Joseph Schumpeter Drinks Deep at Starbucks Coffee


You know Starbucks had become gigantic when, several years ago, The Onion ran a story with a headline like, "Starbucks to Open in Men's Bathroom of Starbucks."

The AP reports on the company's missteps over the years, neatly underscoring how difficult it is to stay not just on top, but in business altogether:

Among the bigger ventures were attempts to open separate food-and-drink outlets: a full-service, sit-down restaurant called Cafe Starbucks, and a computer-friendly bar under the name Circadia.

Starbucks also partnered with a few Web portals and pushed further into merchandise and media, including a periodical called Joe Magazine and a line of journals and desk supplies.

None of those ideas lasted. But that spasm of unsuccessful brand expansion shows that Starbucks can become overheated about the world outside of coffee….

[Former Starbucks marketer John] Moore sees parallels in some of Starbucks' latest moves beyond coffee-related commerce—namely last year's marketing of "Akeelah and the Bee," a feature family film that was heavily promoted in stores but got a chilly reception at the box office.

"There was no linkage to coffee at all, nothing to the core of what the company was about," Moore said. "You start to realize, 'Wait a minute … they just want my eyeballs. They sold my eyeballs to someone.' "

Other skeptics question whether Starbucks' other recent media ventures, particularly its new Hear Music record label, are the type of moves that could distract Starbucks from its bread and butter: selling $4 coffees.

More here.

Years back, I wrote about the brewing anti-superstore movement. Part of the article looks at how past category-killers–A&P in supermarkets comes to mind–just finally faded from view.

When Starbucks across America are turned into tanning salons (or whatever), Joseph Schumpeter, the coiner of the term "creative destruction" and the subject of an excellent new bio, will have seen it coming.