business news in context, analysis with attitude

There have been a lot of stories and analysis about the announcement last week by Starbucks CEO Howard Schultz that he will step down from the job next year and be succeeded by the company's COO/president, Kevin Johnson.

(Me, I made the point that he's done this before and came back when the company ran into recession headwinds. Schultz has a bit of a messiah complex, I think. Though, to be fair, he has some justification...)

The first story comes from Fast Company, which notes that Johnson has big shoes to fill - Schultz has not just been a successful CEO, but an iconic one. Starbucks is nothing if not a reflection of his own ambitions and taste. And so, the magazine suggests, there are a number of things that the company needs to do in order to make the transition work.

You can read about them here.

At the same time, The New Yorker has a somewhat more jaundiced view of the company. Noting that it is a successful, progressive company, the magazine also argues that Schultz is disingenuous when he spins the narrative about how, when he returned at CEO in 2008, he had to close hundreds of stores "because too many stores were just not good enough."

But the truth is that Schultz has fueled Starbucks' financial growth with physical expansion: "Schultz has spent most of his second stint at Starbucks aggressively expanding. In 2008, there were 16,680 Starbucks stores around the world. In 2009, the year of the high-profile closures, there were 16,635. And by 2010 the number had risen, again, to 16,858. Currently, the number of stores stands at more than twenty-four thousand. It’s true that Starbucks closed hundreds of low-performing stores during the recession, but it opened far more during that period, in places that didn’t already have too many Starbucks outlets and where costs could be kept down, and doubled down on that approach when the recession ended."

And The New Yorker also takes another shot at the company: "There are plenty of things that are distinctive about Starbucks. But the coffee isn’t one of them."

You can read this piece here.
KC's View: