Prioritizing goals like efficiency and volume over exceptional customer experiences eroded the company’s strongest selling point.
June 26, 2024
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Starbucks is struggling. It has strayed from its successful strategy of offering customers exceptional experiences and, in the process, has commoditized itself. This article analyzes where it went wrong and offers ideas for how the company can turn itself around. It holds lessons for other companies that compete by providing customers distinctive experiences.
Starbucks is in trouble again. In its last quarterly-earnings report, it announced disappointing results, including a 4% drop in same-store sales (11% in China, its second-biggest market). After that announcement, its stock plunged. (It is still well below its 12-month high.) And its founder and three-time CEO Howard Schultz once again fired off a missive on LinkedIn pleading with Starbucks’ current leaders to rediscover and embrace the company’s core purpose, its reason for existence.
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Louis-Étienne Dubois is an associate professor of creative industries management at Toronto Metropolitan University’s School of Creative Industries.
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New!
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Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Customer Focus. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to keep your customers—and their most important needs—front and center.
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