The gentleman's name is Howard Schultz, but when you find out that Starbucks Corporation, a company with a value of more than িয়ন 60 billion, is its chairman and CEO, it's nice to hear the name. Adding to that, the gentleman's personal wealth, about ২ 2.2 billion, notes that starting from scratch, he has taken his company to one of America's top 100 brands in just 30 years; Did you fall in love with this name this time?
Howard Schultz is an entrepreneur who started a single coffee shop in 1986 and has now built a giant company of 20,000 outlets at an incredible pace. But to your surprise, the company went bankrupt in 2006 as a compensation for its mistake, and even more surprising is that Schultz made even bigger mistakes in correcting that mistake! How How to Get Out of Mistakes and Bigger Mistakes Howard Schultz can be a great lesson for all entrepreneurs in the world
Schultz was the first person in his family to go to college. He began his career in sales and marketing, ending as director of marketing for a company called Starbucks Coffee Company, whose business was selling coffee beans and tea leaves. Then he started a coffee shop called 'Il Giornale'. A couple of years later, Schultz bought Starbucks Coffee Company, renamed Starbucks Corporation.
The pace at which Starbucks Corporation has grown since then is unbelievable, with Schultz opening 140 stores in 1992, bringing the company's value to 261 million! Schultz stepped down as CEO in 2000 to become chairman, with the aim of moving away from the company's operational work to focus on growth. In this capacity he succeeded impossibly; By 2006, Starbucks had 13,000 outlets worldwide and a growth rate of an average of about two outlets a day! But the problem started in 2006. Someone had to do something about the first problem, the Global Economic Recession. The recession was going on all over the world and there was nothing but an expensive cup of coffee luxury. Ordinary people could not like foreign rich companies like Starbucks next to local small enterprises. But the bigger problem was inside Starbucks.
The position of CEO was the most important in the type of business of Starbucks Corporation, people not only come to the coffee shop to have coffee, they come to experience an environment. Other big companies may have succeeded in bringing in CEOs from outside, but in Starbucks' business model, the CEO is the most important person who left Schultz to focus elsewhere.
What Schultz did after coming out of this hostile environment was suicidal. Schultz decided to cut costs. The decision was made to use powdered coffee instead of whole coffee beans which ruined the freshness of coffee, brought sandwiches for breakfast, profit margins may have increased but instead of the smell of coffee the smell of cheese filled the whole shop.
Last but not least, non-coffee products, CDs, DVDs, books, magazines started selling coffee at Starbucks! The company may have made a profit, but it didn't take long to learn the consequences of losing brand identity. The company's share price fell 42 percent, and many stores closed. Schultz later explained in one line, "Starbucks had begun to fail itself."
It was at this point that Howard Schultz realized his mistake, and sat down to take Starbucks Corporation back to its former place.
This story is about an entrepreneur named Howard Schultz, from a company called Starbucks Corporation. Start flying from zero, then crash and fall again.
In the previous episode I wrote about how Starbucks Corporation got into trouble. One of the main reasons for this was to leave the position of CEO of Howard Schultz and focus on the growth of the company which was suicidal for this type of company. The growth of the company has been abnormal but Basic has had problems.
In January 2006, Howard Schultz decided to return to his position as CEO and began the fight to save Starbucks Corporation. It was a 180 degree battle to change company values. In his words, “large numbers that once captivated me — 40,000 stores! —Are not what matters. The only number that matters is "one." One cup. One customer. One partner. One experience at a time. We had to get back to what mattered most. ” The start of the war was spectacular, with Howard Schultz deciding to close 6,100 stores in one day, the company losing 8 million that day. And last but not least, managers are told to forget sales growth, just focus on customer experience. The task in front of investors and Pakna Media was not easy at all, but Schultz did not pay attention.
Schultz focused on getting closer to customers using social media. The Facebook-Twitter page has been redesigned, along with a site called MyStarbucksIdea.com that allows anyone to share their ideas and vote for others.
The best ideas were sent to company high officials for implementation.
Hurricane Katrina was a blessing in disguise for Starbucks Corporation when Schultz announced 50,000 hours of volunteering to rebuild New Orleans. This activity served as a metaphor for Starbucks' inner restructuring.
All of these efforts began to pay off in late 2009 when income growth was seen in the third quarter. More importantly, customers started coming back again. The process was not easy. In the USA itself, over 700 stores had to close. Schultz saved ৮ 560 million from operating costs that were invested in improving customer experience. Social media customer engagement efforts were also successful, with their Facebook page becoming one of the most popular pages in history.
Howard Schultz is a man who learns from mistakes. In 1990, he launched a carbonated coffee called Mazagran, which was a complete failure. The funny thing is that Schultz still keeps a bottle of Mazagran on his desk so he doesn't forget to "celebrate, learn from, and don't hide from mistakes."