Home > Leadership > Another Business Tsunami for Starbucks?

Another Business Tsunami for Starbucks?

Instead of getting your daily buzz from a tall double-shot latte… how about a nice glass of chardonnay?

Excuse me? Yes, that could be the case, as about half of Starbucks’ U.S. stores are making plans to retrofit their operations and sell patrons beer and wine, in addition to the usual coffee-based fare.

In fact, some stores have already begun testing out the market. According to the Orange County Register, a Starbucks in Seattle is offering eight wine selections and three bottled beer choices for customers after 4 p.m. While the selection and timing may be receiving lackluster reviews, it is quite a change for the corporation that largely created an entirely new coffee industry in the United States.

What’s going on? Executives of the coffee corporation are hoping this move can bring an entirely new type of business to the chain. In other words, by expanding their business definition to allow for a new type of product, they hope to stimulate growth, even in this challenging economy.

Business definition expansion is something that Starbucks has done before with mixed results. So what makes Starbucks’ leaders believe this is a good move? Starbucks is the world’s largest café chain and is expected to double its profits for the fourth quarter of this year. However, Starbucks receives an estimated 70 percent of its business BEFORE 2 p.m., according to a report in TIME Magazine. So, the idea is that this alcohol-infused change could bring an entirely new customer through its doors.

Could such a simple change create a disruptive business tsunami? While the idea of a coffee bar that serves alcohol is really a model of most European bars, it is an innovative idea for the United States. There are wine bars. There are coffee shops. Starbucks is bringing them together and hoping to reap big rewards.

And it may be the perfect time. Times of economic downturns are notorious for boosting alcohol sales. So why not cash in on this social trend? Really isn’t Starbucks just combining two simple and successful concepts… going from one buzz to the next?

Sometimes, it’s easy to forget that business tsunamis aren’t just something to be survived. Even though many businesses are still operating in a defensive mode in order to deal with the possibility of a double-dip recession, it can be the right time to stimulate growth through innovation. And keep in mind that innovation doesn’t have to be complex. Should you consider expanding your business definition? For more information, visit our management resources website (nhbventures.com) and check out this month’s “In the Spotlight” topic.

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Categories: Leadership
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