To the uttermost amazement, Starbucks has altered its leadership once again as it struggles with sales and market share decrease. The world’s largest coffee chain said in a statement on Tuesday that Laxman Narasimhan is leaving the company as a CEO a year after the role was assigned to him. Succeeding Mr. Schultz into the top role will be the current Chipotle CEO Brian Niccol, who will take the position of the chairman and CEO of Starbucks on September 9.
This leadership change would be the fourth Starbucks CEO in the past two years, which is evidence of Starbucks’ continuing effort to stabilize itself in the constant and growing competition. During his stewardship, Starbucks went through tough times: 3% global comps store sales decline at stores opened for more than a year, down 2% in North America, the company’s most important region. These numbers only make known the challenges that the coffee chain has to go through in the face of changes in customer and economic trends.
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Niccol’s Proven Track Record
Brian Niccol is well acquainted with the fact of trying to take a company around from a state of poor performance. Having risen through the ranks to become Chipotle’s CEO in January 2018, he has spearheaded a striking change at the Mexican cuisine restaurant selling chain. They have been able to post a near 800% increase in revenue under his leadership with Chipotle setting new benchmarks in digital ordering, rewards, and menus. Compared to some other officers, Niccol has distinguished himself as a growth machine, able to energize customer interest, making him the perfect fix-it man for Starbucks’ corporate board of directors.
Starbucks’ new lead independent director Mellody Hobson pointed to Niccol as a qualified guide for taking the company to a new level of growth. Hobson said, “Brian is a culture carrier who has vast experience and an excellent record when it comes to spearheading change and facilitating growth. “ “Our board believes that he will help transform our organization, our staff, as well as all our clients across the world,” Hobson added.
Challenges Ahead for Starbucks
BURBERRY has appointed Andrew Niccol as its new chief creative officer which is timely for the firm as it has been struggling to effectively compete with low-cost rivals and local coffee shops. One area where the company has faced particular difficulties in its transition from being a sit-down coffee house to a drive-through and mobile establishment is in the organization of its work. The problems of the company have been deepened by consumer burnout on expensive prices as well as a lack of proper innovation in foods.
Other operational problems, affecting Starbucks, include long-standing discussions with the activist investor Elliott Investment Management, which has expressed dissatisfaction with the company’s performance. The coffee chain has also been unable to effectively protect its market share in China owing to competition from local brands such as Luckin Coffee in the country which is the company‘s second-largest market.
Niccol’s Vision for Starbucks
Ladies and gentlemen, as Niccol gets ready to steer Starbucks he is seen as capable of breathing new life into the brand. R. J Hottovy, presently the head of analytical research at Placer. ai, showed that through menu novelties, Southern’s market communication, and better functioning at restaurants, Niccol can bring additional customers. Hottovy said, “The new products and advertising campaign, we believe, will be a focus in the early days of his Starbucks experience because Chipotle has in the last few years outperformed the quick-service restaurant category. ”
These challenges base themselves on market strategies, and strategic management as well as organizational behavior that was hitherto detailed knowledge and understanding of through his previous experience in the fast-food industry with Taco Bell as well as a suite of executive positions at Pizza Hut. His understanding of food service operations in particular, alongside his past successes in growing brands, will be a big asset as he tries to help Starbucks reclaim its competitive advantage.
The Road Ahead
Narasimhan has now left the company and although it seems unexpected it may not be such a shock to insiders in the industry. During his period there was a decline in sales and increasing discontent among shareholders about no product diversification and reduced market share. Speaking for many Starbucks consumers and human resources, Ex Starbucks CEO Howard Schultz openly accused Narasimhan of ruining the company citing the poor performance resulting from operations in the United States.
The upcoming period of Starbucks’ development will be labeled by its new leader Niccol as a new era in the history of the brand. The firm’s success will depend on how it will be able to manage the current threats and opportunities that are present in the environment. Starbucks is expecting this transition and so everyone is waiting to see how exactly Niccol is going to lead the coffee behemoth into a new future.
Starbucks’s latest leadership change brings out the fact that it is crucial to have effective and strategic leadership in the modern business environment. When new leader Niccol enters the company, he has to influence it with new ideas and approaches that would keep Starbucks competitive in the market.
