The choice of a CEO signals potential actions to stakeholders about a firm’s potential actions. Howard Schultz served as Starbucks CEO for many years; the firm achieved multiple successes during his service. As of April 2017, Schulz became executive chairman of Starbucks’s board while Kevin Johnson, a former CEO of Juniper Networks and a 16 year veteran of Microsoft, assumed the CEO position for the coffee giant. Johnson’s background may find him concentrating on the firm’s digital operations, information technology practices and supply chain operations as a means of increasing Starbucks’s effectiveness and efficiency. Many brick and mortar stores have experienced decreasing sales in the United States as online traffic has increased. Interestingly, 2014 Starbucks sales store operations increased 5 percent in the fourth quarter; this 5 percent uptick in revenue came from increased traffic (2 percent from growth in sales and 3 percent in increased ticket size). Additional and more sophisticated technology applications may be the driver of this increase in revenues. To stimulate sales, Starbucks is ramping up its digital tools such as mobile payment platforms. Customers now can place online orders and pick them up in about 150 Starbucks outlets in the Portland, OR area. Besides leadership and a focus on technology, Starbucks receives suggestions, ideas, and experimentation from its employees. Starbucks views its employees, called baristas, as partners who blend, steam, and brew the brand’s specialty coffee in over 21,000 stores worldwide. Schultz credits the employees as a dominant force in helping it to build its revenue gains.

Questions

1. What competitive advantage or competitive advantages do you believe Starbucks seeks to establish? What are the main challenges the firm faces as it tries to maintain the advantage or advantages you identified?
2. Identify three or four capabilities you believe Starbucks possesses. Of these, are any a core competence? If so, explain your reasoning.
3. Starbucks’s mission is “To inspire and nurture the human spirit—one person, one cup and one neighborhood at a time.” What actions do you recommend the firm take to reach this mission?
4. As Starbucks’s new chief executive officer and strategic leader, what key challenges does Kevin Johnson and his firm face?