Do you like Starbucks? When I read Toyokeizai, a newspaper, I found a remarkable article about its management strategy. Generally speaking, each company should have each corporate identity, but there are hundreds of firms that rationalize the management and lose their identities. They usually experience a decline in performance. Starbucks was one of them. However, it’s becoming one of the most famous coffee shops in the world and everybody loves it. What happened to it? Why did it become popular again? I researched on the history and discovered some simple strategies.
Around 2000, Starbucks created a comfortable space and customers spent a luxurious time with the wonderful smell of the coffee. Several years later, there were a lot of Starbucks in many places. According to ZAi Online, the number of shops in Japan had been increasing all the time since the first one opened in Ginza. But what was most astounding is that whereas there were 854 Starbucks all over Japan in 2008, and the sales volume had increased by 100 billion yen, the profits were down by 55 billion yen from 2007 to 2008. Then, the sales are increasing and the profits are up now. I’m going to tell you why the profits were down one time but restored.
As I mentioned above, that’s the rationalization of management and taking back the corporate identity. For example, baristas had stopped grinding coffee beans at the shops and had started doing it in other places to serve a cup of coffee quickly. This change killed the nice smell of the coffee. Also, the design in all shops looked the same, for they had opened here and there and the new shops could not help simplify the design. Because of these strategies that promoted greater efficiency and productivity, Starbucks lost its appeal by itself.
Luckily, Howard Shultz, the CEO of the company, knows the importance of Starbucks’ identity. First, he decided to drive prices up. He temporarily closed 7100 shops in the U.S. and gave training for the baristas again. Then the company developed the new menu of blend coffee and restarted the way to grind coffee beans in each shop.
To conclude, companies should not lose a corporate identity. As a result, Starbucks was failing, but improving better. When I find a job, I’d like to check over each character of the company and choose the best one I can conform to.
(401 words)
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