Everyone's favorite, if not-overpriced coffee chain is making big changes. Before 2008, Starbucks fell victim to a series of bad ideas, namely, over-expansion and increasingly high prices. This resulted in financial loss and confusion. The company lost direction. Now, with help from a new CEO and big ideas, the company is turning itself around and selling microbrews while at it.
The once beleaguered chain once suffered from overly-rapid-expansion-syndrome stuffing stores on every street corner they could find. Indeed, Starbucks stores could be found literally across the street from each other. Competition against itself proved a precarious if not profit draining move.
Once the recession hit, Americans had enough of $4 dollar mocha lattes hold-the-foam. Instead, competitors like McDonald and Dunkin Donuts stepped in with McCafes, and macchiatos a cheaper alternative to Starbucks’ pricey brews. This prompted Starbucks to take a step back and back to its origins. They rehired former CEO Howard Schultz and started a series of drastic changes.
In September, Starbucks rolled out a new line of ready brew instant coffee called Via. It proved a success and revenues are up for the first time since the end of 2008. The latest venture however will probably be the most lucrative.
Schultz brought back an entrepreneurs approach to the business realizing that one size does not fit all. Starbucks is now trying to tailor itself to its customer base. For example, in hotter areas, drinkers prefer cold drinks, while in the colder regions like the Northeast, they enjoy a piping hot cup of joe.
The idea is to make each store unique, while maintaining the Starbucks quality of coffee and espresso. In Seattle, owners created an offshoot of Starbucks called 15th Ave Coffee and Tea. The shop, which Starbucks owns, sells heady microbrews and cheese along with the usual espresso and tea mix.
For Schultz innovation and breaking out of the box is necessary in order to make Starbucks a successful business once again. Stores now are encouraged to adopt a local feel to appeal to customers. They want to get out of that corporate giant feel and more into the independent coffeehouse vibe.
Nowadays, don't be surprised if that new coffeehouse down the street is actually owned by Starbucks. It may not be a bad thing after all.
Written by Lani Shadduck
HULIQ.com
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