WEBVTT

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- As Starbucks navigates
through turbulent times,

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former Amazon executive John
Rossman is sounding the alarm

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on the coffee giant's
recent strategic missteps.

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Rossman now a managing partner
at business consulting firm.

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Rossman Partners told
Quartz in his statement,

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former Starbucks, CEO Laxman,
Naim diluted Starbucks's brand

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by joining the value meal wars, instead

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of leaning into its premium attributes

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to create a greater sense of exclusivity.

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Rossman who played a pivotal
role in leading the launch

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of Amazon's marketplace argues it

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by engaging in the value
wars Starbucks succumbed

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to the innovator's dilemma

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by which past successes hinder
a company's ability to adapt

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to evolving market conditions.

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Starbucks has a long road ahead

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before it can fully capitalize
on its 170,000 beverage

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customization options, which
the company claims are designed

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to suit a customer's lifestyle.

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According to Rossman,

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the chain success depends not
just on the variety of drinks,

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but on creating a meaningful
customer experience,

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including addressing the
high price of its coffee.

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With Starbucks's, CEO out

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and Chipotle's, CEO in
Brian, Nicole is likely

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to use his own playbook from Chipotle

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to focus on a younger digital audience.

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That means improving
the chain's glitchy app,

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reducing drive-through times

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and streamlining in-store pickup

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and operations, as well
as new employee training.

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Rossman said Starbucks
should ask itself what sucks

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and added that as it stands,

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the answers the whole in-store experience.

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He said that aside from
inflationary pressures in global

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market conditions, the
lack of available seating,

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a noisy environment, poor food quality

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and taste, the cleanliness

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of the bathrooms are likely
what's keeping customers away.

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Rosman argues that Starbucks
should take a look at

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what smaller coffee chains are doing

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to create a more inviting environment.

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Some are limiting wifi access

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to prevent stores from
becoming full day office spaces

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and creating the true third place concept.

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Starbucks, once boasted
had been its guiding light,

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those innovations are siphoning
retail traffic away from the

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coffee giant he said,

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but they can teach Starbucks
a valuable lesson on

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what it needs to do to reclaim
its position in the market.

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I'm Francisco Velasquez
reporting for Quartz.

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Thanks for watching, and
stick with qz.com for more.