{"id":383,"date":"2014-05-13T17:50:11","date_gmt":"2014-05-13T17:50:11","guid":{"rendered":"http:\/\/opentextbc.ca\/strategicmanagement\/?post_type=part&p=383"},"modified":"2019-06-27T22:40:20","modified_gmt":"2019-06-27T22:40:20","slug":"chapter-2","status":"publish","type":"part","link":"https:\/\/opentextbc.ca\/strategicmanagement\/part\/chapter-2\/","title":{"raw":"Chapter 2: Leading Strategically","rendered":"Chapter 2: Leading Strategically"},"content":{"raw":"
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Learning Objectives<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nAfter reading this chapter, you should be able to understand and answer the following questions:<\/span>\r\n
    \r\n \t
  1. What are vision, mission, and goals, and why are they important to organizations?<\/li>\r\n \t
  2. How should executives analyze the performance of their organizations?<\/li>\r\n \t
  3. In what ways can having a celebrity CEO and a strong entrepreneurial orientation help or harm an organization?<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n

    Questions Are Brewing at Starbucks<\/h1>\r\nMarch 30, 2011, marked the fortieth anniversary of Starbucks first store opening for business in Seattle, Washington. From its humble beginnings, Starbucks grew to become the largest coffeehouse company in the world while stressing the importance of both financial and social goals. As it created thousands of stores across dozens of countries, the company navigated many interesting periods. The last few years were a particularly fascinating era.\r\n\r\n \r\n\r\n[caption id=\"attachment_2397\" align=\"aligncenter\" width=\"640\"]\".\"<\/a> Figure 2.1 Starbucks\u2019s global empire includes this store in Seoul, South Korea.[\/caption]\r\n\r\nIn early 2007, Starbucks appeared to be very successful, and its stock was worth more than $35 per share. By 2008, however, the economy was slowing, competition in the coffee business was heating up, and Starbucks\u2019s performance had become disappointing. In a stunning reversal of fortune, the firm\u2019s stock was worth less than $10 per share by the end of the year. Anxious stockholders wondered whether Starbucks\u2019s decline would continue or whether the once high-flying company would return to its winning ways.\r\n\r\nRiding to the rescue was Howard Schultz, the charismatic and visionary founder of Starbucks who had stepped down as chief executive officer eight years earlier. Schultz again took the helm and worked to turn the company around by emphasizing its mission statement: \u201cto inspire and nurture the human spirit\u2014one person, one cup and one neighborhood at a time.\u201d\u00a0About a thousand underperforming stores were shut down permanently. Thousands of other stores closed for a few hours so that baristas could be retrained to make inspiring drinks. Food offerings were revamped to ensure that coffee\u2014not breakfast sandwiches\u2014were the primary aroma that tantalized customers within Starbucks\u2019s outlets.\r\n\r\nBy the time Starbucks\u2019s fortieth anniversary arrived, Schultz had led his company to regain excellence, and its stock price was back above $35 per share. In March 2011, Schultz summarized the situation by noting that \u201cover the last three years, we\u2019ve completely transformed the company, and the health of Starbucks is quite good. But I don\u2019t think this is a time to celebrate or run some victory lap. We\u2019ve got a lot of work to do.\u201d\u00a0Indeed, important questions loomed. Could performance improve further? How long would Schultz remain with the company? Could Schultz\u2019s eventual successor maintain Schultz\u2019s entrepreneurial approach as well as keep Starbucks focused on its mission?\r\n

    References<\/h1>\r\nNPR Books.\u00a0 (2011, March 28).\u00a0 Starbucks CEO: Can you \u201cget big and stay small?<\/em><\/a>\u00a0Retrieved from\u00a0http:\/\/www.npr.org\/2011\/03\/28\/134738487\/starbucks-ceo-can-you-get-big-and-stay-small.\r\n\r\nStarbucks Corporation.\u00a0 (2014). Our Starbucks Mission Statement<\/em><\/a>. Retrieved from\u00a0http:\/\/www.starbucks.com\/about-us\/company-information\/mission-statement. Accessed March 31, 2011.","rendered":"
    \n
    \n

    Learning Objectives<\/p>\n<\/header>\n

    \n

    After reading this chapter, you should be able to understand and answer the following questions:<\/span><\/p>\n

      \n
    1. What are vision, mission, and goals, and why are they important to organizations?<\/li>\n
    2. How should executives analyze the performance of their organizations?<\/li>\n
    3. In what ways can having a celebrity CEO and a strong entrepreneurial orientation help or harm an organization?<\/li>\n<\/ol>\n<\/div>\n<\/div>\n

      Questions Are Brewing at Starbucks<\/h1>\n

      March 30, 2011, marked the fortieth anniversary of Starbucks first store opening for business in Seattle, Washington. From its humble beginnings, Starbucks grew to become the largest coffeehouse company in the world while stressing the importance of both financial and social goals. As it created thousands of stores across dozens of countries, the company navigated many interesting periods. The last few years were a particularly fascinating era.<\/p>\n

       <\/p>\n

      \".\"<\/a>
      Figure 2.1 Starbucks\u2019s global empire includes this store in Seoul, South Korea.<\/figcaption><\/figure>\n

      In early 2007, Starbucks appeared to be very successful, and its stock was worth more than $35 per share. By 2008, however, the economy was slowing, competition in the coffee business was heating up, and Starbucks\u2019s performance had become disappointing. In a stunning reversal of fortune, the firm\u2019s stock was worth less than $10 per share by the end of the year. Anxious stockholders wondered whether Starbucks\u2019s decline would continue or whether the once high-flying company would return to its winning ways.<\/p>\n

      Riding to the rescue was Howard Schultz, the charismatic and visionary founder of Starbucks who had stepped down as chief executive officer eight years earlier. Schultz again took the helm and worked to turn the company around by emphasizing its mission statement: \u201cto inspire and nurture the human spirit\u2014one person, one cup and one neighborhood at a time.\u201d\u00a0About a thousand underperforming stores were shut down permanently. Thousands of other stores closed for a few hours so that baristas could be retrained to make inspiring drinks. Food offerings were revamped to ensure that coffee\u2014not breakfast sandwiches\u2014were the primary aroma that tantalized customers within Starbucks\u2019s outlets.<\/p>\n

      By the time Starbucks\u2019s fortieth anniversary arrived, Schultz had led his company to regain excellence, and its stock price was back above $35 per share. In March 2011, Schultz summarized the situation by noting that \u201cover the last three years, we\u2019ve completely transformed the company, and the health of Starbucks is quite good. But I don\u2019t think this is a time to celebrate or run some victory lap. We\u2019ve got a lot of work to do.\u201d\u00a0Indeed, important questions loomed. Could performance improve further? How long would Schultz remain with the company? Could Schultz\u2019s eventual successor maintain Schultz\u2019s entrepreneurial approach as well as keep Starbucks focused on its mission?<\/p>\n

      References<\/h1>\n

      NPR Books.\u00a0 (2011, March 28).\u00a0 Starbucks CEO: Can you \u201cget big and stay small?<\/em><\/a>\u00a0Retrieved from\u00a0http:\/\/www.npr.org\/2011\/03\/28\/134738487\/starbucks-ceo-can-you-get-big-and-stay-small.<\/p>\n

      Starbucks Corporation.\u00a0 (2014). Our Starbucks Mission Statement<\/em><\/a>. Retrieved from\u00a0http:\/\/www.starbucks.com\/about-us\/company-information\/mission-statement. Accessed March 31, 2011.<\/p>\n

      Media Attributions<\/h2>