Pentagram rethinks Starbucks

With a $22 fall in the Starbucks share from $40 in 2006 to just $18 at the start of 2008, Seattle’s coffee monolith is rethinking its strategy. Returning to core product (coffee, that is, not easy-listening CDs); closing down 600 US stores; and introducing a new coffee machine are all part of the new direction. But the signature coffee equipment, the Clover, has had a cold reception: it has been billed as costly and over-hyped, and the investment has driven the average cost of a coffee up $1.

By Miriam Rayman