Case Study: Howard Schultz's Starbucks Challenge

Case Study: Howard Schultz’s Starbucks Challenge

In the article “Howard Schultz’s Starbucks Challenge” as printed in the e-text, the reporter sets the stage of a struggling company looking to rebound to its former glory. According to the article, the company stock was down by 44% over 2007 and while sales were up, was in need of an overhaul (p. 34). The original founder, Howard Schultz, would be returning as CEO.

What kinds of management challenges face Howard Schultz at Starbuck’s? The article describes Schultz as a visionary. But being a visionary doesn’t mean he would have the right strategy to get Starbucks growing again. The first of the challenges Schultz would face would be in the four basic tasks of management: Planning, Organizing, Leading, and Controlling. Although he appears to have had some continuous input into the operations of the company, he would have to come back into his role of CEO with a vision he could effectively and efficiently communicate and goals that would move the company toward that vision. He appears to have stuck with a familiar strategy, but it is in the leading, organizing, and controlling that he appears to have an advantage. The article warns of a returning CEO with nostalgia, but it doesn’t look like Schultz was guilty of that danger. He has clearly established an effective turnaround management. While the stock has shown some decline in the past months, it has generally grown in the last five years. (http://finance.yahoo.com/echarts?s=SBUX+Interactive#symbol=SBUX;range=5y)

Building a competitive advantage would be a challenge. The article references McDonald’s plans to add coffee bars and baristas. It is now six years since the article was written, and McDonald’s has done just that. But Starbucks is growing, so it appears they are doing something or providing something consumers want that they don’t get from McDonald’s—my guess would be quality. While Starbucks offers other products, their primary focus is...