1 The trouble with Starbucks On a dark December morning three years ago, Howard Schultz bounded into a coffee shop in Dublin and started shaking hands with people in red T-shirts and green aprons before peppering them with questions. “Are you all new with Starbucks?” he asked the staff. “Who are the customers, and have they been to Starbucks before?” The store was the second Starbucks to open in Ireland, and Schultz, a tall, lean, energetic man who had bought the Starbucks brand more than two decades earlier, was in town to find out what the locals thought of his empire. Watching his customers order espressos, lattes and cappuccinos as the morning sun slowly lit College Green Square, Schultz explained why the ubiquitous coffee brand had become so successful. “The story is kind of boring,” he said. “We keep doing the same thing, year-in and year-out.” And that thing wasn’t really about coffee. Starbucks’ rapid expansion, which saw it open more than 10,000 stores in three dozen countries, was sustainable, Schultz argued, because of the unique experience people had at the stores. “The one thing I think is really important,” he said, “is the sense of community and human connection in every Starbucks store you go into.” In 2005, Schultz had every reason to be confident about the future of the coffee chain that he had joined back in 1982 (when it comprised just four stores in Seattle). That December, Starbucks’ stock was trading close to historic highs of about $30 a share. Its sales had risen by more than a billion dollars over the preceding year, as it opened stores in its home market twice as fast as it had in previous years. In its annual report, the company set itself a long-term target of owning 15,000 stores in the US, as well as “at least” another 15,000 internationally. Investors were told to expect earnings per share – a measure of profitability – to increase by