In a surprise move shaking the world business fraternity, Starbucks on Tuesday morning announced the immediate exit of its India-origin CEO, Laxman Narasimhan, and the appointment of Chipotle Mexican Grill’s incumbent Chief Executive Officer, Brian Niccol, as his successor. The development was announced by the company on Tuesday, confirming that Laxman Narasimhan has resigned as Chief Executive Officer of the company and from the board of directors with effect from May 10.
Leadership Change at Starbucks
Laxman Narasimhan, who assumed the office at Starbucks after a splendid career in international business, was the chief strategist for the new strategic developments in which the coffee giant is involved. That is, until this past week, when his tenure was unexpectedly brought to an end—albeit with the standard corporate jargon of “executive leadership changes” drowning out any proper explanation from the coffee multinational. The suddenness of this transition has left industry analysts speculating on the underlying causes, but Starbucks has remained tight-lipped as to the whys and wherefores.
Among the new successor CEOs, Brian Niccol is no stranger to managing large corporations in times of transition. He has been at the helm of the company since 2018, playing a pivotal role in reinvigorating the Chipotle brand and carrying it all through its arduous recovery phase. To many people, his hiring by Starbucks was strategic in the wake of bringing more new ways of thinking into the global operating business of this coffee giant that has traveled into new and undeveloped countries.
Narasimhan’s Work Ethic is Legendary in It’s Own Way
One of the more peculiar aspects of Narasimhan’s leadership that people would bring up after he left the company was his work ethic. By all accounts, he was not someone who worked past 6 p.m., and this is next to impossible to imagine from a corporate executive at a major firm. This approach, may be held up by others as a balanced approach to work-life philosophy, contrasts sharply with the more traditional and often punishing schedules many executives keep. Not that this factored in to him leaving, but it does help shine a light on the different leadership styles at play here in the corporate world.
In other business news, Raymond Lifestyle, one of the big fashion majors in India, has announced its ambitious growth plans. The company has said it will open over 500 stores across India in the next three years and post a 15% increase in sales and a 20% hike in EBITDA during that period. Gautam Hari Singhania, the Chairman and Managing Director of Raymond Lifestyle, said he is confident that the company will be able to achieve these numbers comfortably since it has a robust strategy in place under the expansion and customer engagement plan.
Apple’s India operations have scaled new heights, driven largely by a surge in iPhone manufacturing and strong domestic sales across its product range. Operations in India for Apple crossed more than ₹2 lakh crore ($23.5 billion) in FY24, as opposed to ₹1.15 lakh crore a year ago. The iPhone has indeed been the biggest driver of growth, whose exports alone were worth about ₹1.35 lakh ($15 billion). This milestone presages Apple’s success in India because its sales in the Indian market of Macs, iPhones, iMacs, iPads, Watches, and AirPods are showing improved performance.
In the stock market, FSN E-Commerce Ventures Ltd. is the parent company of beauty and fashion e-commerce heavyweight Nykaa. After a stellar performance in Q1, the stock has surged almost 6% and, on August 14, touched an intraday high of INR 197.35 on the Bombay Stock Exchange. Its growth trajectory, which keeps impressing investors, sees it ride on a bountiful online retail market in India.
On the somewhat negative side, Dunzo—an express commerce platform— is staring at tough funding problems, as CEO Kabeer Biswas has pleaded with employees having dues to not take the legal route. This came on the back of a proposed funding deal that was expected to clear the dues of pending liabilities from employee salaries. An inability on the part of many start-ups to get consistent funding amid market volatility has been reflective of a common problem.
Through these developments, an energetic and fast-changing business landscape across the globe and in India is evinced. The sudden change in leadership at Starbucks, aggressive expansion plans by Raymond Lifestyle, booming operations of Apple in India, market success for Nykaa, and the tough financial hurdles faced by Dunzo—each proved that modern companies have to be prepared to face complex and varying challenges.
With new leadership at Starbucks as it looks to the future, the world will be watching to see how Brian Niccol steers this company past these time-stamped changes. Whether or not his approach will align with the values and expectations that Starbucks’ global customer base holds so dear remains to be seen, but one thing is sure: business never stops moving, and adaptability is key.
Cumulative events from various sectors all point to the fact that there is a need for strategic leadership in market agility and prowess that can maneuver forward with much-needed foresight and innovation.
Ola Electric shares have surged close to 20% after brokerage major HSBC launched a bullish coverage with “buy” and a target price of ₹140 per share. All this bullish coverage comes as Ola Electric continues impressing the street with its electric vehicle lineup. Its shares are already up over 60% from its IPO price of ₹76.
HSBC is betting that Ola Electric will do well not least because the cost of making EVs will come down dramatically by FY2027-28, even as much as the cost of ICE scooters will rise due to emission-related increases. These factors favour Ola Electric with 49% market share for all electric two-wheelers sold in the June quarter and its plans to indigenize production of vital EV components, including batteries, in India.
It did flag some of the risks, though, such as the slow pace of EV adoption in India, intense competition, and the uncertainty of regulatory support and battery manufacturing. However, it said, even with all of these, the company believes this is an investment worth making with regard to Ola Electric. The strategic positioning and potential cost savings make the case for the same.
Also reporting was Ola Electric, which reportedly widened its net loss to ₹347 crore, but at the same time, announced its entry into the electric motorcycle market with a launch of the “Roadster” series. In its recent stock performance, an investor seems to have developed an overbearing confidence in the future of the company, even as it labors under a very fast changing market.
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