Starbucks execs push back-to-our-roots shift
Scott Wong
The Arizona Republic
Feb. 28, 2007 12:00 AM
Starbucks Chairman Howard Schultz has warned company executives that the coffee giant's phenomenal expansion has led to the "watering down of the Starbucks experience," possibly exposing the brand to competition.
Jim Alling, president of Starbucks Coffee U.S., embraced that message Tuesday, saying there's no better time for the Seattle-based behemoth to return to its roots.
"It's a good time to be introspective. . . . It's a good time to get back to your core when you're successful," Alling told 280 people at Thunderbird School of Global Management in Glendale. In a decade of unrivaled growth, Starbucks has seen baristas give way to espresso machines and store designs move from comfy to "cookie-cutter." Known for its Frappuccinos and personalized coffees, it has experimented with selling everything from advertisement
But Alling, a 1985 Thunderbird alum, said the company could rediscover its core by focusing on its two pillars of success: its coffee and its people. It can do that by paying more attention to its coffee products and continuing to increase wages and benefits, he said.
In a Feb. 14 memo, Schultz wrote that taking the necessary steps to grow the company from fewer than 1,000 stores to 13,000 in a decade's time has "led to . . . what some might call the commoditization of our brand."
"Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience," he said, "but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces."
Customers at a nearby Starbucks in Glendale, however, said they still see the ubiquitous coffee company as the same old coffeehouse. Relaxing on the patio outside a shop at Loop 101 and Union Hills Drive, Jessica Roan said she has not altered her daily coffee routine even though Starbucks now caters to grab-and-go customers and serves up sandwiches alongside its traditional brews.
The 22-year-old waitress from Surprise has been ordering an iced latte (or, in Starbucks lingo, an iced quad vent, no whip, white mocha) every day since the age of 12.
Jennifer Dillon of Glendale agreed: "It's still a coffeehouse. It's family-friendly."
Thulasi Devadas, a first-year Thunderbird business student said Starbucks must strike a balance between cultural understanding and corporate philosophy as it branches out.
"If they are applying the same model throughout the world, they might have some problems because of the different cultures," said Devadas, who moved from India for school. "But if they concentrate on service to customers, they can grow big and still stick to their core values.
-AZ Central.com