Starbucks Feels the Strain of World Domination

In a memo distributed to top executives, Starbucks chairman warned that rapid expansion had unfortunately contributed to the “dilution” and “commoditization of the Starbucks experience.” Howard Schultz charmingly went on to lament specific examples of the company’s “cookie cutter” problem, but then concluded the letter in a manner one would expect from a Starbucks executive: “This must be eradicated.”

Wall Street Journal:

Mr. Schultz sent the memo to top Starbucks executives on Feb. 14. in an email with the subject line “The Commoditization of the Starbucks Experience.” It first appeared on the Web site starbucksgossip.com. A Starbucks spokeswoman confirmed the memo’s authenticity.

“Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience and what some might call the commoditization of our brand,” Mr. Schultz wrote in the memo.

“Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces,” he wrote.

“While the current state of affairs for the most part is self induced, that has lead to competitors of all kinds, small and large coffee companies, fast food operators, and mom and pops, to position themselves in a way that creates awareness, trial and loyalty of people who previously have been Starbucks customers. This must be eradicated,” he wrote.

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