July 22nd, 2008
Guest blog - A lesson in compassionate capitalism
I’ve mentioned Dean’s Beans a few times recently, probably because too many late nights of thesis-writing this summer have me fixated on caffeine. Regardless, Dean Cycon, the company owner and a local guy doing business a couple towns away from me here in central Massachusetts, offered to write a guest blog for the column.
Is it educational technology? Only insomuch as most of us couldn’t do what we do without a lot of caffeination. However, it is education, since business education has become largely inseparable from technology. That being said, his thoughts are quite timely as more and more businesses look to employ some degree of “compassionate capitalism,” whether that means spending extra on facilities and building green, giving back to their communities or employees, or otherwise spending money in thoughtful ways that don’t simply line the pockets of investors and executives. So here’s a little departure from ed tech and some thoughts from Dean Cycon on the impending closing of Starbucks’ retail outlets.
Starbucks Greedy Little Secret
So everybody knows that Starbucks is closing six hundred stores around the country. Most of us can figure out that the Mermaid simply got greedy, thinking that Americans would shell out mucho dolares for ordinary coffee, walk a block to the next store and do it again, all day long. That part is true, and any business with a brain would reconsider that strategy. But there is more! What folks don’t know is how Starbucks decided on what stores to close. The bottom line? The bottom line. Starbucks decided that they would close stores that have less than a twenty percent profit margin, calling them “underperforming”.
I recently gave a speech to a group of business people and mentioned this. I asked the audience how many had businesses with a greater than twenty percent profit margin? Lots of chuckles, no hands. Fifteen percent? Ditto. Ten percent? A few hands. Six percent? Many more.
The point is that Starbucks is closing down many stores that in the normal world of business are perfectly profitable and functioning. So thousands will lose their jobs because Starbucks isn’t making ENOUGH profit on these stores to satisfy the thirst of the Mermaid for money, money, money! Wouldn’t it be amazing if Starbucks offered the employees of those stores the chance to buy them as franchises and keep their jobs?
Follow Chris Dawson on Twitter! Christopher Dawson is the technology director for the Athol-Royalston School District in northern Massachusetts and a member of the Internet Press Guild. See his full profile and disclosure of his industry affiliations, but always keep in mind that the opinions expressed here are his own and not those of his daytime employer, even if he talks incessantly about his day job.
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