Rafael Grillo

Starbucks Gets Re-Caffeinated - Barron's

We will have to see what the specific turnaround strategy is. However, I still believe that Starbucks responds to very fundamental pleasure needs of a new generation of consumers. Indulgence will not go away for them. More importantly, this quest for fulfillment and deeper satsifaction is global. I've stated repeatedly that SBUX real opportunity for growth is overseas. I am glad to see that addressed in Schultz turnaround strategy. I believe we will se SBUX in the upper 20's again.

Was Peter Lynch Wrong? Crocs and Other Trendy Companies

I've written a couple of articles in my site about this same topic. It is possible to identify great companies and great products that meet fundamental consumer values and should generate significant returns over the long term by observing their action in the marketplace. By the same token, and paying close attention, it is possible as well to discern which are just fads or niche products. Nothing wrong with riding Crocs all the way to $75. But that was it. There is nothing left in that stock. The most serious financial mistakes are made when people consider these declines as buyable dips. Crocs is not a $75 disguised as a $12 one.

Earnings Preview: Starbucks

It is hard to believe that competition is having only a minor impact on Starbucks situation. Consumer will not drink less coffee because of the economic situation, but they will drink less expensive one. It is typical case of demand elasticity, aggravated by the fact that the quality of the competitive product (from McDonalds to DD) has not only improved, but in some case surpassed Starbucks'. Starbucks needs more than to refocus on coffee: it needs to reinvent the experience, and that is a tall order.

Am I Too Much of a Pollyanna on Starbucks?

As much as it hurts me, I think Starbucks is in a difficult strategic position. Starbucks taught America how to drink coffee. That served them well, and being the only real choice for many years, growth just followed. The problem is that they also taught their potential competitors how to prepare coffee. This is the typical cycle of disruptive innovation. The consumer now has choices, and at a lower price: not only McDonalds, but DD and other smaller coffee houses. Starbucks coffee is not the golden standard anymore. The only real advantage they have at this point is their distribution. Hard to grow on that one alone. Their real opportunity to reactivate growth: aggressively leverage their brand internationally, where the Starbucks experience is still innovative and aspirational. Until an aggressive international expansion strategy is not presented, you are better off betting on McDonald's coffee... and salads.. and burgers...