As chains grow internationally, they tend to lose their sense of authenticity, which ultimately leads to slow growth. McDonald became a culprit of this and was hit with claims of not paying employees enough to the great false claim of the chain placing worms in burgers. These factors contributed to a negative reputation of the chain that affected the growth and even the chains business operations. Luckily, the chain managed to contain this and maintain its momentum. If Starbucks Corporation (NASDAQ:SBUX) suffers a similar fate it will most likely not make an inspiring recovery, meaning it is essential that they avoid the setbacks to continue performing generally.
Robin Lewis, industry expert notes in his blog that widespread popularity is the kiss of death for trendy brands especially those that serve the younger consumer market. Starbuck is currently rankedthird in restaurant chain. It has over 21,000 location in 65 countries . To maintain it modern authentic reputation, it will have to maintain at least some degree of hip credibility.
In recent years, Starbucks has evolved from offering premium coffee to super-sugar lattes. The company has invented the Pumpkin Spice Latte, which might be becoming fundamental to convince the customer that it is high quality enough to be worth the extra dollars. The company though is still maintaining its originality as the best coffee provide with introduction of new coffee brands. For instance, it opened a Reserve Roastery and Tasting Room during 2014. Currently, the company has over 500 reserve location globally that are serving a cup of plain black coffee for $4.
Starbucks CEO Howard Schultz noted during last earning call that they are continuing to elevate and bring premiumization to the coffee industry. Their Reserve consumers offer the finest assortment of exclusive micro-lot coffee from around the world and are currently available in thousands of Starbucks stores throughout the world. The quest of maintaining a premium reputation has affected drinks being introduced by Starbucks. Last January it added Flat White and Latte Macchiato – two espresso based beverage that provide a minimalist take on coffee than Frappuccino and Lattes. Hopefully by maintaining by keeping a premium perception of the reserve and espresso drinks, the company can influence customer perception of the enterprise as a whole.