Starbucks aim to increase sales through new products
With CEO Howard Schultz stepping down this month, Kevin Johnson, former Chief Operating Officer at Starbucks will have to ensure the franchise remains profitable and innovative as Starbucks’ new CEO. The company has recently not been hitting their sales targets, reflecting current political and business uncertainties. Nonetheless, the company are launching new products and services in order to remain ahead of the game and appeal to markets in the US and worldwide.
With plans to open over 12,000 new stores and drive thrus, the company has adopted an aggressive growth plan, especially in areas such as China where significant investment has been placed, with over 2,000 new stores set to launch in the country. Starbucks are also expanding their services to include a Reserve Roasteries business, which will be launched in Shanghai this year, alongside Tokyo, New York and then Europe. With over 10 percent predicted revenue growth, the company are continually seeking to fend off competition and become one of the most renowned brands in the world. Aiming to appeal to all markets, the company will also expand its food division, including wheat-free and gluten-free products.
Kevin Johnson, CEO has said: “We are executing against an ambitious, carefully-curated, multi-year strategy to further elevate the entire Starbucks brand and customer experience around the world, and further extending Starbucks leadership around all things coffee, retail and mobile. The power of our brand, the strength and momentum in our business, and the world-class management talent we have assembled give me great confidence in our ability to capture the enormous global growth opportunities ahead.”
The recent release of Starbucks’ Unicorn Frappuccino has been met with mixed reviews. Whilst appealing to both children and adults and increasing revenue growth for the company, some have claimed the drink to not only be too sweet, but even baristas are struggling to keep up with demand before the drink is no longer available. Barista Braden Burson released a two-minute video on Twitter, which has since been deleted after it viral, pleading with consumers not to buy the beverage. He said, “I have never made so many Frappuccino’s in my entire life. My hands are completely sticky. I have unicorn crap all in my hair, on my nose. I have never been so stressed out in my entire life.”
Furthermore, the company has partnered with PepsiCo to develop bottled Frappuccino chilled coffee, in addition to bottled Cold Brew Coca and Honey and Cream, which will be available across the US, according to a press release. Not only focusing on coffee based products, Starbucks is also expanding its tree ranges in collaboration with Anheuser-Busch and subsequent of bottled Teavana Craft Iced Teas.
Starbucks has placed significant investment in mobile apps and its loyalty programme, enabling customers to place their orders and pay through this method, providing increased convenience and accessibility. It has also allowed the company to see which products are bestsellers, against ones which are not overly popular, in order to further develop successful products and services and retain a high percentage of customers.
Renowned as one of the most focused companies in terms of employee retention, Starbucks is placing significant investment in employee health and education, partnering with Arizona State University to launch the Starbucks College Achievement Plan. These graduates will help further grow the company’s sustainable efforts and support the development of personalised products and services.
The company continually seeks to build positive relationships with customers and stakeholders, including key partnerships with farmers. Starbucks has recently stated that it will be working to ensure that 100 million coffee trees will be given to farmers by 2025 as part of their ongoing support to reduce the impacts of climate change. Cliff Burrows, Group President, Global Coffee at Starbucks said: We have heard directly from farmers that healthy trees are what they need now, more than ever, so this long-term approach coupled with the right resources directly correlates to the stability of their family as well as the future of coffee.” This links with Starbucks Sustainable Coffee Challenge, which encompasses ethical sourcing, effective collaboration, and employee and economic growth.
The company also seeks to reduce its carbon footprint through utilising clean, renewable energy sources. Since 2015, the company has obtained 100 percent of its electricity through renewable sources in the US, and will soon be the owner of a new 260 acre solar farm in North Carolina. The new facility will help generate power for over 500 stores throughout the US, housing 150,000 solar panels, and will be completed next month. A partnership with Puget Sound Energy will also provide energy for 116 stores, according to QSR Magazine.
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Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.