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Drip by drip, Starbucks lost what made it shine
Jul 10, 2008

"Twenty years ago, it was love at first sip. Like every prisoner of love, I went from downing one cup a day to three or more. How, I wondered, had I gone more than 40 years without a mid afternoon break or even a "for no reason" indulgence?

Today those memories are like bitter, stale grounds. These days the breaks aren't fewer but are often enjoyed somewhere else. That early Starbucks mojo is no more. My disillusionment set in about three years ago, but the company's ballyhooed "Starbucks experience" died even earlier, killed by a growing bureaucratic culture.

Starbucks' recently returned chief executive officer, Howard Schultz, finally stopped denying that fact last week with the announcement that the company was applying the brakes on the Starbucks express growth strategy and closing 600 of its 16,000 stores worldwide."  That is how Tim Mllaney of the Chicago Tribune offers his perspective of the Starbucks he knows today.  Click Here for full article

Clearly Starbucks with their excessive price points, facing an economy that does not support their brand positioning, must make changes.  Their CEO recognizes this , perhaps somewhat late, but nonetheless has begun to make the required adjustments any business must make in difficult times. Closing almost 5% of his locations is I am sure painful , but the right thing to do.  Adjusting its product assortment to reflect the wants and need of their consumers is mandatory.

What is being overlooked by many of the Starbucks critics is the power of a deep rooted culture. Strong cultures are resilient and when faced with challenges, if they are wise enough to make the necessary changes required to meet those challenges, and cling to their Purpose and Values strong cultures survive.  What is important is the leadership.  Howard Schultz helped create the culture.  He knows what is required to  set it right, and I believe he will do it. Patience......


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