This situation report on Star bucks analyses the current situation of the company that shows diminishing profits, falling stock prices, augmenting costs and a dwindling business portfolio. The evaluation has forced the company to implement a transformation strategy that focuses on cutting down costs thus Star bucks is closing down 600 stores which will result in a lay off of 12000 employees. The situation is a result of the recessing economy and also the company’s focus on expanding rather than improving the existing portfolio.
The company needed a change of strategy and this strategy is apt to taper the bad effects of the previous policy and the economic crunch. The report’s basis is to convince the corporate office not to close the new site that is about to open in two weeks. I being the General Manager believe that a lot has already been invested in the opening of the new site that can prove to be profitable since a closing down of a site that has not even started means a waste of all that had been invested in the opening of the new store. Closing down of this new store shall result in a waste of monetary and non-monetary investments already made. The advertisements have been running since a month and the staff has already been hired and even trained thus now a closure of this site will tarnish the image of Starbucks in the eyes of the customers and will also instill further insecurity amongst existing employees of the company. The customers might get the idea that Starbucks has lost its luster and the age old saying that there is a Star bucks at ever corner shall no more be a fact. Star bucks might loose its credibility in the eyes of its customer base. This strategy has resulted in a lay off employees which will make the existing employees insecure and will also demotivate them resulting in operating inefficiency. The sources used in this report are a case study provided by the instructor and the external sources are renowned newspapers thus the facts taken from these articles have been published in these newspapers. Thus the sources used are reliable and the information is authentic and properly referenced.
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