Starbucks' Tuesday 'Teach-in' Is Smart Move, Says Business Prof

Newswise — Starbucks' decision to close its stores Tuesday for three hours of employee training is a clever corporate move with potential impact beyond the stated purpose, says an assistant professor of management at the University of Indianapolis.

"At a time when America remains concerned about inflation and how to fill the gas tank, an expensive jolt of java is a luxury some might forego " unless the experience exceeds all competitors," says Terry Schindler, Ph.D. "Reviving its employees' passion for making coffee and espresso is an attempt to up the ante for the unique Starbucks experience."

Amid growing threats from McDonald's, Dunkin' Donuts and other competitors, the gourmet coffee chain plans to close all 7,100 company-operated U.S. locations from 5:30 to 8:30 p.m. local time on Feb. 26 to reacquaint 135,000 employees with preferred coffeemaking practices.

"Starbucks Chairman, President and CEO Howard Schultz is not just espousing company values, he is walking the talk," Schindler said. "Schultz sends a message to every Starbucks stakeholder " employees, customers, and suppliers " about the company's commitment to maintaining leadership in the specialty coffee industry."

Schindler noted that, unlike its competitors, Starbucks rarely uses paid advertising, instead building brand image through word-of-mouth and in-store experience. This training event could help restore Starbucks' position as the market leader in the minds of consumers.

The decision is not without risk, however.

"The risk comes following the scheduled 'teach-in,' when inconvenienced customers do the before-and-after comparison," Schindler says. "Regular patrons will expect an improvement, and ultimately it becomes a moment of truth for Starbucks: Will this event make enough difference to win back those customers who have begun to stray to the competition? Will the Starbucks experience improve enough to warrant the premium price? If so, what will Starbucks do to sustain the transformation?"

AVAILABLE FOR INTERVIEWDr. Schindler is available for further comment on this and other topics related to Starbucks and management strategy.

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