China Food

Schultz’s 38 thoughts help us understand why Starbucks is enduring


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Schultz’s philosophy in business philosophy and enterprise management.
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Schultz, known as the “father of Starbucks”, is returning.
According to the information on Starbucks’ official website on March 16, Kevin Johnson, the current CEO, plans to retire in April, and Howard Schultz, the honorary chairman of the board of directors, will be the CEO of Starbucks for the third time.
 
“I didn’t plan to return to Starbucks before, but I know the company must transform again to meet a new and exciting future,” Schultz, 69, said in a statement. “When you love something, you have a strong sense of responsibility. When you ask for your help, you will lend a helping hand.”
 
During his first term as CEO from 1987 to 2000, Schultz led Starbucks to expand rapidly in the North American market, set off the “second coffee wave revolution”, and finally successfully listed in 1992. In 2008, when Starbucks fell into the first recession crisis and had to close more than 600 stores due to losses, he reappointed as CEO and finally turned the tide and saved Starbucks. When he stepped down as the executive chairman of Starbucks in 2018, Starbucks reached a new height: annual revenue of US $24.7 billion, profit of more than US $4.5 billion, 10-year increase of stock price of 1350%, number of stores of more than 28000, and firmly ranked the first coffee chain brand in the world.
 
This time, he was “ordered to be in danger”. In the two years since the outbreak, Starbucks began to grow slowly. In 2020, Starbucks’ annual revenue and profit were lower than those in 2018, and the profit level in 2021 did not return to the peak in 2018.
In the Chinese market, in the fourth quarter of 2021, the same store sales of Starbucks decreased by 7%, the average customer unit price decreased by 5% and the trading volume decreased by 2%. In the total number of stores, Starbucks (5557) was also surpassed by Ruixing coffee (5671) for the first time.  
 
The market is also full of expectations for Schultz’s coming out again, because he is as important to Starbucks as jobs to apple. He developed Starbucks from 11 stores selling roasted coffee beans to the world’s largest coffee brand, creating Starbucks’s most brilliant record and creating Starbucks’s culture and competitiveness.
 
Some people say that excellent leaders are usually learning leaders, and so is Schultz. In the decades of leading Starbucks, he said “I reinvented myself at least three times”, and finally grew from an ordinary marketing practitioner to an outstanding entrepreneur and leader. This paper combs Schultz’s ideas in business management and shaping corporate culture, so as to provide an angle for interpreting the secret of Starbucks’ success.

positioning of Starbucks
1. If we rebuild the Italian coffee shop culture in the United States, Starbucks will become a great experience in people’s life, not just a retail store selling coffee beans.
 
2. Starbucks is not only a coffee company serving the public, but also a humanistic company providing coffee. Humanistic care is more challenging than any marketing strategy.
 
3. We provide not only coffee, but also people’s emotional interaction, sense of belonging and sense of scene.
 
4. In the 1990s, coffee shops became an important place for people’s social activities. They needed an undisturbed gathering place and a “third space” outside their work and family.
 
5. People don’t know what they need is a safe and comfortable gathering place with neighborhood friendship. They don’t know they will fall in love with espresso. But when we gave them these things, their excited reaction completely conquered us.
6. Meeting the innate communication needs of mankind is deeply rooted in Starbucks’ DNA, which is also the reason why Starbucks has been enduring for 50 years and will continue to be popular in the world.
about the balance between business profit and social conscience
7. Finding a balance between profitability and social conscience is a major characteristic that distinguishes Starbucks from other consumer brands.
 
8. I have never given up my pursuit at any time: from the perspective of social conscience, Starbucks should find a balance between personal, profit and shareholder value.
 
9. Balance has always been a challenge for Starbucks: the balance between taxation and philanthropy, the balance between shareholders’ interests and social conscience; The balance between profit and humanity; Balance between regional characteristics and global positioning.
 
10. Taking responsibility for the community, shareholders and greater good deeds means carefully balancing their relationship with the competitive profits of the enterprise. You must be very convinced of your values and honestly grasp the balance between the enterprise and the performance of social responsibility.
 
11. Take the performance of Starbucks as the leading company. For entrepreneurs and executives, “solving social problems” is not a derivative of “many decisions to improve financial performance”, but the same root. “Humanity” and “booming business” are not life and death competition. If the two can coexist, the enterprise will benefit a lot.

management
12. If a company starts to decline or stops developing, it is likely because they no longer invest in the required manpower or operating facilities. Most people will underestimate the importance of this investment.
 
13. Data can be used as a standard to measure the success of the company, but it can not really explain the secret of Starbucks’ success.
 
14. What I want to build is a company whose long-term prosperity is based on its competitive advantage based on its own values and guiding principles.
 
15. The passion and contribution of our partners are our first competitive advantage. Without this, we’ll lose everything.
 
16. Our competitive strategy is to win customers with the best coffee, the best service and the most cordial atmosphere. Our victory depends on fair competition, dignity and high principles.
 
17. The two enterprise systems of “coffee bean stock” and full-time medical insurance, including part-time employees, seem to some people to be contrary to the business philosophy of “profit maximization”, but in fact, they are the engines that make our business model effective.
 
18. If innovation initiatives can be carried out, they must reflect and promote the enterprise’s values, rather than just pursuing profits.
 
19. For those who want to run a business, my advice is: once you have figured out what to do, you should find someone with professional experience, and his (or her) experience and specialty can guide you. They know where to find “minerals”. If they have bold ideas and actions in their work and prove to be successful, they can help you do the same thing.
 
20. A successful enterprise cannot rely solely on exciting ideas. Before creative ideas can be effectively implemented, rules and structures, systems and efficiency need to be laid in advance.
 
21. I reshaped myself at least three times, each time at the fastest speed. When I first started my business, I was a dream seeker. A 32 year old young man knocked on the door of potential investors in Seattle to raise funds for his business plan. After that, I became an entrepreneur, founded “every day” cafe, took over Starbucks and built a fast-growing company. After that, I became a professional enterprise manager. With the increasing size of the company, there are more and more decisions that I need to authorize others to do. Today, I am the leader of Starbucks, a visionary and high spirited leader who keeps the flame burning.
 
22. When an enterprise develops to a certain stage, an entrepreneur must manage the company in the way of professional managers. I have to hire people who are smarter and more qualified than me in some areas and let them make decisions.
 
23. Most people’s entrepreneurial spirit at the beginning of the enterprise is better than the leadership in the mature stage of the enterprise.
 
24. To some extent, you must separate yourself from the stock price and focus on running the business. Whether the stock price is high or low, you must maintain a high mood.
 
25. Starbucks has the ability to establish and operate profitable stores because we always adhere to a simple and ambitious economic model: the ratio of sales to investment is 2:1. In the first year of operation, Starbucks stores can earn $2 for $1. From the perspective of Starbucks history, Starbucks stores in the United States can benefit an average of about $1 million a year. Few retail enterprises can have the same brilliance year after year as Starbucks.
 
26. A well-designed brand is the most valuable intangible asset of a company. Although it can not bring direct benefits, it can make the company stand the test, and giving up it means chronic suicide.
 
27. The most powerful and lasting brand is built in people’s hearts. Such a brand has a solid foundation because it is endowed with spiritual power, rather than relying solely on the indiscriminate bombing of advertising.
28. More importantly than scale, our brand can be famous for the quality of coffee and the values it contains. These values are: sharing, respect, connection, dignity, humor, humanistic care and responsibility.

about shaping corporate culture
29. Cultivating a people-oriented atmosphere is the essence of Starbucks’ corporate mission. In order to realize this ideal, we should value employees, stimulate their creativity, work together to create long-term benefits, and share results with the team.
 
30. I want to create the best coffee brand, create a well operated and responsible enterprise for employees, and make our people proud of working here; This enterprise cares about them and is a community with them.
 
31. I want to create a corporate culture in which individuals can not only be satisfied, but also be respected and admired by others.
 
32. Regardless of the size of the enterprise, setting the right tone at the start-up stage is crucial to the long-term success of the enterprise. One of the most important things you do at work every day is to share your values with others, especially new employees.
about love and dreams
33. I don’t have small dreams, I have big dreams. If you want to build a great enterprise, you must have the courage to dream great dreams.
 
34. Only those who dare to take the road few people take, create new businesses, invent new products, establish lasting enterprises, and inspire the people around them to give full play to their talents can set foot on the commanding heights of success.
 
35. Most people turn around and leave when they are rejected by a job. The same situation has happened one after another in my life. I have been told again and again that it is impossible, but I will still try my best to fight and argue, and finally turn things around.
 
36. Life is often composed of a series of mistakes. What we attribute to luck is not entirely out of luck. What you should do is seize the moment and be responsible for your future.
 
37. The dream of entrepreneurs is to come up with a great idea to attract investors and start a sustainable and profitable enterprise. But at first you have to learn to be a dog with a clamped tail. If you don’t try to be a dog that can fight and clamp its tail, you will get the worst end: mediocrity.
 
38. People have to have the spirit to face up to what people don’t see and catch people involved – no matter who says no, they should stick to their own path.
 
Source:
[1] Injecting the heart by Howard Schultz and dolly Jones young
[2] All the way forward by Howard Schultz and Joan Gordon
[3] From scratch by Howard Schultz
Author: Tian Shanshan; Editor: ordinary; Source: Lishi Business Review (ID: LiBusiness), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246); Foodaily Expo 2022] in line with the original intention of providing the whole value chain and one-stop industrial innovation services for the industry, foodaily Expo 2022 (2022.05.31-06.02, Shanghai) is further upgraded. In addition to the upstream and downstream of the food industry, it also covers and gathers multiple resources such as e-commerce, social media, traffic, channels and capital, aiming to bring you an annual innovation feast. Here, products, content, technology, marketing and other aspects related to food & brand innovation will be presented in the form of “professional exhibition + innovative content + interactive experience”, breaking through and differentiating in the consistent form of industry exhibition.

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