coffee business strategies

A new article appears about Starbucks’ recovery plan in the New York Times yesterday. The latest step to recovery is the return of director of global development Arthur Rubinfeld.

Original Team Tries to Revive Starbucks

That may be all well and good, but quite frankly, each statement and subsequent conflicting action they take has me increasingly confused. The near bi-polar course to brand reinvention that Starbucks has followed over the last several months has me (and most of Wall St. for that matter) guessing about the company’s direction and next steps.

I can’t explain it: my only explanation is that great forces of good and evil are battling somewhere behind the big green door and that the company and its shareholders are along for the ride. A recent daydream illustrates this clash in the style of scenes from an Indiana Jones film:

“We’re getting back to basics!” Grunts Schultz as he grabs the wheel of a 1930′s era military transport, and these hot breakfasts belong in a museum! he declares with congratulatory smugness, as he slides into the driver’s seat seemingly unopposed and straightens his fedora.

Not so fast, Herr Schultz, says the Nazi on the roof canopy (where did he come from?) you’re keeping and expanding the hot breakfast!

But coffee is our focus! This lighter roast proves that we’re not trying to hide our flavor, it goes back to what this company was founded on! I used the true headpiece to find our map.

But Mr. Schultz, you’ve already been helping us to gain control, have you met our newest spy, Ms. Viviano.

Viviano, how could you?

I digress.

The article does talk about some of the company’s problems:

…the company is increasingly seen as a fading symbol of an overexuberant age. Wall Street analysts and investors continue to disparage Starbucks, citing self-inflicted wounds like overexpansion and mediocre food.

The company’s fortunes seem to be waning by the day. It is being squeezed by rivals like McDonald’s and Dunkin’ Donuts, which have started offering lower-price espresso drinks, and by a faltering economy that is forcing consumers to reconsider their $3.65-a-day caramel macchiato kick.

…the second half of which implies that Starbucks sees price competition as driving declining sales. I still feel that it’s a degradation of perceived value that is causing the departure of loyal customers, but perhaps that is just a different way of making the same argument. Though, my way of looking at the situation more heavily faults Starbucks for customer loss as the result of diluting the brand experience, not the victim of McDonald’s coffee customer poaching.

Then comes the characteristic “huh?” moment that has become a feature of the company’s approach of late.

The setup:

Mr. Schultz met Mr. Rubinfeld 30 years ago when they were both bachelors and neighbors in the same East Village apartment building. Today, the two remain so friendly that they close personal e-mail messages to each other with the word “love.”

Last week he unveiled a new design to the company’s regional managers. Elements of it, like energy-efficient lighting, new furniture using reclaimed materials and modular merchandising racks to display the growing array of Starbucks products, will begin appearing in stores across the country later this year. So will new paintings that evoke the company’s coffee heritage — as opposed to what Mr. Rubinfeld calls the generic “Pier 1 art” dotting some store walls now.

The big plan is to move back in and pick new curtains?

Say it with me now, “huh?” Is the Pier 1 approach to redecorating really the company’s best hope to bolster sagging sales and recover plummeting brand loyalty? What happened to “getting back to basics?” The focus on coffee, for example.

As usual, I’m confused and again looking for a new visual device to help me envision what could be happening here. Based on what we’ve read today, next time it will more likely be scenes from a home redecorating show on the Bravo Network than a Hollywood action picture.