How does an international company — whose stock fell 50 percent just last year — begin to make a comeback? Starbucks' solution is to bring back their big shot. As of Monday the founder of the company, Howard D. Schultz, has returned as chief executive with hopes that he'll turn the company back around.
Aside from sales suffering due to typical economic forces, Mr. Schultz said the company that had started as “quintessentially entrepreneurial” is now “soft." He admitted that Starbucks no longer focuses on the customer and his intent is to concentrate on the "customer experience."
McDonald's is busy gearing up their brand new teams of baristas to make you a cheaper latte this Fall, and Starbucks will need to prove they're worth your extra cash. If you were in Mr. Schultz's shoes, what changes would you implement for the suffering chain?
Stuart Weitzman
Roberto Cavalli
Luella
I usually go to Tim Hortons. They have AWESOME coffee and tea for lke half the price as they do at Starbucks!
1PLUS I love the fact that Tim Hortons is CANDAIAN OWNED! Oh yea!
i think that they are taking many steps in the right direction. they recently implemented their "skinny" drinks, and while the connotation of a skinny drink is certainly negative, the fact that they recognize the american trend to slim down is a plus. bringing back the founder as CEO is a step in the right direction also, and one will hope that he will restore the original vision of the company.
my profit plan for starbucks would be to whittle down their drink list a little bit, keeping just the fan favorites. by having a few drinks that are easy to make will keep down the cost of ingredients (especially dairy!) and will make it a faster turnaround for the customer. i'm sure one of the biggest reasons that starbucks loses money is because people see an extraordinary line, and decide against going inside.
2Im not a regular coffee drinker, but when I do drink coffee, I go to starbucks and get something outlandish. Mainly why I don't go their more often is because of the high calorie count, and that their "low calorie" substitutions taste like poop.
One of the changes I would make would be to mimic what one of the local chains here in pittsburgh does. They have at least 3 Mac Mini's set up free of charge. They have booth seating so people feel comfortable sitting alone working on something. They also have a social area for groups. And lastly. They have a HD tv in its own room where you can sip your coffee and watch tv in HD. I think having people sit in there longer means more coffee sold. I only visit two starbucks in the area, but I always feel incomfortable in their seating area. The soft seating is too soft, and the other seating is too upright.
3Change the price- i want to buy a latte every morning, but its just pure money out of my pockets! $3.50 x 5 days a week= $17.50 a week x 52 weeks= $910 a year. On COFFEE!
4Starbucks is the thing that goes when I get into an economical crunch. They should close the unprofitable stores and amp up the customer service. Also, they should offer free wi-fi so that people sit longer and drink more coffee rather than just grabbing a cup and going.
5I agree with Le Luxe. Their prices are crazy!
6Come down off their corporate high horse, & make the coffee more affordable for the masses!
7I agree with LeLuxe... it's the price they should lower. I love coffee and would get a Latte everyday but the price has gone up so much I no longer can afford to and it's the first thing to go when the budget gets tight.
8It also frustrates me that they only have 2 sugar free flavors (Vanilla & Hazelnut). I also hate that everytime they get a new Flavor (Gingerbread or Cinnamen Dolce) they consider it a special Latte and jack the prices up another 50 cents.. with tax it's $4.12 (Washington) for a 16 oz nf sf Cinnamon Dolce Latte but only $3.50 for a 16oz nf sf Vanilla Latte. Come on, the syrups don't cost that much more! Any other coffe place all syrups are created equal!
Heather
I would have to agree with the other comments about Starbucks' prices. The reason? Of course as a consumer I would like to enjoy my drink without feeling guilty of the outrageous money I just spent on a cup of coffee. But the more important thing, on a business level, is that competitors, like McDonalds, Dunkin Donuts, etc. are copying Starbucks' style, without the ridiculous price tag. I know soooo many people who opt for these alternatives because it's cheaper and you still get your "latte."
I'm personally a Starbucks fan, and I feel that their quality of drinks is better than a lot of stuff out there, but they truly are loosing a lot of revenue when they refuse to lower their prices and compete with those other companies.
I guarantee you that if Starbucks lowers it's prices,while keeping it's signature flavor and look, it will blow away the competition.
9yes agreed the price!
10Thankfully Starbucks doesn't have a huge presence in the state I live in (Wyoming) but what bothers me about them is the quality of their product. I drink coffee all over the state in small mom and pop shops, some with high end espresso and some with low end espresso. Starbucks is bitter, over-roasted, often too sweet because the barista uses far too much syrup, and over-priced. Even if it was cheaper I still would think it tasted crappy.
11Part of what I always liked about Starbucks is the treatment of their employees. EVERYONE gets access to affordable health care. EVERYONE gets overtime and holiday pay. Their training program is phenomenal (if you're in a position to hire and someone has worked at Starbucks for a long time - TAKE THEM!). They have MATERNITY LEAVE! These are things I didn't have until I started working for a School District when I was 27 years old. I don't mind paying $4.50 for a drink if I know that's where my money is going. I think they need to play up that aspect of their business to increase consumer respect and support.
I also agree with the atmosphere adjustments already suggested. Free wi-fi is key.
Also, Dunkin's and McDonalds are NOT giving people the same thing. Yes, it's foamed milk, and yes, it's espresso. McDonald's hamburgers are also made with beef, but you'd never say it's the same as a hamburger from a sit-down restaurant. You'll never be able to tell the Dunkin's employee that you'd like extra foam, because they use a machine with automated timing to foam their milk. Starbucks continues to offer higher quality by giving you a personalized experience.
I think they need to get back on the PR bandwagon. They've been able to save money on advertising, but now they have competition, and need to get the word out about their good qualitites.
12My two big problems with Starbucks:
1 - The price! Holy crow, their coffee is so expensive. Its just hot water that's been strained through a bean - with some other crap thrown in, not sweet crude oil!
2 - Their coffee is bad...it makes me sick to my stomach. Too strong, too something, and so I always end up asking for either a regular old black coffee that I dilute 50% with milk and sugar or a hot tea - and only if a Dunkin Donuts isn't around.
Why pay a fortune for a bad cup of coffee?
13I live in Europe, and Starbucks has been poping up more and more and the lovely little cafés we used to have are closing.
14I find Starbucks is too expensive and the coffee is bad plus the places are all the same and not very inspired. I prefer smaller, personal cafés.
I'm actually glad to hear they are not doing so well as I hate the fact that all over the world there seem to be the same stores, coffee places ect.
Either have a frequent buyer card that spends you coupons or buy 10 get 1 free. Even though Starbucks is expensive, it would be a nice reward. There is just something that is nice about a perfectly made latte and you just can't get that at DD or McDs. I enjoy DD for iced coffee but not for anything hot.
Free Wifi would be wonderful but I almost enjoy the fact that I can't use the internet when I'm studying at the 24 hour Sbux near my apt in Chicago.
Good access to electrical plugs and better lighting would be my suggestion.
I was lucky to get a $200 gift card for Christmas from my Dad...it will last me quite a while
15I think yesterdays announcement is a step in the right direction. I noticed Starbucks was up a lot yesterday (%-wise) when I looked at my portfolio, and compared to the rest of the market (which fell 228 pts yesterday) I knew something important must have happened with them.
I really think they got caught up with growth and didn't think about the long term effect of opening up so many new stores so quickly.
I have actually pretty much abandoned Starbucks for Dunkin Donuts since last summer, even though I still own their stock...we'll see what happens!
16Well, I think I'm in the minority. When I go to a coffee shop, I'm going for a cup of coffee, not a designer brand of whipped cream and sugar. So, I want to just be able to order a large coffee, not have to trip through grande, venti, moroccan spice, whatever. I also hate that I have to wait for 16 people in front of me to get their fix for my coffee to get poured.
It's not bad coffee though, but it lacks a personal feel for sure.
17They could lower the prices a bit. I wonder how much profit they make annually?
Also, a lot of coffee shops I've been in specialized in coffee but also sold light snacks. Starbucks just sells sweets. How about soups, salads and sandwiches?
18some starbucks do sell sandwiches and salads. its hard to know wgich ones do. I have also seen some sell cheesecake factory desserts.
19I would add a Recycling program - it drives me nuts that Starbucks goes through so much paper and plastic and yet there is NO recycling program!!!!
20I read through all these suggestions but I think we're all thinking the wrong way. The fact is that Starbucks doesn't sell coffee, it sells a lifestyle. And I think thats what they forgot. They need to work on getting back on the exclusive route, they became too accessible. Another brand, Abercrombie, who also sells a lifestyle, chose to lower their prices late-90s and thier sales declined! Why? Because it wasn't exclusive anymore. People go to Starbucks for the cup, not the coffee. We may not want to admit it, but its true!
21I fully agree with the other commenters. I drink a lot of Starbucks at the beginning of each month, but by the end, I can barely afford to go there! Also, free WiFi would be clutch.
The only thing I haven't seen suggested that I might think about changing is having the neighborhood Starbucks stores take on more of the character of that area rather than trying to make them the same. More local artwork, feature more local musicians in the cds they sell... I think that's one major way to set themselves apart from McDonalds/Dunkies/etc.
22close a bunch of the stores (like 2 of the 5 on campus!) and amp up the customer service...plus add more unique decor for each store.
23Starbucks needs to come back down to earth! Here in NJ we're saturated with Starbucks (and DD, too). Prices are way too high. I like a coffeehouse that offers a variety of coffee beans, not just add ins. Even after many years, I still stumble over the size options... I opted to buy a home espresso machine. Broke even after only a few months of making my own. True, it's not the same experience, but I rarely have time to sit for my brew!
24I rarely stop in at Starbucks. It's not local, and it's cheaper to buy great beans and make at home. We're currently brewing Cafe El Indio. Love it.
25starbucks have become a luxury for me now.. before when i didn't factor in the "Latte factor" and just kept drinking their designer coffees i didn't realize just how much i was spending for their coffee.. now i only go there as a treat for myself when i really deserve it otherwise i drink caffe d'vita (a mixed drink) heck it's no white choc mocha but it's good enough for my fix.
26i also enjoy drinking mcdonald's premium coffee. i have to admit, it doesn't taste bad. it's so rich in taste and pretty affordable, too.
i miss tim horton's. oh how i love their donut holes.. i stayed in vancouver for a month to study law.. too bad they don't have them here in los angeles (or do they? i have to google that)
another option for me is coffee bean, but i don't drink their coffee as much as i love their teas..
wait, what was the question again?
Whats this? McDonalds is opening a coffee shop? Or they're just selling lattes?
*$ could lower their prices. I dont go there cos I cant afford it.
27Woah, dam cabaker, you make a helluva good point!
28Oh yeah, one more thing, their drinks are SO FATTENING!
29The ceo is right about the customer service bid - I'd start a policy of having specific nights for groups, like a moms night, or study group night. I haven't lingered at a starbucks for quite a while, 'cause it's so full of teens. I know - the soccer moms rule everything, but they are the biggest consumer of designer coffee, why not cater to them?
30One word, tea. I'd go to starbucks all of the time but I don't drink coffee. I know they have tea but they should promote it more. Also there is a Starbucks by me that has an outdoor seating area that is just FILTHY. It is over run with smokers and people with the dogs. I always cross the street rather than have to walk in front of it. I don't think that' very good for their image.
31i personally love starbucks, but it always looks cut from a cookie cutter....st. louis, charlotte, atlanta, even in germany they all look the same. there are so many talented artists in every city/state...starbucks should buy from them, or exhibit their art instead of having the same large prints up on the walls. i also heard from my friend who worked in starbucks in germany that the pastries are shipped to them from the US (frozen)....if that is true why not have local bakeries bake their pastries, that sounds much more cost effective to me.
32I have been to quite a few different starbucks, and I would love it if they would all add the same amount of syrup...how about having small measuring cups so that it tastes the same wherever you go...I have had some overly sweet lattes....
and at they definitley need Wifi!!!
my husband and I go to coffee shops only once in a while, as a treat, and if we take our laptop with us we are choosing a different cafe...because of wifi
that said i still love starbucks, but going there will remain a treat.
i don't drink starbucks bc in the back of my mind, i'm afraid i'll look like britney spears!
33The only thing I'd change about Starbucks is their prices...their coffee is perfection to me.
34Of course the prices are way too high, but there's more to it than that. Starbucks is too loud and too dark, IMO. I used to like going to Starbucks to have a nice cup of coffee but now it's almost like they want you to grab your coffee and run. And have you ever noticed that it's always freezing in Starbucks? I feel like they don't even want me to stay in there.
35The price definitely needs to be lowered. And they need to stop blaming gas/energy costs for the need to raise food prices. Starbucks sells CDs and mugs and other things-- why not increase their profit margin on those? McDonald's coffee was rated higher than Starbucks in a consumer survey, so that will be a lot of people who will leave them if they can get better-tasting coffee at a cheaper price from McDonald's.
36I love my starbucks; but, no I don't get one everyday. I agree the prices are alittle high but has anyone complaining about prices bought a gallon of milk lately? A gallon of milk is almost a $5.00 a gallon so with milk prices high, gas prices high...yes, a drink is alittle pricey.
37The starbucks I go to has great customer service; but the drive thru could be alittle faster...sit in line a little longer then I like.
Yes, they need to come up with more great hot and cold expressos that are lighter in calories but with a great taste.
Ladytinker
dear starbucks:
38i love you.
Tim Hortons' coffee sucks. But they have great donuts and bagels and yogurt. They really need to stick to that, though. Haha, and I'm Canadian.
39...starbucks is not any more expensive than ANY other coffee shop in America.
40well honestly, i remember as a young girl, my brother working at one of the (then) few starbucks. Back then the coffee actually TASTED fresh.. not old, burnt or sweetly covered up. It's not enjoyable anymore, the GOOD coffee was then a treat.. now just a lame waste of money. Its too overpriced for the poor quality.
41Someone mentioned the great benefits starbucks employees get - and I'm sure that's part of what you pay for with the higher price. Just remember that if you're paying for cheap coffee it might be because the employees have no bennies or that the coffee is not fair trade. Personally I support companies that support their employees. Be aware of the wal-mart mentality in this country today.
I think Starbucks should concentrate more on educating the consumer about what a great place it is to work, about ititiatives starbucks takes to ensure its growers are paid fairly and that their coffee is produced in an environmentally friendly manner - and yeah, start a recycling program! It's good business to be green these days.
42You know people complain a lot about SB, but they also complain a lot about fair wages and health care. But If you want farmers to get a fair price for coffee and if you want employees to have health care then it all adds up.
SB also gives their employees stock options. They're actually a really good company to work for. They're also good for mom and pop shops. I read an article recently that stated that when SB moves into a community and next to an existing shop, they actually bring in lots of business for their neighbors. Coffee bean and tea leaf is one of those companies and is where it is today because a SB moved next door when the company had only one store.
43OH and McD. is terrible! Even if their coffee has gotten better I will never support them! They treat their employee like Cr*p and they are part of the National Restaurant Association, which is one of the leading lobbying groups that lobby Congress to keep minimum wages down. Their food is poison and terrible and they perpetuate the bad business model.
44THE PRICE.
45a couple of people said it ... free wifi!!!!
starbucks is supposed to be about the experience, free wifi would aide in that.
46i do agree on the free wifi. I myself am a barista and I love my job.I would love for them to decrease the prices. I do feel that it is a bit much.It is for the quality.I am excited that Howard stepped back. I am however scared of the Mcdonalds espresso plan. BUT starbucks is so much more than do you want fries with that. its all about the experience. I love to make my customers feel at home. I also love my benefits. that is something Mcdonalds just does not offer.
47I really do not like Starbucks. Their prices are too high and they are too impersonal. I wish they could actually wear normal stuff... not like black pants and a black polo. I'd love to just see them wearing something normal like jeans and a polo maybe. The drinks are not made correctly. They just made up their form of these drinks. It's so infuriating.
48I love starbucks-i wouldn't change a thing- -- i tend to stop more as the weather warms up-i just go home and make my own starbucks coffe-
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