However, with the looming financial crisis that has hit the globe, Starbucks has been affected and has decreased operations in several countries. Chief Executive Officer of Starbucks Corporation, Howard Schultz, has focused on the safety and strengthening of the company’s business, in the long run, removing the spotlight on quarterly profits and sales [ 3 ]. The company has closed over 900 stores around the globe and has reduced its workforce by around 15,000 employees in recent years.
Schultz’s plan aims to reduce operational costs by nearly $500 million [ 2 ]. Schultz believes that Starbucks’ current strategy will pay off in the long run. I believe that Schultz has made a wise decision in reducing operations in lieu of the global crisis. Given that I was in the same position, I would have utilized the same strategy. Although Starbucks has a very solid grip on the coffee market, the safety of the organization is not assured because of the uncertainty of the market.
Setting a boundary on the organization by limiting the number of operating branches around the world has allowed Starbucks to survive the crisis relatively better than other firms. Ultimately, Starbucks is prepared to take the necessary precautions and measures to make sure that it remains one of the leading providers in the coffee industry.
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Herman, C. (2008, July 1). Coffee Crisis? Starbucks Closing 600 Stores. Retrieved April 2009, from ABC News: http://a. abcnews. com/Business/Story? id=5288740&page=1
Shepard, L. (2009, January 28). Starbucks 1Q profit down 69 pct, shuts more stores. (Associated Press) Retrieved April 2009, from Yahoo! Finance: http://finance. yahoo. com/news/Starbucks-1Q-profit-down-69-apf-14189030. html