Why is Starbucks so Successful?


Last week the blog made a simple claim – you don’t need to be outstanding to be successful – and I used the Howard Schultz/Starbucks story for much of the background.

So is Starbucks outstanding? If you use coffee as your yardstick, then the answer is a resounding ‘no.’ I doubt that more than five people reading this blog would name Starbucks as their favourite place to grab a coffee. Give me thirty seconds and I can list half a dozen places where the coffee/cake/ambience/service – or all four – are better.

But those half dozen places are all one-offs. They’re successful – but on a small scale. There are not 23,043 of them around the world, up from 21,366 last year and 19,767 in 2014. In 2015 842 of those Starbucks outlets were in the UK, split more or less evenly between company-operated and licenced stores. Revenue and profits continue to grow strongly.

By any standards, that’s a success story. If ever there was a company that knew where it was going and paid attention to its KPIs, it’s Starbucks. Remember, we’re not taking about apps, iPhones or technology here: we’re talking about cups of coffee.

But why is Starbucks so successful? Ask Google and the search engine returns 12.4m results, so I’m not the first person to wonder.

Howard-Shultz-Starbucks-Billionaire-CEO

…And there are plenty of articles as well, many of them extolling exemplary qualities. Start small, expand carefully. Leadership, be efficient, training… But those are simply good management in any business. Based on my own career – hundreds of meetings in hundreds of coffee shops – here are three Starbucks qualities that really stand out for me.

Remorseless attention to detail. Howard Schultz is famous for this – and if you want to read a case-study in getting the little things right, read this book by journalist Taylor Clark. Let me pick up on just one example: the tables are round. Why?

So that if you’re on your own, you don’t feel awkward. Someone has to arrive first for the meeting – and even a 1:1 needs a table for four. But sitting at a rectangular table with three empty chairs feels downright awkward. You can’t put your finger on why you didn’t have the meeting in the other coffee shop; Starbucks just felt more comfortable.

This attention to detail extends to the pictures, the length of the counter, the height of the window seats. If genius is an infinite capacity for taking pains, then there’s a lot of genius in the layout of a Starbucks.

Secondly, consider the cups: short, tall, grande, venti and trenta. Starbucks doesn’t do regular, it doesn’t do medium. Supposedly three out of the five cup sizes are in a foreign language to cater to the ‘collegiate’ needs of Starbucks’ clientele. Howard Shultz wanted to foster a feeling of belonging, of exclusivity. He wanted Starbucks to be an experience, in the same way that Disney was an experience.

Lastly, Starbucks innovates. Use of first names when you’re ordering your coffee; among the first to adopt mobile payments and Starbucks has worked with PayPal to create its own mobile payment app.

So small wonder that there are more than 23,000 outlets around the world: the coffee may not be better in Starbucks, but the relentless attention to detail, appreciation of their customers and willingness to innovate has produced one of the world’s best known and most valuable brands, with a market capitalisation of $85bn.

If it works for Starbucks, it can work for you: damn it, all they do is sell coffee and cake…

Advertisements

One comment

  1. Henry Walker · July 22, 2016

    Love your Blogs Ed and this Starbucks one is a light shone on the obvious but yet so easily missed. Great work.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s