“Back in charge, Schultz tries to reignite Spark at Starbucks”
–Wall street Journal May 19th,08
Prepared by: Rajesh Kumar, Class: C511 Dated: August 10, 2008
Overview:
Starbucks was enjoying market demand and its stock reached to its highest peak in 2006. Mr. Schultz stepped down as CEO in 2000 but he remained involved with other projects like signing up musicians for Starbuck’s record label and marketing Hollywood films. Due to the continues decrease in the stock’s price for the last two years, Mr. Schultz took back the CEO position this year after several years acting as a chairman. He realized that the company was going in the wrong direction. It needed urgency to change in company before it will be too late. His main theme for café is to create a place between work and office called romance on coffee. He is attempting to transform commodity into social experience. He is known for fixing things that are wrong.
According to Kotter’s Eight Point Model, we like to see all changes that are going on in Starbucks.
Urgency for change: Since last year, Starbucks was loosing its command in market based on price and strategy. Mr. Schultz felt the urgency for turnaround and need for change in company vision and strategy. Finally on January 7th, the CEO was replaced by Mr. Schultz. He saw market had slow down in US and saw a growing market overseas and began to take action immediately. He reduced the number of cafés in US and shifted focus to overseas. He moved the company towards a new phase. He inspired people to move with new objectives. He also focused on new product vision instead of music ...