At class on this week we had a discussion about the struggles Starbucks is having of late.  In their quest to grow, Starbucks gave up some of what made the “Starbucks experience” special and their products, therefore, became less differentiated from the competition in pursuit of more market share and sales.  The last few years have been especially difficult for them including the closure of hundreds of stores and now they find themselves exposed to attack by McDonald’s, something that would have seemed unthinkable only a few years ago.

Here are some articles I dug up from a couple years ago that chronicle the beginning of the realization by the executives of Starbucks that drastic measures were in order, including a memo written by Chairman Howard Schultz sent to his employees entitled “The Commoditization of the Starbucks Experience.”  The one titled “No Romance Please…” is actually a letter to the editor and I’m guessing the guy that wrote it is the kind of customer McDonald’s is targeting these days, although recently Starbucks has attempted to persuade people that they aren’t as costly as people think they are.  I’ll post some of those kinds of articles later.

As always, you will need to use your NetDirect login ID and password to access the items at at ProQuest (use the ProQuest/tinurl.com links if the WSJ links require you to login and you don’t have a WSJ subscription).

Starbucks Chairman Says Trouble May Be Brewing; Brand Could Be Compromised, Schultz’s Blunt Memo Warns; ‘Time to Get Back to the Core’. Janet Adamy. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 24, 2007. pg. A.4

Text of Starbucks Memo; Online edition. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 25, 2007.

Starbucks Stirred to Refocus on Coffee; Strategy Sharpens As Chairman Sends A Wake-Up Memo. Janet Adamy. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 26, 2007. pg. A.12

No Romance, Please, Just the Coffee…and Quickly. Wall Street Journal. (Eastern edition). New York, N.Y.: Mar 3, 2007. pg. A.5

Tall Order for Starbucks; Investors Seek Reassurance on Brand’s Buzz as Competition Circles. Janet Adamy. Wall Street Journal. (Eastern edition). New York, N.Y.: Mar 21, 2007. pg. C.1