business news in context, analysis with attitude

Fortune has a story about how Target Corp. recently brought in Starbucks CEO Howard Schultz to "rally the Target troops" as the company tries to recapture the "cheap chic ethos" that differentiated it for so long.

Schultz was asked to reflect on how the company got its mojo back after it foundered in 2008; as the economy worsened, people resisted paying $4 for a cup of coffee, and it hit Starbucks hard.

“Our brand comes to life by uplifting our people," Schultz told the Target employees. "So when I stopped hearing my team having conversations about the people and the coffee, and only focusing on the numbers and getting bigger, faster … that’s when I realized something was wrong ... For the Starbucks team, it all comes back to one person, one cup, one community, and getting the details right. We needed to get back to basics, the values that our customers fell in love with in the first place.”

Schultz's mission was to reinforce Target's internal message - that CEO Brian Cornell is taking the company in the right direction as it tries to reduce bureaucracy, get more nimble, differentiated and customer-focused, and stop trying to compete with Walmart and others on price.
KC's View:
Schultz is one of our generation's premier entrepreneurs, and certainly one of our great salesmen. (After all, he got people to buy $4 lattes and helped democratize the notion of differentiated good taste in this category.)

But I think it is important to note that Starbucks and Target share something else in their comeback stories - Starbucks got better as the economy did, and Target is trying to get better as the current economy improves. That helps the cause of non-price-oriented differentiation a lot easier.