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Starbucks – one of the world’s largest coffee giants is struggling with financial challenges that have culminated in the abrupt exit of Indian-origin CEO Laxman Narasimhan. The coffee giant, renowned globally for its brand and coffee, has seen a notable decline, prompting the company’s leadership change.

On August 13 Starbucks announced that Chipotle chief executive Brian Niccol has been appointed chairman and chief executive officer of the global coffee company. Niccol replaces Narasimhan who is stepping down as CEO and as a director effective immediately.

Niccol will start in his new role on September 9, 2024. Starbucks chief financial officer, Rachel Ruggeri, will serve as interim CEO until that time.

The former Reckitt chief Narasimhan's appointment as Starbucks CEO was celebrated and covered widely across the world, when he was announced as the next CEO in September 2022, succeeding Howard Schultz.

Narasimhan’s efforts to turnaround the decline in the same-store sales didn’t reap results, worsening the situation as the company cut guidance in April as US sales declined and China business’ growth decelerated.

Some of the reasons include, falling sales numbers, in April. Starbucks reported a decrease in same-store sales for the first time in nearly three years. This decline affected both U.S. and international markets leading the company to lower its annual sales forecast.

Facing competition in the U.S. coffee market, Starbucks initiated enhanced discounting while similar approach was taken by competitors like Dunkin’ Donuts, which intensified the market rivalry. Starbucks has increased its marketing budget to appeal to younger demographics, particularly Gen Z and millennials, spending approximately $508 million globally in 2023 to counteract this competitive pressure.

Last year, a tweet from Starbucks Workers United in support of the ongoing war in Gaza led to widespread boycotts and negatively impacted the company’s market value. The union represented 340 U.S. outlets, and the post sparked calls to boycott the coffee giant. Some estimates suggested it could have cost Starbucks around $11 billion in market value.

Coffee prices have been on the rise since 2023 and have squeezed Starbucks’ profit margins, forcing the company to pass higher costs onto consumers. Earlier in August 2024, Brazil – one of the world’s top coffee beans producers, pushed Arabica coffee prices higher due to adverse weather conditions.

Schultz’s recent comments underscored the urgency of addressing these issues particularly within U.S. operations and bringing the focus back. He stressed the solution lies in a detailed focus on improving the in-store customer experience rather than relying solely on data-driven challenges. “I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace. The stores require a maniacal focus on the customer experience, through the eyes of the merchant. The answer does not lie in data, but in the stores,” he said in May.

As Starbucks navigates these challenges, the company will need to reassess its strategies and operations to restore its branding in the market. 

<a href="https://www.storyboard18.com/brand-makers/laxman-narasimhan-steps-down-as-starbucks-ceo-brian-niccol-appointed-as-chairman-and-ceo-39443.htm">Read more: Laxman Narasimhan steps down as Starbucks global CEO</a>

Starbucks’ financial struggles led to CEO Laxman Narasimhan’s abrupt exit

Starbucks unveiled Starbucks Odyssey, a new experience powered by Web3 technology that will offer Starbucks Rewards members and Starbucks partners (employees) in the US the opportunity to earn and purchase digital collectible assets that will unlock access to new benefits and immersive coffee experiences. 

Starbucks is one of the first companies to integrate non-fungible tokens (NFTs) with a loyalty program at scale, while creating a digital community that will enable new ways for Starbucks to engage with its members and its partners. 

Starting Sept. 12, customers and partners can join the waitlist for a chance to be among the first to receive access to the Starbucks Odyssey experience, which will launch later this year.

“Starbucks has always served as the Third Place, a place between home and work where you feel the warmth of connection over coffee, community and belonging. The Starbucks Odyssey experience will extend the Third Place connection to the digital world,” said Brady Brewer, Starbucks executive vice president and chief marketing officer. 

He added, “For the first time we are connecting our Starbucks Rewards loyalty program members not just to Starbucks, but to each other.”

Brewer said “By integrating into the Starbucks Rewards ecosystem and grounding the experience in coffee, connection and community, we are entering the Web3 space differently than any other brand, while deepening our members’ connection to Starbucks. Our vision is to create a place where our digital community can come together over coffee, engage in immersive experiences, and celebrate the heritage and future of Starbucks.”

How it works 

Starbucks Odyssey will be an extension of the Starbucks Rewards program that members can access using their Starbucks Rewards login credentials. Once logged in, members can engage in Starbucks Odyssey ‘journeys,’ a series of activities, such as playing interactive games or taking on fun challenges to deepen their knowledge of coffee and Starbucks. Members will be rewarded for completing journeys with a digital collectable ‘journey stamp’ (NFT).

Members can also purchase ‘limited-edition stamps’ (NFTs) through a built-in marketplace within the Starbucks Odyssey web app experience. Limited-edition stamps will be available for all members to purchase directly with a credit card. 

No crypto wallet or cryptocurrency will be required – making the Starbucks Odyssey experience an easy way for members to access this new technology and claim an ownership stake in their loyalty to Starbucks.

Each digital collectable stamp will include a point value based on its rarity, and the stamps can be bought or sold among members within the marketplace, with ownership secured on a blockchain. 

As stamps are collected, members’ points will increase, unlocking access to unique benefits and experiences that have never been offered before. These experiences could range from a virtual espresso martini-making class, to access to unique merchandise and artist collaborations, to invitations to exclusive events at Starbucks Reserve Roasteries or even trips to Starbucks Hacienda Alsacia coffee farm in Costa Rica.

All stamps will feature iconic Starbucks artwork co-created with Starbucks partners as well as outside artists. 

“This is just the beginning; Starbucks Odyssey is one of the ways we are reinventing the Third Place to meet our customers wherever they are – in a Starbucks store, on-the-go, or online. We are creating an accessible, digital Third Place community enabled by Web3 technology where Starbucks Rewards members and our partners can connect through unique experiences and come together around the love for coffee,” said Brewer.

How Starbucks is brewing Web3 experiences for customers

WPP-owned global advertising company Ogilvy appointed Devika Bulchandani as its new global chief executive officer.

Bulchandani was born in Amritsar and became the world's most famous ad agency Ogilvy's CEO this week, following the departure of a former Deloitte hand, Andy Main, who joined Ogilvy in 2020.

In her new role, Bulchandani will be responsible for all aspects of the creative network’s business across 131 offices in 93 countries and she will also join WPP’s Executive Committee. She most recently served as global president and CEO of Ogilvy North America.

Prior to joining Ogilvy, Bulchandani spent 26 years at McCann in various leadership roles including President of McCann North America. She was the driving force behind Mastercard’s long-running “Priceless” campaign as well as “True Name,” a first-of-its-kind feature launched in 2019 that empowers transgender and non-binary people to display their chosen name on their Mastercard.

Known for ideas that capture the cultural zeitgeist, Bulchandani also helped launch “Fearless Girl,” an iconic and beloved symbol of women’s equality; the campaign became one of the most awarded campaigns in the history of the Cannes Lions International Festival of Creativity.

Indian-origin global CEOs

Bulchandani also joins the long list of Indian-origin leaders at the helm of multinational conglomerates as CEOs including Chanel’s Leena Nair, Twitter’s Parag Agarwal and Sundar Pichai at Google.

Take a look at this growing club of Indian-origin leaders running global companies and brands. (This is not a comprehensive list.)

Devika Bulchandani, Ogilvy

Laxman Narasimhan - Starbucks

Ivan Menezes - Diageo

Parag Agrawal - Twitter

Satya Nadella - Microsoft

Sundar Pichai - Alphabet

Leena Nair - Chanel

Arvind Krishna - IBM

Raghu Raghuram- VMWare

Shantanu Narayen - Adobe

Sameer Suneja - Perfetti Van Melle

Raj Subramaniam - FedEx

Sandeep Kataria - Bata

George Kurian - Netapp

Thomas Kurian - Google Cloud

Vasant Narasimhan - Novartis

Puneet Renjen - Deloitte

CS Venkatakrishnan - Barclays

Sanjay Mehrotra - Micron Technology

<img src="https://images.storyboard18.com/storyboard18/631b6eceabf8b-631b6eceabf8cWho-is-Devika-Bulchandani-Ogilvys-new-global-CEO.jpg-434x1024.jpg" alt="" width="434" height="1024" class="alignnone size-large wp-image-1948" />

55-year-old consumer-industry veteran with roots in Pune, Laxman Narasimhan will take over as CEO of Starbucks and was the chief executive of FMCG major Reckitt. He will also be a member of the Board of Directors on April 1, 2023, stepping into the big shoes of outgoing CEO Howard Schultz, who built the US coffee chain into a global empire.

What makes Indian managers shine?

Moneycontrol interacted with senior corporate leaders, leadership mentors and professors who have served in both Indian and international markets to find out more.

The report quoted Raj Narayan, who retired as EVP and CHRO from watch manufacturer Titan last year and is currently a mentor and coach with years of international experience in talent and leadership development in Europe and Asia Pacific.

Narayan spotlighted three qualities. He said, "the ability to handle ambiguity and find clarity; to think and act synchronously and to quickly settle into new and strange environments without losing our own identity -- are distinct about Indian leaders that help them succeed and do well on the international stage."

“We have enough opportunity to develop and hone all these skills in the multicultural and diverse milieu we have in India and to which many are exposed at home,” he told Moneycontrol.

Career Coach Sawan Kapoor told Moneycontrol "...we Indians are more battle ready, this positions us as some of the best CEOs on the planet, adding in a lighter vein, “The ultimate goal of any global organisation's founder must be to eventually have their company run by a CEO from India or of Indian origin."

Devika Bulchandani enters the club of Indian-origin CEOs leading global companies

STARBUCKS