Starbucks: Analysis

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In making the decision to close a number of outlets in the United States, there were several factors that played into Starbucks' decision. These included the performance of the stores in question, and the company's expectations for the state of the US economy going forward. The long term plan for the company also played a significant role in the downsizing that the company went through. For most of its existence, Starbucks had expanded rapidly, but in the few years preceding the downsizing, the company's performance had begun to lag. Former CEO Howard Schultz returned to the helm and began to make a series of changes. When the store closures were announced, the long-term vision for the company was cited as one of the major factors (Wilson, 2008). The rapid expansion had left the company with stores that felt like cookie-cutter chain stores rather than a part of the neighborhood (Quelch, 2008). Contributing to this issue was the fact that the company had opened stores in areas that were not supporting them. Where location and real estate management had been a cornerstone of the company's success as it grew, the rapid expansion of the early 2000s had seen a decline in the standards for locations, and many of the stores slated to be closed were in relatively undesirable locations. In addition, the US economy was entering a downturn at the time. Starbucks, with its premium positioning, was beginning to suffer slowdowns in revenue growth for the first time. The company was

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