Donald was CEO, share prices dropped 48% during a six-month period. Investors were impatientand dissatisfied.
In 2008, Howard Schultz returned as CEO. Mr. Schultz’s focus was slow expansion, close
unprofitable stores, and fast track international plans (Adamy). In 2010, Mr. Schultz urged fellowbosses to hire more people. Starbucks has plans to open hundreds of new stores in the UnitedStates and elsewhere. Mr. Shultz challenges companies to create jobs. In 2011, Starbucks plannedto create
more than 3,500 new jobs in the United States (Howard’s Way).
Worker complaints from Starbucks’ baristas in the past couple of years have resulted in
negative publicity for Starbucks. Recently, an outburst from an employee that worked at aCalifornia Starbucks went viral on Youtube. The employee in the video complained about impolitecustomers and dissatisfaction at work. The video has over 900,000 views. Other complaints thathave caused negative publicity for Starbucks are comments from part-time employees that theyhave no guaranteed number of work hours per week, and complaints that the wage is barely abovethe minimum wage (Starbucks Baristas 8).
Starbucks has a wide geographic presence that is continually strengthened by expansion.Starbucks has operations in more than fifty countries. Company-operated retail stores in the US andinternational markets accounted for 84% of total net revenues in the 2010 fiscal year. Currently,Starbucks is focused on a stronger presence in Brazil, Central America and Asia. In Brazil, Starbucksacquired a Brazilian coffee company; in Central America, Starbucks entered an agreement with
Central America’s largest multi
-brand franchise operator to open Starbucks stores throughoutCentral America; and in Asia, Starbucks has a new partnership with Tata Coffee (Datamonitor 5).
Research and development of new products allows Starbucks to strengthen its productportfolio. The R&D department of Starbucks develops new food and beverage products as well asnew equipment. In 2009, R&D created the VIA Ready Brew coffee and sales from the VIAReadyBrew coffee contributed $22 million to net revenue in fiscal year 2010 (Datamonitor 8).
Recalls on products have harmed Starbucks’ brand image. Such recalls
include products withpeanut butter, glass water bottles, and grinder blades. Most recently in January 2011, Starbucksrecalled glass water bottles due to concern that the bottle could shatter when the stopper wasinserted or removed. Similarly, grinders used by baristas in the stores were recalled since thegrinder could fail to turn off or turn on unexpectedly. The grinder recall took place in2009. Continual recalls threaten the value of the Starbucks brand and could cause a decline inproduct demand (Datamonitor 8).