Starbucks Corporation: The New S-Curves

Abstract

By the end of fiscal year (FY) 2010, Starbucks's painful, three-year transformation agenda was essentially complete. Starbucks began FY11 poised to focus on a new blueprint for growth described by CEO Howard Schultz: “Sourcing, roasting, and serving high-quality coffee will remain our core, but we are also pursuing sustainable, profitable growth with a more diversified, multichannel and multibrand business model.” Excerpt UVA-S-0239 Rev. Jan. 6, 2015 STARBUCKS CORPORATION: THE NEW S-CURVES Despite being a public company for 20 years, Starbucks is in the early days of its growth and development. —Howard Schultz, chairman and CEO of Starbucks By the end of fiscal year (FY) 2010, Starbucks' painful, three-year transformation agenda, which included closing more than 900 stores, terminating 18,700 jobs, replacing the senior leadership team, and implementing new Lean store practices to achieve operational excellence, was essentially complete. Starting with the return in 2008 of Starbucks founder and board chairman Howard Schultz as its president and CEO, Starbucks had pulled itself back from the brink of “destruction” after an unsustainable store expansion strategy coupled with a global economic recession had the company's future looking uncertain and its stock losing halfits value. Finishing FY10 with a record $ 10.7 billion in revenue and a first-ever shareholder dividend, Starbucks began FY11 poised to celebrate its 40th anniversary by focusing on a new blueprint for growth described by Schultz: “Sourcing, roasting, and serving high-quality coffee will remain our core, but we are also pursuing sustainable, profitable growth with a more diversified, multichannel and multibrand business model.” . . .