The CaseIn 2008, competition in the coffee business was heating up, and Starbucks’s performance had become disappointing. The firm’s stock was worth less than $10 per share by the end of the year. Anxious stockholders wondered whether Starbucks’s decline would continue or whether the once highflying company would return to its winning ways. Riding to the rescue was Howard Schultz, the charismatic and visionary founder of Starbucks who had stepped down as chief executive officer eight years earlier. Schultz again took the helm and worked to turn the company around by emphasizing its mission statement: “to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time”. Food offerings were revamped to ensure that coffee—not breakfast sandwiches—were the primary aroma that tantalized customers within Starbucks’s outlets. By the time Starbucks’s fortieth anniversary arrived, Schultz had led his company to regain excellence, and its stock price was back above $35 per share. In March 2011, Schultz summarized the situation by noting that “over the last three years, we’ve completely transformed the company, and the health of Starbucks is quite good. But I don’t think this is a time to celebrate or run some victory lap. We’ve got a lot of work to do”. Schultz retired a second time in 2017 and was replaced by the COO, Kevin Johnson.Required:Assume you are Kevin Johnson, taking over Starbucks from Howard Schultz in 2017. Outline how you intend to lead Starbucks strategically by ensuring continued growth and success, whilst simultaneously avoiding any organisational pathologies.
The Case
In 2008, competition in the coffee business was heating up, and Starbucks’s performance had become disappointing. The firm’s stock was worth less than $10 per share by the end of the year. Anxious stockholders wondered whether Starbucks’s decline would continue or whether the once highflying company would return to its winning ways. Riding to the rescue was Howard Schultz, the charismatic and visionary founder of Starbucks who had stepped down as chief executive officer eight years earlier. Schultz again took the helm and worked to turn the company around by emphasizing its mission statement: “to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time”. Food offerings were revamped to ensure that coffee—not breakfast sandwiches—were the primary aroma that tantalized customers within Starbucks’s outlets. By the time Starbucks’s fortieth anniversary arrived, Schultz had led his company to regain excellence, and its stock price was back above $35 per share. In March 2011, Schultz summarized the situation by noting that “over the last three years, we’ve completely transformed the company, and the health of Starbucks is quite good. But I don’t think this is a time to celebrate or run some victory lap. We’ve got a lot of work to do”. Schultz retired a second time in 2017 and was replaced by the COO, Kevin Johnson.
Required:
Assume you are Kevin Johnson, taking over Starbucks from Howard Schultz in 2017. Outline how you intend to lead Starbucks strategically by ensuring continued growth and success, whilst simultaneously avoiding any organisational pathologies.
Every company will create value for customers and shareholders in terms of products and services as well as growing returns. Every company will stay alive forever until dissolvement.
It will be run by directors and managed by the chief executive officer. The quality of the leaders matters for long term sustainance of any company.
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