by: Dominic Basulto
The return of Howard Schultz to Starbucks in the CEO role -- combined with the deluge of press attention about the looming showdown between McDonald's and Starbucks for the hearts and minds of coffee drinkers around the world -- raises a very interesting question: To what extent can the founder of a company spark a turnaround by returning to the CEO role?
With the exception of Jobs at Apple, however, these founders have produced mixed results thus far in their turnaround bids. Pink notebook PCs at Dell and "Talk to Chuck" ad campaigns at Charles Schwab are nice, but how much do they really add to the bottom line? Anyway, investors were upbeat about Schultz's return, driving Starbucks stock 8% higher on the news. Is this a quick hit or part of a long-term turnaround at the company?
Influx Insights seems to think the burden of proof is with McDonald's, but I think the burden of proof is really on Starbucks. The company's international expansion plans - in places like Russia and China - are not going as well as they should be, and the company is GAP-ifying itself with a Starbucks on seemingly every corner. On the other hand, McDonald's has mastered the game of international expansion (its store in Pushkin Square in Moscow is still legendary), while the company has proven proficient in thinking up innovative new food concepts (Chipotle Mexican Grill - one of the hottest Mexican food chains in the USA - is a McDonald's spin-off) to drive top-line revenue growth.
[image: Howard Schultz of Starbucks]
Original Post: http://endlessinnovation.typepad.com/endless_innovation/2008/01/starbucks-turns.html
I was disappointed when Howard Schultz announced that Starbucks would be discontinuing the breakfast sandwich because, among other things, its aroma competes with that of the coffee. While I'm no fan of Starbucks food in general, it is usually not because they have an aroma, but rather because they don't. Wouldn't fresh baked goods be a big improvement?
A founder, especially a brilliantly successful one, has a unique right to be unyielding in defense of his concept. Nonetheless, one wonders how many others would stand against the smell of fresh-baked goods in a coffeehouse?
That is a question the stockholders might want to put to market research.