COFFEE BUSINESS

Starbucks has been an inspiration for being a successful coffee chain, but you could see problems ahead due to the increased competition. [Editor's comment: Do you think Starbucks has lost its soul?]

Here are two excerpts from The Economist:

Mr Schultz says he wants to slow down the pace of expansion in America and to close struggling locations while accelerating expansion overseas. He also wants to improve the “customer experience” at American stores and streamline management. There is no “silver-bullet” he said, but rather a scaling back of the expectations of a company famously named after the coffee-loving mate of the Pequod in Herman Melville’s novel, “Moby Dick”. Ominously, Frank Starbuck comes to a sticky end when he eventually comes up against the great white whale. (Not enough froth, Economist, 01/08/08)

Analysts and investors welcome Mr Schultz's return because it shows the company is taking action to correct its drift. The main architect of Starbucks' expansion is seen as the best person to lead a return to the firm's roots as a specialist coffee shop with a local touch. McDonald's, by contrast, having just recovered from its own overexpansion, is venturing into a whole new market. May the best latte win. (Coffee Wars, Economist, 01/10/08.)

The Economist has started a blog and audio & video center.



Related: My post, WAKE UP AND SMELL THE COFFEE.