks was, where it is now, and what it wants to become. There are "Grande Expectations," so to speak, for the company, especially in China. Starbucks plans to be the first company ever to open 40,000, yes you read that right, 40,000 stores worldwide, with a huge push in the next few years into the Asian and Latin American markets.
With such ambitious goals of opening so many stores, usually in the 1,200-1,500 stores a year, several harbingers became clearer and would start to erode Starbucks market share. Cheaper competitors with better quality coffee, the loss of the handmade feel of the coffee preparation process, and a saturation of the product, has led to decreased sales and traffic in many stores. Saturation is evident here in "The Rouge" (I live within a mile of 2 Starbucks and one location in particular: Manhattan! In 2007, Mark Malkoff hit all 171 Starbucks in Manhattan in 24 hours, crazy feat and pretty impressive pace (hitting a store every seven minutes for over 20 hours!).
The aura that is Starbucks has been crumbling, due in large part (my opinion and many others) by getting away from their core business, the coffee experience! Combine poor quality coffee and the herd like mentality of getting in, ordering, and getting out as fast as possible has made Starbucks more of a high end convenience store than an experience. It was this experience that drew people into Starbucks to experience the smells, the sounds, the "Barista's," and still get them to drop $4 for a iced coffee drink with a fancy name. Many people noted that it wasn't a store, but it became a "3rd" place between work and home where one would meet friends and family. But now you are bombarded with Starbuckian corporate pushes for music, movies, drinking vessels and food. Its no longer an experience, but merely a place where you go for just a cup of coffee.
Now it is up to the founder and former, but now current, CEO Howard Schultz to drag and refine the Starbucks image. Is is up to him to recreate that excitement of going into a Starbucks and talking with the barista to decide what it is you are going to get. Mr. Schultz agrees that Starbucks is lost and I feel that there will be many long nights filled with Grande Venti Low Fat No Whip Rethinking going on in the world that is Starbucks.
With such ambitious goals of opening so many stores, usually in the 1,200-1,500 stores a year, several harbingers became clearer and would start to erode Starbucks market share. Cheaper competitors with better quality coffee, the loss of the handmade feel of the coffee preparation process, and a saturation of the product, has led to decreased sales and traffic in many stores. Saturation is evident here in "The Rouge" (I live within a mile of 2 Starbucks and one location in particular: Manhattan! In 2007, Mark Malkoff hit all 171 Starbucks in Manhattan in 24 hours, crazy feat and pretty impressive pace (hitting a store every seven minutes for over 20 hours!).
The aura that is Starbucks has been crumbling, due in large part (my opinion and many others) by getting away from their core business, the coffee experience! Combine poor quality coffee and the herd like mentality of getting in, ordering, and getting out as fast as possible has made Starbucks more of a high end convenience store than an experience. It was this experience that drew people into Starbucks to experience the smells, the sounds, the "Barista's," and still get them to drop $4 for a iced coffee drink with a fancy name. Many people noted that it wasn't a store, but it became a "3rd" place between work and home where one would meet friends and family. But now you are bombarded with Starbuckian corporate pushes for music, movies, drinking vessels and food. Its no longer an experience, but merely a place where you go for just a cup of coffee.
Now it is up to the founder and former, but now current, CEO Howard Schultz to drag and refine the Starbucks image. Is is up to him to recreate that excitement of going into a Starbucks and talking with the barista to decide what it is you are going to get. Mr. Schultz agrees that Starbucks is lost and I feel that there will be many long nights filled with Grande Venti Low Fat No Whip Rethinking going on in the world that is Starbucks.
1 comment:
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