Here’s what Tim Cook can learn from Starbucks and Whole Foods

“Tim Cook, chief executive of Apple, is up against his company’s own phenomenal history of success. The iPhone’s ubiquity and dominance have combined to deliver Apple a soaring share price and an astoundingly high percentage of the total mobile phone profit pool,” Michael J. Silverstein reports for Fortune. “Competitors are either losing boatloads of cash, or delivering marginal profits. Apple has a market cap of $555 billion—with roughly 90% of its value delivered in phones.”

“Cook’s tenure has seen a remarkable growth in iPhone share and global usage. Jobs would certainly have been proud of the trajectory. But Jobs’ most famous quote was: ‘Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful, that’s what matters to me,'” Silverstein reports. “The new ‘wonderful’ is what Apple needs most now.”

“Other notable chief executives have faced similarly overwhelming challenges, and have fought to stay true to core company values and deliver ongoing value. Cook, of course, when he isn’t fighting the federal government, is trying to reinvigorate Apple’s growth,” Silverstein reports. “When Howard Schultz returned to Starbucks after temporarily “retiring” in 2000 as chief executive, he shut every store down for a day. During Schultz’s retirement, there was intense pressure to deliver 20% growth in sales and profits. In 2008, when he returned, Schultz decided that the company needed to stress speed, service, and quality product.”

“In a memo to Starbucks employees, he lamented the ‘watering-down of the Starbucks experience’ and ‘commoditization of our brand.’ Insisting on a return to quality and experience control was a bold act at a time when same-store sales had slipped and consumer ranking had dropped. It was a clear statement about values and value, a push for reinvention, programmed expansion, and an emotional connection between employee and customer,” Silverstein reports. “Since Schultz’s return, Starbucks market cap has soared 600%, to $88 billion today.”

Read more in the full article here.

MacDailyNews Take: We’re not going to belabor the point and instead simply refer you to our January 5, 2015 Open letter to Tim Cook: Apple needs to do better.

We believe Apple is aware of, listening to, and already well on their way to acting on such concerns. The future of Apple is exceedingly bright. The company has grown very rapidly over a short period of time. That they have done this well during this tumultuous time is a testament to their unparalleled management. The fact is that Apple’s low point was well above the highest point that any of Apple’s so-called rivals have achieved. Things are only going to get even better from here on out!

18 Comments

  1. Wow MDN, it is a good thing that in 2015, you posted an open letter to Tim Cook to help him decide to do something. I wonder . . . given the lead time for products and changes being several years, do you honestly think that what may appear to be a response to you letter may not have already been in the works for over 2 or 3 years?

    I would suggest that you, MDN, focus on improving your own product and getting relevant ads to support your ‘business’ model.

    1. Speaking of which, the MDN App has spontaneously taking me to the app store four times in the past week. Each time for some stupid game or other. I realize that this is a known problem, but it seems to be getting much worse lately.

  2. I just don’t understand what keeps Microsoft afloat. Only an idiot would want their operating system to spy on them all day long. Only an idiot would put up with the myriad security issues inherent in Windows. Why anyone would trust Microsoft to respect the privacy of ones files in the cloud is just one of life’s mysteries.

    1. The embedded Office franchise and the legacy Windows – Corporate monopoly will keep Microsoft around …

      Microsoft won’t last as long as the dinosaurs though!

    2. http://www.zdnet.com/article/google-microsoft-apple-where-does-the-money-come-from/

      MS cashes in with:
      Azure cloud services
      enterprise software (not just Office)
      consumer cloud services
      Xbox
      Windows licensing

      Apple, on the other hand, relies on the iPhone for 68% of its revenue, and AlphaGoogle makes all its money (okay, 89.9%) from advertising.

      So from a financial risk distribution standpoint, Microsoft is actually the more stable, less risky company for the long haul. That’s why so many baby boomers are parking their money with MSFT instead of AAPL.

  3. I don’t really see the CEO’s of starbucks or Whole Foods doing anything to change their industry…so I would say NO to looking for inspiration from those guys.

  4. Cook does need to learn these lessons, but he seems like the kind of person that just delegates everything. I seriously doubt that Cook has used a Mac in years, let alone deep diving into competitive analysis once in a while. Slow/inconsistent/constrained product releases, clumsy PR and an ineffective retail chief aren’t helping either. But the big problem is that Cook doesn’t act like he is listening to the customer. Apple is losing its polish.

    Much as I hate Starbucks and I find Whole Foods overpriced, they do spend enormous energy ensuring that everyone from top to bottom is dedicated to user experience. Apple no longer has that message at the core. Listening to Cook, all you hear is that he is very excited about unit sales and there is a pipeline that he is also very excited about. BIG DEAL. Where are the new Macs? Where is the replacement for Aperture? When are you going to fix iTunes? So much to do, and Cook is just oblivious to the details.

  5. On the topic of comparing Apple to other brick-and-mortar stores, a red flag went up for me yesterday as I visited my local Apple store: gone were the display tags for the products on the tables. I was in the store for a repair, and didn’t notice the change until I started looking at AirPlay speaker options in the back corner. First reaction: WTF, where are the display tags? An employee showed me how to tap the accompanying iPod next to the product, then launch the “Prices” app. WTF again — a couple steps to find a fricking price with no other added value to the experience.

    How is this a streamlined improvement to what has traditionally been a stellar shopping experience? Apple stores tend to give me the tinglies, and as I gazed at the tables of iPhone, iPads and Macs, this lack of display tags displays feels like a negative. It doesn’t beckon me at all. As a loooong-time, big-time user and stock owner of AAPL, my first thought is: what is Angela doing for the stores that has meaningful value? This — too me — has the feeling of someone sticking their hands in a (very successful) process and making changes for the sake of changes and getting it rather wrong. It feels like a red flag. Angela brings a stellar resume, but she does not come to the show with Apple experience. And this little example feels very oddly wrong to me.

    I welcome your thoughts.

    1. Exactly!

      Apple is losing touch with what users find important. In stores, on its website, and also with its product releases. I am losing patience with Cook. Apple isn’t making my life better, Apple is offering poorer value and more constraining products than ever.

  6. You can’t compare business models of Apple and Starbucks. First of all, Starbucks makes a crappy product and Apple doesn’t. Burnt coffee, whoopee.

    1. You miss the point. Charbucks sells the illusion of luxury to people who can afford only $5 worth of superficial luxury at a time.

      Apple, on the other hand, sells the illusion of luxury at much higher price points.

      Unfortunately unlike Charbucks, Apple doesn’t seem to listen to the customer. When you get your sugar-bomb latte from Howard, you get it exactly the way you want it, in a comfy atmosphere. At the overpriced Apple store, you get whatever Apple decides to offer today — which to a lot of us Mac users is less value all the time.

  7. Don’t forget Tim Cook’s obsession with ‘Customer Sat’, which basically translates to Profit Share. All that lines up nicely with Starbucks aforementioned ‘awakening’.

    Apple knows what they’re doing.

    1. When I look at the user reviews on Apple’s online store and app stores, I see a lot of unflattering reviews. These are paying customers who have purchased Apple products and are dissatisfied. Likewise, my experience with Apple has been declining rapidly. I wouldn’t give OS X El Cap more than 3 stars out of five given all the bugs either.

      Maybe it’s just me, but Cook’s metrics are horribly off.

      1. If you think TC’s lying, then by all means. Let’s see what Customer Sat %’s they report at the next Event/Financial Report. Perhaps all the hand-wringing online is just a vocal minority?

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