In 2007, Starbucks CEO Jim Donald issued a memo criticizing some of the company’s past decisions, including the installation of automatic espresso machines. He pointed out that the espresso machine decision was “probably right at the time” because it increased the speed of service and improved efficiency. However, he argued that the decision overlooked the “romance and theater” of the customer barista experience. He emphasized that the company needed to return to its core to ensure the loyalty of Starbucks customers.

REQUIRED

A. How does “romance and theater” relate to Starbucks’ vision and core competencies?

B. What are some of Starbucks’ business risks?

C. How is it possible for a decision to be “right at the time” but incorrect in terms of a company’s overall strategy?