Today on CNN Money Blog: How Starbucks ruined its image - Sep. 16, 2009
Remarkably, the most successful products and services tend to be either high in fidelity or high in convenience -- one or the other, but not both. In fact, products attempting to be both typically end up with a confused brand, like if McDonald's (MCD, Fortune 500) tried to do gourmet meals.
This impossible place of both fidelity and convenience is something I call the fidelity mirage. And Starbucks chased it big-time.
After a decade of stupendous success, Starbucks ran into trouble in 2007. Fewer people were coming into its stores. Profits sank. The stock dropped by nearly half through the year. In early 2008, Howard Schultz, who'd built the coffee chain into a global phenomenon, took back the CEO job he'd relinquished eight years before. Almost everything he said about what went wrong points to one simple explanation: Starbucks chased the fidelity mirage.
(yeah i wasn't so sure about that freeze-dried instant starbucks coffee idea, not sure they're going down yet though either ; )
CLICK ON THE LINK ABOVE FOR THE FULL ARTICLE
Comments [0]