The process of clearing the underbrush to promote new growth and to prevent future fires. And, according to recent headlines, that’s just what Starbucks is attempting to do. In a textbook case of too much of a good thing if there ever was one, all of their success and the unparalleled growth are hurting their business. In fact, it was getting to the point, as comedian Lewis Black pointed out, where you could walk out of a Starbucks and walk across the street to another Starbucks.
But business as usual isn’t leading to results as usual. It seems they reached their saturation (or super saturation) point with franchises and brand. And, in response to slumping sales, they decided to shake things up. They recently announced they would change their logo design and color scheme. They also announced they would close some underperforming stores and be more strategic in opening new sites over the near term.
And that brings me to my point…how do businesses know when they’ve jumped the shark and, even if it’s obvious, do business owners (especially those who built the business), lack the perspective to see when they’ve hit their inflection point? In the case of Starbucks, they had to see it coming when they looked at projections, same store sales, etc. But they continued to press on with an aggressive growth strategy.
It seems like sometimes businesses get caught up in growth just for growth’s sake instead of really focusing on smart growth and maintaining brand equity in the short and long term. And, as a result, we’re left with layoffs and empty store fronts. Analysts are predicting their new strategy will get them back on track…but we’ll have to just wait and see.
Shawn Graham is an Associate Director with the MBA Career Management Center at UNC’s Kenan-Flagler Business School and author of Courting Your Career: Match Yourself with the Perfect Job (www.courtingyourcareer.com).