ASSIGNMENT NO 1

NAME: SOHAIL SATTAR

REG ID: 13994
COURSE: HRM

ANSWER:

Starbucks' initial goal was to offer high-quality beans to

customers who had previously preferred instant or canned
coffee.Howard Schultz advised Starbucks to begin selling
beverages when it hired him as its first Director of
Marketing and Sales.As a result, Starbucks sold its first
latte in 1984, a huge success in a number of ways, based
on an Italian idea in 1983 to turn Coffee Bean stores into
cafes.In 1988, he purchased Starbucks for 3.8 million
dollars and began an aggressive expansion strategy.By the
time Starbucks went public in 1992, it had established
over 1,000 locations, including its first global café in
Japan and Singapore, and had 2000 locations by 1999 as a
result of this rapid growth strategy.In terms of global
expansion, it accelerated its growth quickly.When
Howard Schultz, the company's original CEO, became
Executive Chairman in 2000, the company had 3500
locations in more than 12 countries. From that point on,
the number of locations increased by more than four
times, from the initial 3500 to the final 15,000, resulting
in Starbucks opening an average of 2500 locations per
year in 2007.From 2 billion dollars to 9.4 billion, sales
rose.Similar to this example, other businesses can
accelerate the growth process by expanding
internationally and increasing sales.
However, shortly thereafter, Starbucks' rapid expansion
abruptly halted, resulting in a 50% decline in stock
prices.This was as a result of low-income consumers
cutting back on spending on costly coffees.Howard
Schultz needed to stop development for some time and
spotlight on client experience.He closed down cafes and
fired baristas.He gave an order to close several US
locations for an afternoon by teaching baristas how to
make their signature espresso in a way that made the store
look more like an experience than a place to get a quick
cup of coffee. He also encouraged in-house grinding,
stopped selling sandwiches, and removed automatic
machines.