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Wake Up and Smell the Coffee

Written by: Tom Peters

Article Overview: Just when I was beginning to wonder whether another great experience was going to surrender to the short-term gains of operational excellence, Howard Schultz gave me faith.

Wake Up and Smell the Coffee

Just when I was beginning to wonder whether another great experience was going to surrender to the short-term gains of operational excellence, Howard Schultz gave me faith. I love this memo to his executive team laying out his concerns that the Starbucks brand is in danger of commoditization. I started noticing this some time ago, and I often mentioned to my colleagues that Starbucks was beginning to feel a lot more like a fast food restaurant than a cool place to hang. I support being a good steward of the business by watching costs, but not at the expense of losing the brand equity gained by being distinctive. Starbucks recently took another hit when the coffee at fast food staple McDonald's won a taste test conducted by Consumer Reports. While I wouldn't argue that the Starbucks brand is in its death knell, I would argue that efficiencies and economies of scale have introduced a virus in need of serious care. And it looks like Howard Schulz just might be the healer they need.

As I make this note, I am sitting in my local coffee shop. The owner told me about a new shipment of Peru Norte Especial beans he just got in and how he had roasted it to City+ to bring out its subtleties. Like an expert sommelier, he described it in wonderfully delicious detail. I can smell the breads baked on site and hear the wonderful hissing of the espresso machines. Howard would like this place. Oh, and by the way, I am sending in this dispatch using the FREE wireless connection from this wonderful coffee shop. Now this feels like a third place! Go get 'em, Howard!

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Article Tags: brand equity, breads, coffee shop, commoditization, consumer reports, cool place, death knell, economies of scale, espresso machines, executive team, fast food restaurant, food staple, healer, howard schultz, howard schulz, operational excellence, starbucks, steward, subtleties, taste test



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