Starbucks 202: How to Enter New Cities with a Bang

You’ve got an exciting and authentic product with a solid local following. You don’t have to pump it up with advertising, but when you’re ready to roll it out into a new city, you’ve got to find a way to create advanced excitement.

Here are some steps to achieve this:

· Work with public relations firms in the city to learn about the city’s pulse.

· Try to open your first store in one of the city’s hot spots.

· Build a store that celebrates and reflects the city’s personality and character. Starbucks developed twin coffee cups when it moved into the Twin Cities.

· Plan a big community event to kick off your arrival.

· Comb your staff for local ambassadors. Does anyone have family or friends in the city? Ideally you will be able to spread word of mouth through the people who already live there.

· Chart the sales of your mail-order catalogue. Are you making an abundance of mail-order deliveries to a certain nook of a certain region? If so, you may want to consider opening a store there.

“Everything matters.”

Advanced Starbucks: How to Move Into the Future

Once you’ve established your product nationally or even internationally, there’s one more place to go, the future.

Here’s how you get there and stay on top:

Don’t be Afraid of a Paradigm Shift

Once you’ve redefined the field, you may have to redefine your product. Starbucks went through several key paradigm shifts. You may not know this, but Starbucks started off selling only coffee beans; that’s right, no beverages. Schultz had to convince upper level management that they could in fact prepare the beans that they had turned into a local sensation.

Years later, Starbucks maneuvered a second extremely important paradigm shift. They moved their coffee out of their store and into different venues through the use of bottled beverages and ice cream. Once you’ve established a name, you can begin to experiment.

“Under promise and over deliver.”

Redefine Your Product

You can redefine your product without compromising its integrity. This is a tough line to walk. Starbucks refuses to take on a partner unless that partner is willing to commit to their ideals of excellence. When you make a deal with your customers, when you promise them a certain level of quality, you cannot back out of it. When United Airlines first started selling Starbucks coffee, it was not nearly as good as the Starbucks coffee that Starbucks sold. Customers noticed, and Starbucks took action. If your partner doesn’t understand your vision, they are not worth your time in the long-run.

Invest in Front of the Growth Curve

If you’re planning to continue growing at a rapid rate, you have to have executives, systems, and processes that can handle it. You are never managing solely for the present; you are managing for things that haven’t happened yet. So, when you are investing in your infrastructure, always plan to invest bigger, stronger, and smarter than your present needs require.

“Act your dreams with open eyes.”

Reward People when they Deserve It

Just because you’ve reached a national or international level doesn’t mean the people who work for you or with you have changed. They have the same needs they had when you were just a local business. When your company gets too big for you to pat people on the back and tell them they did a good job, establish systems of recognition.

Avoid Incrementalization

Building a big business requires teamwork. Building an even bigger business often requires bringing in specialists to head up departments. Sometimes, what is good for a specialist’s side of the business is not good for the business as a whole.

“If people in a company are upset about some issue but are not talking about it openly, the most productive approach for management is to bring up the subject directly.”

Lead With Your Heart

In the end, if you are trying to change something people have grown accustomed to, or if you are trying to build something that a large percentage of the population has never heard of, you have to lead with your heart. Changing minds is not an exact science.

In the 1960s, many large American coffee brands started to cut costs in order to be more competitive. The standard of canned coffee dropped drastically, and people learned to live with that mediocrity. Starbucks changed this. The three original partners knew in their hearts that they had to do it, and could do it, because they loved coffee.

“Many young companies can’t make the leap to maturity because they either don’t support the creative spirit with structure and process, or they go too far and stifle that spirit with an overdeveloped bureaucracy.”

Howard Schultz’s effort to bring Italian espresso drinks to people who usually only encountered them on the dessert menus at expensive restaurants parallels this development. Like the original three Starbucks partners, Schultz knew in his heart that he could do something. This drove him on through the highs and lows of building a company that didn’t just want to turn a profit, but wanted to change the face of culture in America.

The original Starbucks people didn’t want to hire Schultz at first. He spent a year convincing them that he would be a good fit. They didn’t want to serve coffee. They only wanted to sell beans. So Schultz broke away from the company he had begged his way into, started his own store, and eventually bought the Starbucks name. It didn’t seem like a wise business venture then. As Schultz says, "You could start up a neighborhood espresso bar and compete against us tomorrow, if you haven’t already."

If you are not inclined to start a business around a proprietary idea, you will have to reinvent an old commodity. If you love this commodity and are willing to throw your heart into it, you will stand a much better chance of attracting customers. They will buy your product because they will buy into your commitment. Investors, too, will buy into your commitment. They will invest in your passion, in the fact that the success of the business is something you take personally. Essentially, they will invest in you. Passion, commitment, heart: These are not the kinds of things you can learn in business school, and these are certainly not the kinds of things you can fake.

About the Authors

Howard Schultz has been Chairman and CEO of Starbucks since 1987. USA Today has called him the "Bill Gates of coffee." He lives in Seattle, Washington. Doris Jones Yang has worked as a reporter, writer, and bureau chief at BusinessWeek for fifteen years. She lives in Bellevue, Washington.

 

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