Extra Post #3 – “What’s Up with Starbucks?”

Starbucks

I will admit that I’m addicted to Starbucks.  Well, I was addicted to the once-upon-a-time Wall Street darling.  Starbucks, at one point, was one of America’s great growth stories from the late 90’s to as recently as the early 2000’s.   In less than 20 years, Starbucks grew from 100 coffee shops to over 12,000, and a record 2,000 stores opening in 2006 alone.  At one point, Starbucks had the brand equity most companies would die for. 

Typically, a company’s growth is a good thing.  However, many in the business community have quietly implied it was this explosive growth that has led to Starbucks’ demise.  Even the company’s CEO, Howard Schultz, himself admitted in a leaked internal document that for Starbucks, there are limits to growth.  Schultz pointed out that the company’s own growth strategy had posed problems.

“Stores no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store.”  – Howard Schultz

My, have times changed.  It seems the wheels started to fall off around the time of Schultz’ comments in 2007, following closely by the company’s announcement in mid-2008 that it was closing 600 stores and cutting 7% of its workforce.   Given its sales slump, Starbucks attempted countless efforts to diversify beyond the coffee cup – in an effort to lure new customers with ideas of grandeur.  Starbucks launched initiatives into pop culture, breakfast options, and most recently, VIA instant coffee.  Excuse me…instant coffee?  What happened to the “Starbucks Experience,” Mr. Schultz?

Which leads me to my final point – the customer service.  I remember around the time when my infatuation with Starbucks began in 2003, the customer service, or “experience” was impeccable.  Today, I’m greeted by grumpy “barista’s” who act as if they’re doing ME a favor, long lines with no sense of urgency from the barista, and my personal favorite – running out of coffee.  A coffee shop running out of coffee?  And, I’m not talking about running out during peak business hours!  And, I’m also not talking about this happening every once in awhile, but multiple times in 1 week.  This isn’t how the “Starbucks Experience” used to be…

Recognizing this, Starbucks closed all stores nationwide for several hours in 2008 to “re-train” their staff to guarantee complete customer satisfaction.   What a great marketing ploy that was, since in my opinion, they will need more of these “training sessions” to fix the broken business model.  If Dunkin’ Donuts, McDonalds or Caribou don’t give Starbucks its death sentence, Starbucks itself will with this “improved” customer service just might. 

I’m not quite at the point to sign up for the “I Hate Starbucks” blog, but I am a regular of this nifty little website giving me non-Starbucks alternatives.  Chris Anderson would certainly love this site – the mom and pop’s not hoping for the big hit, but rather working to thrive in a niche market.  Certainly, not the strategy of Starbucks.

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