Starbucks is BIG. But it used to be BIGGER. The Onion satirized (in 1998!) that Starbucks had opened a new Starbucks in the rest room of an existing Starbucks.
When it all started to fall apart in 2007, Howard Schultz, the founder and leader who left Starbucks in 2000, took back the reins and downsized quite mercilessly, shuttering 1000 stores, laying off thousands and eliminating unprofitable products. His turnaround of Starbucks is documented in his 2011 book, Onward: How Starbucks Fought for Its Life without Losing Its Soul.
As turnarounds go, there are more fascinating tales, such as Lou Gerstner at IBM and Steve Jobs in his second stint at Apple. Starbucks does not produce earth-shattering products. Its coffee is overpriced and leaves grand burned aftertaste (also known as Grande).
What is interesting in Starbucks’ turnaround is how faithfully Schultz followed strategy theory. Those who focus on implementation and execution over competitive-strategy decisions, consider this a wake-up jolt of caffeine: it’s not how you execute; it is, first and foremost, what you execute. …Read More →