Chapter 12 our text describes new-venture creation, the transition of new ventures into established businesses, and the rescue of established but struggling ventures (pg. 403). Our texts explains the various internal and external changes that pose a threat to a company's sustainability, including economic and social change (external), and strategy and management failure (internal).
As I've talked about in earlier entries, there was a period where Starbucks failed to anticipate changes in the economic environment. Starbucks started suffering financially, dropping in profits and stock price, when the recession took a toll on the U.S economy. From an internal decision making perspective, Shultz explained that the company placed too much emphasis on growth through expansion of stores. They started to lose the "romance" of the coffee house experience that has been an integral part of the company's strategy of differentiation.
To overcome the problems the company was experiencing, Schultz returned as CEO and led the company in strategic changes such as a cutting stores, "removing distractions, such as the music production business and clutter, such as teddy bears," incorporating healthier options (in line with changes in consumer tastes and preferences), and increasing advertising, according The Guardian. Additionally, Schultz led the company forward in its pursuit of differentiation, calling for a unique design for each Starbucks store that reflected the local community. Through these changes, and continued innovation, marketing, and attention to the needs of stakeholders, Starbucks has achieved corporate renewal.
No comments:
Post a Comment