Although the situation is not quite good but this store that the office wants to be closed has not even started operating and it can prove to be a profitable business unit. Since a lot has been invested and we are just two weeks away from the grand opening with a soft opening already done. The closing down of this store before it even starts will simply add up the already increasing costs since the company has invested two million dollars for this site and if it closes down without churning any operating profits this huge investment will go in vain.
The staff has been trained and hired which will be a wastage cost again and advertising has been purchased and is running since a month. The hype has been created and it’s too late to close down since this will further tarnish the image of the company and even negatively affect stock prices. This site can prove to be profitable since the soft opening has given reasons to have optimistic expectations from the site. The close down of this site will mean a waste of all the investment and also a bad image amongst customers especially those waiting for the store to open thus I shall advise the office to not to close down this store.
What are we unsure of specifically?
We are quite unsure of the effect of this strategy on the existing employees since closing down means 12000 employees being laid off and the existing employees might get insecure and be demotivated resulting in inefficient work. 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.
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