While coffee is a mass commodity, sold on exchanges, Howard Schultz’s philosophy at Starbucks, de-commoditized it. He inculcated the art of service design, a concept imported from Europe to the USA. The idea was to slow down, and enjoy each facet of the coffee drinking experience rather than gulping down in large quantities. Starbucks has thus been able to manage the unique customer experience with growth pangs such as efficiency, consistency, speed and the right processes. While Schultz had left the day-to-day operations back in 2000, he returned within eight years because he felt the identity was being lost. Today Starbucks can be compared to experiences at the Apple Store, Victoria’s Secret, IKEA and Williams Sonoma. The complete opposite of Starbucks is Dunkin’ Donuts with its ‘grab a quick bite’ kind of philosophy. Tactical improvisations such as line extensions, more things to sell and add-ons can rectify the problem for a short period, but in the long run, high-end stores can suffer by going too mass-market. For Starbucks, business innovations cannot go astray from its unique identity. Indeed, its latest foray the Starbucks Reserve is about upscale roasteries for the true coffee aficionados.

Source:https://www.strategy-business.com/blog/How-Howard-Schultzs-Angel-Poised-Starbucks-for-Success?gko=46874

Uploaded Date:14 February 2018