{"id":125009,"date":"2024-08-12T08:35:56","date_gmt":"2024-08-12T12:35:56","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=125009"},"modified":"2024-08-14T09:16:18","modified_gmt":"2024-08-14T13:16:18","slug":"starbucks-2010","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/starbucks-2010\/","title":{"rendered":"Starbucks in 2010: Howard Schultz’s Plan for a Better Future"},"content":{"rendered":"\n

What was Starbucks’s plan for success<\/a> in 2010? How did Starbucks reward its employees in the same year?<\/p>\n\n\n\n

In 2010, Starbucks lifted itself out of an economic rut thanks to former CEO Howard Schultz. Schultz\u2019s not only stemmed Starbucks\u2019 financial downturn but also bolstered its reputation as a socially responsible corporation.<\/p>\n\n\n\n

Here’s how Schultz planned to keep Starbucks in a positive state after 2010.<\/p>\n\n\n\n\n\n\n\n

The Outcome of Schultz\u2019s Leadership<\/strong><\/h2>\n\n\n\n

By realigning Starbucks with its founding values and adapting to contemporary challenges, Schultz ensured that the company was positioned for sustainable success. In quarters 3 and 4 of 2009, Starbucks boasted improved ratings, increased sales, and higher stock values.\u00a0In 2010, Starbucks’s economics only grew more.<\/p>\n\n\n\n

(Shortform note: Starbucks\u2019 financial standing has improved steadily since 2009<\/a>, except for a brief drop in profits over 2020, which the Covid-19 pandemic can explain. During the pandemic, which caused a recession that was worse than the Great Recession<\/a> of 2007-2008, Starbucks turned to many of the same recovery strategies Schultz employed to overcome the Great Recession, such as increased innovation and improved customer service<\/a>. This led to a speedy turnaround and record-breaking profits the following year.)<\/p>\n\n\n\n

As a result of these positive trends, Schultz made two announcements in 2010: First, he\u2019d raise employees\u2019 pay and restore benefits that had been cut to save costs. Schultz explains that Starbucks thrives partially because it outperforms its competitors with regard to employee satisfaction, so it was strategic to reward its employees.\u00a0<\/p>\n\n\n\n

(Shortform note: Experts note that while Starbucks employees received enhanced benefits across the board and some merit-based wage increases, most employees still made close to minimum wage and lived at or near the poverty line<\/a>. Meanwhile, Schultz nearly doubled his income in 2010<\/a>, earning a total compensation package of $22 million.)<\/p>\n\n\n\n

Second, he\u2019d refocus from financial recovery to purposeful international expansion with a focus on China because its market was friendliest to Starbucks due to cultural and economic factors, including a growing need for third spaces. In pursuing global expansion, he\u2019d carry forth the lessons he learned during the recession, including the importance of innovation<\/a> and cost efficiency, to ensure future success.<\/p>\n\n\n\n

(Shortform note: Despite doubts owing to China\u2019s centuries-long cultural affinity for tea, Schultz\u2019s plan to expand into China was successful<\/a>. Experts say Starbucks penetrated the Chinese market by marketing the Western coffee experience as a status symbol<\/a> and designing its presence with traditional Chinese values like community in mind<\/a>. China also typically embraces a culture of overwork<\/a>, which may have helped fuel demand for Starbucks\u2019 caffeinated drinks<\/a>.)<\/p>\n\n\n\n

A Rocky Ending to Schultz\u2019s Starbucks Career<\/strong>

In 2016, Schultz gave up his position as CEO<\/a> to become chairman of the board again because he wanted to explore the potential to upscale Starbucks for a more elite coffeehouse experience. But in 2022, Schultz returned for a third <\/em>stint in the CEO\u2019s office<\/a>\u2014this time, he was only stepping up temporarily to fill the space left behind when CEO Kevin Johnson retired. According to experts, Schultz has always been deeply emotionally invested in Starbucks\u2019 performance and reputation, even when he wasn\u2019t in a formal position of authority, and Johnson was sometimes frustrated by Schultz\u2019s close involvement.\u00a0

When Schultz reprised his role as CEO, he made radical changes to Starbucks\u2019 executive staff and internal policies<\/a>, just as he\u2019d done in 2008. Schultz also faced a new challenge\u2014the unionization of Starbucks employees across the US\u2014which he staunchly opposed and was found to illegally interfere with<\/a>. This controversy influenced his 2023 decision to step down from the CEO position earlier than expected<\/a> and, later that year, to resign from Starbucks\u2019 board<\/a>, vowing never to return. As of 2024, the company is still beleaguered by boycotts over its anti-union activities<\/a>, which include a lawsuit against the union over pro-Palestine statements<\/a> it made.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

What was Starbucks’s plan for success in 2010? How did Starbucks reward its employees in the same year? In 2010, Starbucks lifted itself out of an economic rut thanks to former CEO Howard Schultz. Schultz\u2019s not only stemmed Starbucks\u2019 financial downturn but also bolstered its reputation as a socially responsible corporation. Here’s how Schultz planned to keep Starbucks in a positive state after 2010.<\/p>\n","protected":false},"author":14,"featured_media":128486,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,81,14],"tags":[1510],"class_list":["post-125009","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-economics","category-management","tag-onward","","tg-column-two"],"yoast_head":"\nStarbucks in 2010: Howard Schultz's Plan for a Better Future - Shortform Books<\/title>\n<meta name=\"description\" content=\"In 2010, Starbucks was in a great spot. It only made sense that people were rewarded and the company grew. 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