Onward at Starbucks
In 2007, Starbucks found itself in serious trouble. The multinational coffee chain seemed to have lost its way by focusing on expansion and efficiency at the expense of quality. Frustrated, company founder Howard Schultz sent an e-mail complaining about the "commodification" of the company's brand and the"watering down of the Starbucks experience." Customers began spending less money per store visit; new stores cannibalized the sales of existing outlets. At the same time, McDonald's entered the espresso coffee market, mocking Starbucks headquarters in Seattle with billboards declaring "FOUR BUCKS IS DUMB," referring to the high cost of a Starbucks latte. Bloggers and social media sites launched attacks. Starbucks' stock price dropped 42%.
In 2008 Schultz rejoined Starbucks as CEO. One of his first acts was to shut down all Starbuck stores for three hours to retrain baristas on making espresso drinks. (The closure cost the firm $6 million in sales.) He and his leadership team then introduced the following Transformation Agenda.