Is There Such A Thing as TOO Big?
I’d say yes. And, maybe the era of the mega-corporations is over. (Discuss amongst yourselves…will it even be possible for the machines another GM to rise? In today’s flattened world, is it even desirable? Does the upcoming/evolving creative class want or need a old-time corporate structure? I know what I think…)
But…let’s get back to what I intended to be a short post on over-expansion. Starbucks is currently spending millions on new advertising, and doing their best to leverage/plug into social media (They’ve got a lot of Facebook fans, but does that translate into sales? I can’t buy coffee virtually.)
I’d not-so-humbly submit that their core problem remains over-expansion. And, as part of that expansion, they had “dumbed down” their brand….trying to attract all kinds of new customers…making it “easier” for the baristas to make a cup…selling music…(they’ve since gone back to in-store bean grinding, a good thing.)
From the article: “..The full-page newspaper ads go to some length to describe how Starbucks selects only the best 3 percent of beans and roasts them until they pop twice, and gives its part-time workers health insurance.
Starbucks chose the copy-filled ads, which were popular in the 1960s and 1970s, because it wanted to put its full story out, Mr. Davenport said. ‘Even if you cruise by and don’t stop to read every word, the net impression is, ‘Wow, Starbucks has a lot to say about coffee.’ That might not be the right strategy for young people, said Richard Honack, a professor of marketing at the Kellogg School of Management at Northwestern. Unlike Starbucks’ older customers, ‘Generation Y goes to Starbucks for the Internet, the music, a place to hang out,’ he said. ‘Selling them the coffee and where the coffee comes from? I just don’t know if that’s a good idea.’”
I’m not Gen Y. I love to read. I love coffee. I skip right over those full-page ads (yawn…I already know Starbucks) and I make my own coffee.
I give Starbucks credit for trying…wonder if all those tweets that are supposedly happening will translate into dollars? Interesting to watch, in any event.
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Well, another GM has risen; it’s called “Toyota.” And many tomes have been and will be written about how and where and when and why US auto manufacturers lost their way.
I never “got” the Starbucks phenomenon, but it appears that over time it decided it wanted to be as ubiquitous as McDonald’s but pricier. Perhaps familiarity does breed contempt.
But most of my clients are struggling to get bigger. Fixed costs of space and equipment dictate that operations need to be scaled up, or additional product lines added, to increase profitability.
[...] growth works nicely, too. As Mary Schmidt was musing not so very long ago, maybe the era of the hyper-huge corporate giant is [...]