Cutting prices or putting things on sale is not sustainable business strategy. The other side of it is that you can't cut enough costs to save your way to prosperity.
Interpretation
Sustainable business practices cannot rely solely on price cuts or sales. True prosperity comes from better overall strategies, not just cost-cutting.
In this quote, Howard Schultz emphasizes that relying on pricing strategies such as cutting prices or offering discounts is not a viable long-term strategy for a successful business. Instead, businesses must focus on innovative practices and value creation, as merely reducing prices can erode profit margins without addressing fundamental operational efficiencies and customer satisfaction. The idea is that true prosperity is achieved through thoughtful investment in quality, service, and customer experience rather than through temporary financial maneuvering.
In practice
In a business seminar discussing effective strategies for growth.
The rules of engagement around building a brand have changed significantly over the past 10 to 15 years. Where companies at one time could spread their message through traditional marketing, consumers now seek an enduring emotional connection with the companies they patronize. The foundation of that connection is the most important characteristic of building a world-class brand: trust. Trust with your people and trust with your customers.
The future of America is not an entitlement. We have been given a treasure chest of gifts and opportunities, but some people are being left behind, and success is not sustainable unless it is shared.
Starbucks is not an advertiser; people think we are a great marketing company, but in fact we spend very little money on marketing and more money on training our people than advertising.
While their service is ending, our responsibility is just beginning!
In life, you can blame a lot of people and you can wallow in self-pity or you can pick yourself up and say listen, I have to be responsible for myself.
When I first discovered in the early 1980s the Italian espresso bars in my trip to Italy, the vision was to re-create that for America - a third place that had not existed before. Starbucks re-created that in America in our own image; a place to go other than home or work. We also created an industry that did not exist: specialty coffee.
Few relationships are as critical to the business enterprise as the relationship to the government. Managers have responsibility for this relationship as part of their responsibility to the enterprise itself. It is an area of social impact of the business. To a large extent the relationship to government results from what businesses do or fail to do.
A business is not defined by its name, statutes, or articles of incorporation. It is defined by the business mission. Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives.
If I only had two dollars left I would spend one dollar on PR.
One of my business partners would remind me that no fashion line lasts forever, that we would hit the down curve eventually, and that we needed to look for new brands that complement the first one.
Roughly speaking, when you are dealing with business firms operating in a competitive system, you can assume that they're going to act rationally. Why? Because someone in a firm who buys things at $10 and sells them for $8.00 isn't going to last very long in that firm.
You go to any MBA program, and you will be taught the theory of the firm, that the purpose of the firm is the maximization of return on invested capital. I always thought this was a kind of lunacy.
Subscribe for the occasional hand-picked quote. No noise.