Tuesday, December 11, 2007

I remember an episode of "The Simpsons"...

...in which they went to the mall, and as they walked around, the shops kept changing into Starbucks. By the time they left, every shop was a Starbucks.

I know how close to the truth this is, having spent years in Seattle. There was one intersection downtown at which three of the four corners had a Starbucks. Eventually, they shut down one, leaving the two kitty-corner from one another. And this was in a city where the locals referred to the place as "Charbucks" and went only to Stewart Brothers' Coffee, nka Seattle's Best Coffee. Then Starbucks simply bought SBC.

But now Starbucks now looks like it's on decaf. It's stock is down 40% this year, largely due to this kind of oversaturization. But momentum is momentum, and the company still plans to open another 2400 stores this fiscal year, even while Chairman Howard Schultz whines about the growth watering down the Starbucks experience.

Most of us can only dream of being too big and too popular, but there really are some lessons to be learned here by us mere mortals. First, plan your growth. That doesn't mean simply saying, "Yeah, we want to grow." That means realistically assessing your market and your place in it, and assembling the internal tools to act on that information. Second, realize that the plan will have to change. The market will change. Your place in it will change. Your company resources will have to change too. Starbucks long ago passed the point where its expansion plan started eating itself, but it isn't making any changes.

Once upon a time, the Titanic discovered that "Full speed ahead" is not always the best plan, and by the time it made this discovery, it was too late to change. Starbucks may be in the same boat. Keep your eyes peeled for icebergs, and when the time comes to turn, do it.


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