Cutting prices or putting things on sale is not sustainable business strategy.
Interpretation
Lowering prices isn't a long-term solution for business success.
In this quote, Howard Schultz emphasizes that frequent price reductions or sales cannot serve as a sustainable strategy for a business. Instead, businesses need to focus on providing value, quality, and exceptional service to ensure long-term customer loyalty and profitability, rather than relying on temporary discounts to attract sales.
In practice
In a business seminar discussing effective strategies for success.
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.
In this business, by the time you realize you're in trouble, it's too late to save yourself. Unless you're running scared all the time, you're gone.
The sooner you cut off negotiations with someone you shouldn't be dealing with, it gives you the chance to move on to a more profitable deal.
What I do know, at least what I think I have learned from my experiences in business, is that when there is a rush for everyone to do the same thing, it becomes more difficult to do. Not easier. Harder.
The concept of disruption is about competitive response; it is not a theory of growth. It's adjacent to growth. But it's not about growth.
Why do eight out of ten new consumer products fail? Sometimes because they are too new. The first cold cereals were rejected by consumers. More often new products fail because they are not new enough.
It doesn't matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is - what matters is its relative 'share of customer value' in the final product or solution, and its cost of producing that value.
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