Coffee review

This time, CEO's letter writes about high-level adjustments that have a far-reaching impact on the future of Starbucks.

Published: 2024-11-02 Author: World Gafei
Last Updated: 2024/11/02, On the 21st of last month, Starbucks announced its results for the third quarter of fiscal 2016. Compared with fairly good revenue and same-store growth in 2015, Starbucks' growth this year has been somewhat disappointing, below analysts' expectations, and the flagging European market has still not been helped. In addition to the cold data, within this multinational company with 300000 people

On the 21st of last month, Starbucks announced its results for the third quarter of fiscal 2016. Compared with fairly good revenue and same-store growth in 2015, Starbucks' growth this year has been somewhat disappointing, below analysts' expectations, and the flagging European market has still not been helped.

Beyond the cold data, there is bound to be some scepticism and uproar within the 300000-person multinational. It was against this background that Starbucks CEO Howard Schultz wrote an open letter to employees, which was also posted on Starbucks' official Newrooms for public reference.

The open letter, which begins with Dear partners, is not perfunctory and lists a series of personnel changes and several major changes to the company's strategy that will begin on September 1.

"when the first baking store opened in Seattle, I said it was a metaphor for Starbucks' future in coffee innovation, store design and consumer experience." Schultz wrote. This is used to pave the way for Starbucks' strategy of opening more high-end stores.

In addition to the baking factory stores in New York in 2018, which have been identified in Shanghai in 2017, the selected stores, which currently account for 2000 of the 24000 stores around the world, will also accelerate their opening. Of course, these coffee shops that emphasize the origin of coffee beans and the higher quality of pastries also mean higher average consumption.

Given that Starbucks changed its rules on Starbucks cards in February this year, where members' rewards will be linked to the amount of money spent rather than the number of times spent, the question Starbucks is focusing on is: how to get each consumer to spend more money on it? These are the indicators that can really improve its per-store earnings and make its results better.

Back to Starbucks' focus on high-end stores, it has made a series of high-level personnel changes in order to better implement the plan.

These include the appointment of Cliff Burrows, the regional head of the North American market, as the direct person in charge of the global expansion and development of bakery stores and Zhenxuan stores, while taking into account the high-end bakery brand Princi, which was acquired in July, and the tea brand Teavana, which is expected to launch in the global market by the end of this year.

After that, Cliff Burrows will be responsible for the growth and operation of these stores, and Schultz will directly lead the design and user experience team.

This is a new job Schultz has found for himself, which largely reflects his attention to Starbucks' high-end line and Starbucks' expectations for this product line. In contrast, after a burst of praise for COO Kevin Johnson in the letter, Schultz entrusted him with the job of coordinating the responsibilities of the senior team, giving him time to do something else.

Of course, after focusing on the separation of high-end stores, someone is also needed to be responsible for the revenue and growth of normal stores, and John Culver, head of the Asia-Pacific region, became the head of the new Global Retail Organization department.

Apart from the weak European market leaders, the other two regional heads have been appointed to new positions and have not announced who will replace them as regional heads. One guess is that Starbucks may break the division of regional markets in the future. Given the European market where the results were targeted last quarter, the adjustment does not seem too surprising.

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