A recent USA Today story titled “Starbucks eyes grocery stores, China, digital for growth” caught my attention as in a prior blog post titled “Has Starbucks Lost Its Name or Just Its Mind” which discussed the venerable Seattle based beverage giant dropping its name from the logo. In the post, we discussed the name would appear as gibberish to the Chinese just as their Mandarin ideograms appear to our English trained eyes, and thus would make sense to have a straight graphic design if they were to enter that market in force.
Well sure enough, during this year’s shareholders meeting attended by over 2,000 interested parties company CEO Howard Schultz told the audience that China in 2011 and forward would play a large part in the brands growth. As by 2015 Schultz pointed out the goal is to grow to a foot print of 1,500 locations in the country where currently they have less than a third of that number at only 400 stores. This folks is a company that gets it, as you will not fight the world economy as it’s here to stay and to profit one has to play the game. Just like when you were a kid, where things didn’t go your way so you packed up your toys and went home, that was a place of solitude and nothing was accomplished.
Here Starbucks is in the game, matter a fact they are on their “A” game in the perfect market for success too as the establish brand brings to the Chinese market a number of success factors including a western brand, a consumption based product as its an experience and not ownership which makes it a repeatable sale (i.e. annuity business). If this isn’t a recipe for success, not sure what is and we only need to hope the federal government gets the nerve to catch up with the times and revamp the tax codes as other nations have done to incent corporations who do business abroad to be able to repatriate earning s without undue tax burdens.
The other aspect is digital growth, hey wait a minute how does one grow a consumption based product company on line? Well with 20 million Facebook ™ fans domestically we start to see, however what also grabbed my attention was it only had 1.3 million international fans, wow does that send a message and we can quickly see why they want to head to China as the world will be their oyster with room for some amazing growth opportunities. In addition Schultz spoke about plans of expansion in the realm of digital media which to quote him “will be dramatic”.
This makes me wonder what Howards plans are, along with what he considers “dramatic” as a lot of people sell coffee and tea especially on that side of the world meaning the brand will be its key success driver. So it makes sense in concept, however just plastering your logo on a Facebook ™ page isn’t the answer as to be successful. Mr. Schultz needs to build “connection”, yes a digital connection to the brand as one where the brand brings its network to you. How does a brand do this, well not quite sure, however in the future a brand will not be based upon its “possession” as in you own a pair of Nike’s or drive a BMW. It will be in the “connections” it brings…