Starbucks' Strategic Dilemma: A Deep Dive into Management's Choices
Saturday, 18 May 2024, 09:23
Starbucks' Strategic Dilemma
Management is diligently fixing problems. But is it fixing the right problems?
Why it could be the wrong move
In Q2, the North America division of Starbucks saw a 3% drop in same-store sales. Translation: Prices are up but sales are down because people aren't buying from Starbucks as frequently.
- Costly Mistake: Lower prices might stimulate sales, but risks profit margins
- CEO Disagreement: Former CEO Schultz sees US operations as the issue, not promotions
- Starbucks' app users, its most loyal customers, might face longer wait times with more promotions
What it means for investors
The more I think, Starbucks may be making a wrong move, jeopardizing operational recovery. While a strong brand, investors may need patience for stock improvement.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.