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  • Writer's pictureFIC Hansraj

The Fault In Our Star(bucks)

What proudly stands now as the biggest coffeehouse and the third largest fast food chain in the world once almost did not see the light of day. Years after its inception in 1971, Starbucks was treading the narrow roads of success when it virtually hit rock bottom. Creating the concept of a 'third home', Starbucks sprung higher than ever and has never looked back since. Offering the Nirvana of time away from home and work, Starbucks is a haven for a perfect escape to live in the moment.

Starbucks started its journey to revolutionize the coffee industry when it first opened its door in Seattle, Washington, United States. Igniting the vision to reality, Jerry Baldwin, Zev Siegel, and Gordon Bowker sow the seed of what would accentuate the coffeehouse mogul today. The company traversed into the hands of Howard Schultz in 1987 when he bought it for $3.8 million. The coffeehouse solemnized with success in its initial days until a gloomy sky formed to rain on its parade.

 The success story of Starbucks
The success story of Starbucks

Cloudy with a chance of failure

The sight of the green Siren with her long, wavy hair instantly transports one to wonder about the accolades of the company, but none catch glimpses of the starry nights along the way. Starbucks has had its share of failures to reel out.

Despite the ubiquity of the coffeehouse across the globe, the $113.86 billion valued company doesn't seem to thrive in the land of down under. The Seattle-based chain that started during the 2000s slowly grew to nearly 90 locations by 2008. Its attempt to expand in Australia was shunned despite the continent’s deep love for coffee. By the end of 2008, the company had to shut down 70% of the underperforming locations leaving only 23 stores across the continent.

To make things worse, the quality of the product and service and the inability to adapt to the customer's needs were highly criticized. Sales fell and the stock price dropped from $37 to $7.83 without the creative leadership on coffee. Additionally, the business had to close 977 locations and lay off 18,000 workers all thanks to the Great Recession of 2008. The reputation of Starbucks was in utter disarray.

All adds up when the company tries to one-up its performance without taking into account the need to develop Starbucks' appetite for its consumers. They rapidly expanded the empire without slowly integrating the people's needs, leading to self-cannibalization among its different outlets.

The magical song of the Siren

Grandes on the table and laptops back into the store, Starbucks gained its fans back. Everybody deserves second chances, and Starbucks created something people can’t forget! It collected all the scattered pieces and cracked the code to solve this puzzle of failure. Quality and experience, are two things that separate a Starbucks drink from any other cup you have in your hands. Starbucks focused on these two aspects to rebuild the lost empire.

The return of the old CEO, Howard D. Schultz had the coffee brand stand on its feet again. Schultz had the company focus its attention back on the customers and all the pieces started to come together. In March 2008, Starbucks rolled out a “my Starbucks idea” to collect customers' opinions regarding the improvisation of the services offered by the brand and also to connect with the population. It implemented some ideas like the introduction of frappuccino, the free wi-fi on a comfy chair demands and a lot, bonded with the folk, and gained the loyalty of the customers - its greatest asset.

The recession was a huge blow to the brand; profit declined by 98 per cent over the fourth quarter of 2007, and the magic was fading. But a wave of Howard’s wand gets the ball rolling up north. The strategies implemented by him put the graphs at the tavern. The sales increased from a low of $5.4 billion in 2008 to around $9.8 billion in 2009 and the song of the green siren started working its magic again.

The brand focused on creating a bond with the customers through the social media handles, “keep calm and have coffee” and the customer walks out of the store with a satisfying Starbucks cup in his hand. It introduced various snacks and coffee desserts and a cup to give as a gift, Starbucks created a luxurious world for its customers and was rewarded for the same with soaring profits.

The way of coffee

The vitality of Starbucks has widespread across developed nations. It has become so popular that it is now considered bad luck to start the day without a cup of coffee in hand. Starbucks has truly established itself as a purveyor of the greatest coffee in the world, gaining this coffee hustle culture in both developed and developing nations. While all of this looks like plain sailing on paper, there indeed exists a time when Starbucks was spinning its wheels. They faced the music, danced to the beat, and made it to see the light at the end of the tunnel.

Author: Mananpreet Kaur Uppal, Hausianmuan Samte

Illustration By: Keshav Sharma and Piyush Malik


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