Starbucks Corp. (NASDAQ: SBUX) has admittedly slothed through a tough, 12-month period. Its stock has struggled and suffered from the $39 level last November to where it sits now at $26.
But great growth stories tend to hit a difficult year or two in their development, only to emerge as even better stories. Starbucks will come through this challenging period as a better and more experienced company. Management, from chairman and founder Howard Schultz, to store-level managers are finding their footing. Yes, Starbucks has temporarily taken a back seat as McDonald's (NYSE: MCD) has captured a lot of terrific coffee headlines -- but McDonald's is not Starbucks.
One dominating trait of successful growth companies is the development of a solid and contagious culture. Starbucks has a great and enviable culture; a culture fostered by Schultz, who considers all Starbucks staff "partners" rather than employees. At last count, Starbucks has 145,000 partners operating its 12,000 units globally. One such partner made a huge impression on me yesterday. She did not know that I write for BloggingStocks, she was just being herself. It's worth repeating and if most of the partners are like her, Starbucks will once again become a great growth story. Here's the story.
Last evening I ran into my local Starbucks store in Minnetonka, Minnesota. The manager, Mario Macaruso, who is a bright and energetic partner, lives, breathes and eats Starbucks. I have known him for more than two years, and have enjoyed watching him mature in his job. Mario always has the friendliest and most knowledgeable partners helping him run this unit of Starbucks. Last night took the cake. I walked in at 8 p.m. and noticed a new partner working behind the counter. She immediately greeted me with a warm smile. "Good evening sir. How can I make your evening go better?"
Turns out the young woman, named Abbi, was a college student from St. Louis, visiting her parents for the week. She worked in a Starbuck's near her campus, and actually asked if she could work here for the week while she was in town. Wow.
I asked her whether she really liked Starbucks or if she was just feeding a customer a line. She insisted it was the former. "They treat us like partners, and the benefits are incredible," she told me. "I can go into any Starbucks in the world to work and feel welcomed. I may make Starbucks my career after I graduate."
I left with my coffee and a terrific feeling about Starbucks. The company may be going through its growth pains but with partners like Mario Macaruso and Abbi, this company is in great shape.
Howard Schultz, you should be proud...very proud.
Georges Yared is the CIO of Yared Investment Research and the author of " Baby Boomer Investing...Where do we go from here?"
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Reader Comments (Page 1 of 1)
10-17-2007 @ 5:12PM
Turley Muller said...
Here is some more recent commentary on SBUX
http://financial-alchemist.blogspot.com/2007/10/starbucks-coffee-sbux-smartmoney-face.html
10-17-2007 @ 7:28PM
george marton said...
For a company to regain greatness it has to function exceptionally well on "all cylinders" (i.e. superior products, values, service, marketing and yes, customer service too). Culture is pure BS. What your blog said is that they have great customer service. I Agree. It is the rest that has gone south. Have you tried their non-cofee items? They are inedible. Or their new pricing? A rip off. Or the lines? Slow as molasses as their product line offering becomes ever more complicated and they hire more and more staff from the bottom of the bell curve to save on cost.
10-17-2007 @ 7:32PM
george marton said...
I reconfirm my comments. Culture is twenty first century politically correct BS.
10-17-2007 @ 11:32PM
Chris Pelyk said...
I could not agree more with the fact that Starbucks is about to bounce back in a big way. I am currently living and working in China, and every Starbucks here is BUSY all the time. There growth potential here is fantastic, and I am sure that 5 years from now they will be adding significant numbers to the bottom line.
10-20-2007 @ 11:39AM
borisb said...
i am not sure this feel good story is much of a dip buying marker.
10-30-2007 @ 9:56PM
eddy said...
I like starbucks, I go and sit in starbucks because of the environment, coffee is secondary. If I want coffee, I cna make it at home from coffee that I can buy in starbucks but never will I go to MCD. MCD has new inexpensive food items wraps that were healthy and I tried at Chicago airport but MCD is not for coffee or beverages. The blog is silly, its once case. I do agree that overall sbux employees are much better in service than any other retail store
10-30-2007 @ 9:28PM
Wily said...
The middle class is shrinking rapidly. That's why McDonalds will continue to grow and Starbucks will continue to shrink.