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Thread: Founder of Starbucks returns...

  1. #1
    CoffeeSnobs Owner Andy's Avatar
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    Founder of Starbucks returns...

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    Founder of Starbucks returns to try to put it back on track
    By Bruce Horovitz, USA TODAY

    Its back to the future for Starbucks — and its corporate founder.
    Howard Schultz, whose vision 25 years ago took Starbucks (SBUX) from a handful of stores to an international behemoth with 15,000 locations worldwide, has returned as its CEO with this promise: Starbucks is returning to its roots.

    COFFEE RIVAL: McDonalds to offer fancy drinks, too

    "I am dissatisfied more than anyone else where we sit today," he said in a hastily called conference call with industry analysts. "We have a lot to do."

    Starbucks competitive map has changed drastically. The CEO change came the same day that McDonalds (MCD) began to detail aggressive plans to invade Starbucks turf by selling — at lower prices — such Starbucks favorites as cappuccino and lattes.

    For Starbucks, the plan is basic, yet startling: return to the essence of what made it special.

    "Starbucks must simplify and amplify," says Dennis Lombardi, executive vice president of food service strategies at WD Partners, a consulting firm.

    To do that, Schultz hosted an end-of-the-day analysts call where he ticked off a series of steps to get Starbucks back on track.

    •Hes taking charge. Gone is CEO Jim Donald, whose job Schultz has taken over immediately. And "Its for the long term," Schultz says.

    •Growth plans are changing. Schultz said he plans to slow growth and close "a number" of slower-performing stores in the U.S. market. He declined to say where or how many, but noted many of the stores will be among those opened more recently when real estate decisions were made that "outstretched" Starbucks relationship with customers. He promised more details in a Jan. 30 announcement.

    He plans to boost international growth. He mentioned Mexico as a nation where interest has greatly exceeded expectations. He also pointed to Canada and the United Kingdom as growth markets.

    •Coffee will be king. "Were going to focus on the Starbucks experience," he said. Some of the non-coffee tchotchkes sold at its stores are expected to get the ax.

    •Management will be streamlined. Schultz said layers of bureaucracy will be cut.

    •New products are on tap. Schultz declined to be specific but said Starbucks has recently been deeply involved in creating lighter, better-for-you products. He said the chain plans to tap into its biggest fans, Starbucks card holders, with promotions.

    Schultz made clear that Starbucks will not solve its problems overnight. "There is no silver bullet and no overnight fixes," he said, but added, "There will be a focus that hasnt been around here for a long time."

    From:

    http://www.usatoday.com/money/industries/food/2008-01-07-starbucks-ceo_N.htm?csp=23&RM_Exclude=aol

  2. #2
    Mal Dimal's Avatar
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    Re: Founder of Starbucks returns...

    Hmmm,

    Very interesting for sure.... Will be even more interesting when we get to see what the plans will actually be I guess :-?,

    Mal.

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    Re: Founder of Starbucks returns...

    Maybe make a good coffee?
    A bit Harsh I know, I had one about 3 months ago....needed coffee, spied the SBs, walked in ordered, walked out had one sip and threw it!! Tasted like the beans had been ground for a week and then left on the counter.

  4. #4
    Senior Member GregJW's Avatar
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    Re: Founder of Starbucks returns...

    Ditto Snooooze,

    Twice in the last 3 yrs Ive had SBs - more like International Roast than espresso :P .

    I was half expecting a vow by Howard Schultz to improve the quality of its product (ie "put it back on track"), not merely take on McDs in its expansionism.

    Oh well, looking forward to a rash of new SBs - doesnt mean we have to drink it (and I WONT make that mistake again).

  5. #5
    Senior Member robusto's Avatar
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    Re: Founder of Starbucks returns...

    The reports Ive read suggest SB wants to contract in the USA and expand internationally. (Gulp!).

    The share price has halved in the last year or so, and is at a three-year-low, so the company has to do address both its fiscal problems and other perceived problems.

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    Re: Founder of Starbucks returns...

    It is actually possible to get some decent coffee out of starbucks... its just that the starbucks standards are wrong and the training they give you aims all its focus on customer care and next-to-none on creating a quality drink.

    On top of that, it doesnt help that the average starbucks customer wont know the difference between a cappucino and a late if they were printed as a list on the mug and thrown at them.

    I work at starbucks. I really dont like serving people espresso or macchiato - like nothing else these two drinks will highlight the flaws of the coffee and the skill of the person making it. I try to make decent drinks... Being a coffee geek and working at starbucks is hard :/

    That said, Id leave in a second if I got an offer from something better -hint-

  7. #7
    Senior Member Dennis's Avatar
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    Re: Founder of Starbucks returns...

    Oh Indraunt, I feel your pain...reminds me of that old saying..."its hard to fly like an eagle when youre surrounded by turkeys" :P ;D

  8. #8
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    Re: Founder of Starbucks returns...

    Isnt there just a little bit of irony here?

    "the training they give you aims all its focus on customer care and next-to-none on creating a quality drink."

    I wonder if a car manufacturer made a car that smelt great but didnt get all of the passengers to the destination, would they have to reflect a little to work out just where they had gone wrong?

    If the Share price is at a 3 year low then I bet the quality of the coffee is at the same or worse 3 year low.

    This is no reflection on Indraunt or anyone else employed there they are just trying to do a job, maybe not so well trained. It is however a sample of what happens when things grow too big and get out of control.

    my 2 bobs


    "would you like a grande with that?"

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    Re: Founder of Starbucks returns...

    Who cares?

  10. #10
    Mal Dimal's Avatar
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    Re: Founder of Starbucks returns...

    No offense intended to any CSer CPAs but when Bean Counters take over the running of a business instead of the Bean Roasters, I think the outcome is inevitable. Seen it happen time after time.....

    Mal.

  11. #11
    Senior Member GregWormald's Avatar
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    Re: Founder of Starbucks returns...

    Ive had Starbucks ?coffee? in a number of Canadian and US cities, and only had one decent cup--at a small place in a bookshop in London Ontario.
    A number of the Starbucks Ive been to, including one on one corner in Vancouvers GasTown (there is a Starbucks on each corner of the intersection) have been so dirty that I havent even bought a coffee.
    I even went into a Starbucks in Chiang Mai, Thailand and walked right back out.
    A good coffee is really hard to get in North America. Last time I was there my sister had to bring her own Fair Trade beans from a special shop in Vancouver (we were again visiting Mom in London) so we could make coffee at my cousins place.
    Greg

  12. #12
    Sleep is overrated Thundergod's Avatar
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    Re: Founder of Starbucks returns...

    Welcome to Coffe Snobs Greg.

    I see youve been here for a while, but one doesnt usually get a welcome until their first post.

    Dont be shy; post some more.


  13. #13
    Senior Member speleomike's Avatar
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    Re: Founder of Starbucks returns...

    Hi all

    I also see a long term problem in franchises like this an others in expanding internationally - a shortage of coffee. Big companies with enormous buying power taking most of the coffee, both good and poor, leaving little for small companies, coops and small roasters.

    I have had a few espressos at Starbucks and even bought soem beans once. I was appalled. It was undrinkable as it seemed to be burnt. Thats the best way to describe what it tasted like.

    Mike

  14. #14
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    Re: Founder of Starbucks returns...

    Starbucks coffee - yuk! I agree Ive not had a good one yet and Im not even half the snob some of you guys and gals are ;D

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    Re: Founder of Starbucks returns...

    Quote Originally Posted by Mal link=1199793622/0#9 date=1199884007
    No offense intended to any CSer CPAs but when Bean Counters take over the running of a business instead of the Bean Roasters, I think the outcome is inevitable. Seen it happen time after time.....

    Mal.

    Too true unfortunately Mal. I thought Dominos Pizza went downhill in a big way after it listed on the ASX.

    How many people speak Yiddish and have heard of the word "tchochke"?? I just learnt something new! :)

    For all the Starbucks bashing that goes around, I think it and other franchises are great for the coffee industry and Id argue that wed be nowhere without them. I think Starbucks do a great job of introducing people to the specialty coffee.
    I started off, like many others I know, drinking coffee from franchises and thinking it was the next best thing - if nothing else the franchises do generally give a feeling of consistency.
    Then I discovered real coffee - again like many others I know!!

    There was a coffee company my wife and I loved when we lived in Japan (2003) called Seattles Best Coffee - I looked into franchise opportunities for Australia but gave up when I found out that Starbucks owned them ($big$) - and I havent seen or heard of them since. Do we have any CSers in Japan that can tell me if it still exists?

    And in London youll find a Starbucks or a Cafe Nero on pretty much every corner - sometimes one of each!! So I dont know if there is too much expansion available for them in the UK.



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