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    Assignment 1

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    Guiana Wacas
    The document analyzes Starbucks closing 600 stores and discusses the positive and normative analysis of this decision. It identifies microeconomic issues like decreased competition and supplier effects. It also notes macroeconomic issues such as unemployment, slowing economic growth, and recession.

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    Assignment 1

    Uploaded by

    Guiana Wacas
    11 views2 pages
    The document analyzes Starbucks closing 600 stores and discusses the positive and normative analysis of this decision. It identifies microeconomic issues like decreased competition and supplier effects. It also notes macroeconomic issues such as unemployment, slowing economic growth, and recession.

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    The document analyzes Starbucks closing 600 stores and discusses the positive and normative analysis of this decision. It identifies microeconomic issues like decreased competition and supplier effects. It also notes macroeconomic issues such as unemployment, slowing economic growth, and recession.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    11 views2 pages

    Assignment 1

    Uploaded by

    Guiana Wacas
    The document analyzes Starbucks closing 600 stores and discusses the positive and normative analysis of this decision. It identifies microeconomic issues like decreased competition and supplier effects. It also notes macroeconomic issues such as unemployment, slowing economic growth, and recession.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    DIRECTIONS: Using the case below ,

    1. Make a positive and normative analysis.

    Positive Analysis:
    To begin with, in a minority, the early clients who appreciated the club-like climate
    of unwinding over a quality mug of coffee wound up. In order to grow, Starbucks
    gradually spoke to get in and out customers for whom administration implied speed
    of request conveyance instead of acknowledgement by a barista and conversation.
    Starbucks launched new store formats such as Express to try to take a position this
    second fragment without subverting the first. However, many Starbucks regular
    customers have switched to other brands.
    In addition, as McDonald's and Dunkin Donuts expanded their coffee offerings at
    far cheaper prices, the price premium for a Starbucks coffee became less justifiable
    for grab and go consumers. These new products weakened the credibility of the
    Starbucks brand for coffee purists.
    Such strategies eliminate the objective of top administration from improving year-
    on-year same store sales. Eventually, the purpose of immersion is reached and the
    cannibalization of set up store deals undermines the strength of the organization as
    well as the spirit of the administrator. This is the truly difficult work of retailing,
    where a nearby senior supervisor needs to win brand reliability and increment the
    volume of buys at a time.

    Normative Analysis:

    Starbucks used to be a closed corporation and it was the embodiment of their


    exclusivity, but the management opened investments for it to potential investors other
    than the family-related shareholders. If Starbucks had remained private and expanded
    at a more regulated pace, none of this need would have existed. It is very demanding
    to continue to bear premium-priced brand when trading as a public corporation.

    2. Determine 3 Microeconomic issues and 3 Macroeconomic issues.

    Microeconomic Issues

     With the withdrawal of 600 Starbucks stores, lesser competitions with related
    firms will be overviewed. The competing business of Starbucks might price
    higher causing irrational behavior of these firms.

     In a microeconomic scope, suppliers of the closed stores are also affected and
    may attain profit decline and imbalance of operations (inefficient distribution
    of resources) since a major and exclusive brand has to withdraw from their
    deals

     Demands of coffee will shift to the left that will cause decrease in income of
    the company.

    Macroeconomic Issues
     According to Reuters Publication, 12,000 crews will be unemployed due to
    the closing of 600 stores. Unemployment will result to poor standard living of
    the people who are affected by it.

     The closing of 600 stores has the possibility to slow down the economic
    growth of United States. The tax imposed and collected by the government to
    the close stores and before will be compared and it will expect a decrease.

     The U.S economy also faced a recession (a period of negative economic


    growth) during 2008 due to unemployment, not just for Starbucks, but also to
    other firms. Starbucks contributing to recession will also cause inflation or
    sudden overpricing of goods unbalanced to the minimum wage that also
    arises poverty.

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