Devoted to Managers and those that seek to improve their management skills

I'm starting to wonder what it is that Starbucks (SBUX) is trying to accomplish and how it connects to their core purpose.

Just about a week ago their CEO sent them a letter calling them to go back to the core, while at the same time saying they're going forward with innovation. While all of that sounds good, it seems like they're still struggling with what they want the company to become.

They're not only distributing music in their stores now, but they're now going to create their own music label. It's somewhat of an odd tactic right after the CEO called to return to the core values and purpose of the store.

Evidently because they've sold other music in their stores, they feel they're ready to offer their own. That's where Paul McCartney comes in as rumor is that they're close to having a deal with him for his next album as their first release under their own label.

Some think it's a mistake not because of creating their own record label, but then offering the music across a variety of retail outlets, not just Starbucks shops.

Douglas A. McIntyre said, "If the wider distribution portion of the plan actually goes through, that is where Starbucks record label probably goes the wrong direction. The key to the overall success of Starbucks is traffic to the retail store level. It can sell its ground coffee in supermarkets and its bottled drinks in grocery stores, but without foot traffic, Starbucks stops growing. Resale of its products in other outlets will never be a big business."

Are these moves by Starbucks being made because the competition is eating away that strongly at their profits? I could see if they were taking steps to expand the brand maybe like Richard Branson does with Virgin, which may be what they're trying to do.

But with their aggressive statement that they want to have 40,000 Starbucks spread all over the world, it's an odd time to develop a music label that will end up distributing music across other retail outlets. If they can't maintain the strength of their brand based upon their core purpose, it's really going to be hard to expand into other areas outside of the brand.

It seems like they've done homework on what their core users like and are attempting to expand in that way, but will people go to another store to buy music because Starbucks produces it? Is it an attempt to shore up the brand which seems to be losing some of its luster and differentiation? Is it simply attempting to add the "cool" factor to the company, without regard for whether it produces revenue or not?

Those are the types of questions that come to me when I hear this type of thing. Obviously the music isn't going to do much for their bottom line. Music companies are losing money all over the place. If it's more of a marketing campaign in disguise as a new business I could understand that. It would even make some sense. If it's anything else, I don't have a lot of hopes of it doing much for the company.

The original call to get back to the core sounds better the longer I write about it. I think they should heed that from the top of the company to the bottom. It's the atmosphere and drinks that bring people in, not the opportunity to buy music. If they lose the first, the second will be meaningless.