Thursday, March 20, 2008

Starbucks Plans Return to Its Roots - New York Times

Starbucks Plans Return to Its Roots - New York Times: "Also on Wednesday, Starbucks introduced a new online community,, where Mr. Schultz and other managers will contribute to a corporate blog. Customers will also be encouraged to visit the site to make suggestions and interact with employees. The site opens on Thursday.

Helge: Executives blogging and socializing with customers is a new move. Social Media has been great for smaller companies. We can also "interact with the employees".

Looking further ahead, Mr. Schultz said that the company planned to introduce health- and wellness-related food and drinks and energy beverages later in the year.

Helge: Wellness seems to be a megatrend. I guess Starbucks is right.

Wednesday’s meeting represents what Mr. Schultz hopes will be a striking turnaround in the speed and spirit of innovation at Starbucks. In the first half of the decade, the company thrived on product introductions like the Frappuccino, a frozen coffee drink. The last innovation widely thought to be successful was the Cinnamon Dolce Latte — in early 2006.

Helge: The spirit of innovation has to consider that Wi-Fi wan't bring clients to Starbucks. Mobile broadband is going to give added freedom for laptop-coffee-lovers to choose the places they are spending their lunchtime or coffee pauses.

Mr. Schultz partly has his own relentless ambition to blame for the woes at Starbucks. In the last two years, citing ever-larger expansion goals, the company doubled its number of stores to more than 15,000 in 44 countries — many in comically close proximity to one another and to competing coffee shops.

Helge: Hmmm, don't know much about that

Analysts say new stores cannibalized traffic from existing stores and thinned the ranks of well-trained Starbucks managers and employees. The company then tried to create efficiencies among stores, adding technology like massive automated espresso machines, which have little of the romance or aroma of the old hand-operated machines."

Helge: Change Management for a big company isn't easy. Are we going towards an era of greater diversity?
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