Howard Schultz: Saving Starbucks | The Third Place | 1
Oct 14, 2021
39:39
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Quick takeaways
Howard Schultz developed a transformation agenda for Starbucks, focusing on being the coffee authority, engaging partners, and creating emotional attachment with customers.
Schultz prioritized social and environmental responsibility, sourcing ethically and supporting coffee farmers, making Starbucks the largest coffee retailer to ethically source 99% of its coffee.
Deep dives
Howard Schultz's Return as CEO
In early 2008, Howard Schultz returns as CEO of Starbucks to save the struggling company. Concerned with the excessive push for growth and the decline in the Starbucks experience, Schultz develops a transformation agenda with three pillars: be the undisputed coffee authority, engage and inspire partners, and ignite emotional attachment with customers. Schultz aims to make Starbucks socially and environmentally conscious while increasing revenue and regaining customer trust.
Howard Schultz's Vision for Starbucks
Inspired by Italian coffee culture, Howard Schultz envisions Starbucks as an Italian-style espresso bar that offers a unique and comforting environment for customers. He opens his own coffee shop, Il Giornale, which eventually becomes Starbucks. Schultz emphasizes the importance of establishing the starbucks experience as a welcoming and community-oriented concept. He focuses on building strong relationships with employees, whom he considers partners, and aims to create an emotional attachment with customers.
Starbucks' Focus on Social and Environmental Impact
Under the leadership of Howard Schultz, Starbucks prioritizes social and environmental responsibility. The company purchases fair trade certified coffee and implements cafe practices to support coffee farmers and protect the environment. Starbucks becomes recognized for ethically sourcing 99% of its coffee, making it the largest coffee retailer to achieve this milestone. Schultz believes that a business can thrive by doing the right thing and strives to integrate ethical practices into Starbucks' operations.
Challenges and Schultz's Return as CEO
Starbucks faces various challenges, including declining sales, oversaturation of stores, and increased competition. Jim Donald becomes the CEO, leading the company in a direction that prioritizes rapid growth and expansion into new markets and product lines. However, under his leadership, Starbucks experiences a significant drop in stock value and customer dissatisfaction. In 2008, Howard Schultz reassumes the role of CEO, determined to address the company's problems and restore Starbucks' reputation and success.
Howard Schultz bought a small Seattle coffee company called Starbucks in 1987. By the time he stepped down as Starbucks’ CEO in 2000, Howard had transformed the six-store operation into the largest coffee brand in the world. But in the late 2000s, Starbucks descended into a financial spiral, and Howard came back to save the company he’d built from the brink of disaster.
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