Starbucks new CEO is sure! Is he an old acquaintance of China's consumer market?!

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On September 1st, local time in the United States, Starbucks announced that it would formally appoint Laxman Narasimhan (Laxman Narasim Han) as its next CEO on October 1st, 2022, and hand over with current CEO Howard Schultz. He is expected to take up the post of CEO and join the board of directors on April 1, 2023.

Howard Schultz will continue to serve as interim CEO until April 1, 2023 and serve as an adviser to Narasimhan until 2023, while remaining on the Starbucks board. During the period from his tenure to CEO, Narasimhan will work with Howard to manage the company and team, get in touch with the brand, corporate culture, and participate in Starbucks' reshaping program.

According to Starbucks officials, Narasimhan has nearly 30 years of experience in leading and advising global consumer-oriented brands. Before joining CEO at Starbucks, Narasimhan worked at McKinsey for 19 years, where he was responsible for the consumer, retail and technology businesses in the United States, Asia and India, then went to PepsiCo as Chief Commercial Officer and Chief Financial Officer of PepsiCo America Foods, and then served as CEO for two years at Reckitt.

During his tenure in the three companies, Narasimhan is known for its rich operational expertise and has a very good track record in developing goal-oriented brands. Howard invited Narasimhan to the post of CEO this time, his eyes are on his decisive strategic vision and decisive execution.

During the time of Reckitt (Dilu, Durex, Weiting, etc.), Narasimhan solved a number of thorny problems in the company at that time, including cyber attacks, production failures, and failure of new product launches. It took two years to get a number of underperforming brands back on track and regain the trust of investors.

Today's Starbucks is also facing a number of thorny problems and needs a manager who can provide strategic changes now and in the future, and implement them in place. At present, the biggest thing Starbucks faces is operation, on the one hand, employees in the United States continue to form trade unions, and the performance of an overseas market has declined.

Although some of the people and things that will affect the follow-up operations of Starbucks have been solved when Howard returned to Starbucks as interim executive in April, one person's strength is not enough, and Howard's return is not a long-term solution. It still needs someone younger, more far-sighted and highly executive to take over, so after the return, it has indicated that a successor will be found this fall.

Although Howard has solved some of the problems and said he will reshape Starbucks' corporate culture, Howard alone is not strong enough for rising labor unions, rising employee turnover rates and declining performance in the Chinese market. Another reason for inviting Narasimhan is that he has very deep and rich qualifications in the consumer industry and overseas market management, of which the United States and Asia are the two largest markets of Starbucks.

When Narasimhan first took over as CEO, he came to China in person, visited a number of Chinese brand stores and met with customers and employees. At that time, he was in China to share his plans and focus with global employees, and it was the first time that Global CEO held a global staff meeting outside the UK.

Starbucks has 5671 stores in China, according to its report for the third quarter of 2022. Affected by the epidemic, Q3 net income in the Chinese market fell by 40%, same-store transaction volume fell by 43%, and same-store sales fell by 44%. In spite of this, the Chinese market is still one of Starbucks' most valued markets, so Narasimhan may be the first to help the Chinese market recover after taking office.

Howard, on the other hand, will continue to develop a new framework to be implemented together with Narasimhan. Some market analysts believe that even after Narasimhan officially takes over next year, there will be many important decisions made by operators and things that need to be judged right or wrong, it will still be Howard's home court. Some analysts believe that since Howard chose Narasimhan, he believes he has the ability to manage Starbucks.

I hope that the appointment of Narasimhan this time will bring a new chapter to Starbucks.

Photo Source: Internet