More on Starbucks

By Megan McArdle
Starbucks has released a bullet-pointed list of the new strategic initiatives that are supposed to revitalize its business:
  • improving the current state of the U.S. business by refocusing on the customer experience in the stores, new products and store design elements, and new training and tools for the Company's store partners to help them give customers a superior experience;
  • slowing the Company's pace of U.S. store openings and closing a number of underperforming U.S. store locations, enabling Starbucks to renew its focus on its store-level unit economics;
  • re-igniting the emotional attachment with customers and restoring the connections customers have with Starbucks(R) coffee, brand, people and stores;
  • re-aligning Starbucks organization and streamlining the management to better support customer-focused initiatives and reallocating resources to key value drivers; and
  • accelerating expansion and increasing the profitability of Starbucks outside the U.S., including redeploying a portion of the capital originally earmarked for U.S. store growth to the international business.
One of my commenters argues that Starbucks is retrenching because it went too downmarket; stores in lower-income areas are not as profitable, and (I assume) erode the lifestyle cachet of the brand. This list rather bolsters that impression.

This article available online at:

http://www.theatlantic.com/business/archive/2008/01/more-on-starbucks/2492/