Question

The 2008 announcement by Starbucks that it would be closing approximately 600 of its stores suggests the firm was using a ________ strategy.

A) consolidation
B) diversification
C) geographic expansion
D) vertical integration
E) product development

Answer 1

Starbucks' closure of around 600 stores in 2008 reflects a consolidation strategy to improve financial health and efficiency, not an expansion, diversification, vertical integration, or product development strategy.

Step-by-step explanation:

The 2008 announcement by Starbucks that it was closing approximately 600 of its stores suggests the firm was using a consolidation strategy. This strategy often involves reducing operations to stabilize the financial health of the firm by cutting costs and reorganizing to become more efficient. Consolidation is distinct from options like diversification, where a company would extend into new markets or products; geographic expansion, the spread into new areas; vertical integration, acquiring businesses up or down the supply chain; and product development, which would involve creating new or improved products.

Answer 2

Starbucks used a consolidation strategy by closing approximately 600 stores in 2008 to improve its financial performance.

Step-by-step explanation:

The 2008 announcement by Starbucks that it would be closing approximately 600 of its stores suggests the firm was using a consolidation strategy.

Consolidation is a business strategy where a company reduces its operations by closing down certain locations or divisions. Starbucks, in this case, was closing stores to streamline its operations and improve its financial performance. This strategy allows the company to focus on its core business and allocate resources more effectively.

This decision indicates that Starbucks was looking to consolidate its operations and optimize its profitability by reducing costs and increasing efficiency.