Article Review and Summary Week Two

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Baker College *

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E. G. 101

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Economics

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Feb 20, 2024

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2 Article Review and Summary Opening Statement The business world is a fast-changing environment today, with companies in different fields undergoing multiple difficulties and benefits. It becomes a vital issue for all companies, from multinational corporations to local small enterprises, regardless of size. Changes in customer preferences, technological innovations, and the overall economic environment influence this landscape. These companies survive by adapting to changes in customer taste or responding to other economic challenges, such as inflations and market fluctuations, reflecting the current economy's dynamic character. The manner in which these companies work and react provides us with interesting perspectives on the intricacies of today's global business operations. These business’s stories tell us about the continuing battle against remaining relevant while being profitable in a constantly changing world. Review of Starbucks Rewards Members An analysis of Starbucks’ FQQ 2022 report by Littman (2022) suggests an unexpected growth in their reward members even with recent menu price increments. Membership doubled to about 18%, contributing to over 50% of US company-operated revenues (Littman, 2022). This article shows that the loyalty program helped customers relate to each other and Starbucks to understand consumers’ likes. For instance, customers are always updated about new flavors. Also, customers can now buy different options for the same product, which enables them to know what they like most. Due to this 5% rise in costs over the last twelve months, Starbucks did not see much decrease in consumer spending, which points towards a solid, loyal customer base.

3 The U.S. Housing Market The second article by Robertson (2022) from Yahoo also discusses the situation in the US housing market, where Goldman Sachs experts forecast zero development of American home prices in 2023. A pandemic forced people to look for cheaper options like more suburban areas. Also, interest rates were down; hence, they could finance it. Nevertheless, as mortgage rates and general house prices increase, affordable houses reduce, slowing price improvement (Robertson, 2022). This implies that the S & P Case-Shiller home price index proves a significant price increment in line with the COVID-19 pandemic period. However, significant large falls in house prices countrywide will likely not happen, but regionally and possibly slightly lower. Small Business Owners Huddleston (2022) reveals how small business owners suffer from hikes in fuel and food prices, as explained on CNBC. According to Kabbage’s survey, 80% of small business owners believe they will survive a recession, but inflation is reducing their profit margins considerably. There was a significant improvement in revenue, but the costs of goods sold and labor went up, resulting in a profit decline (Huddleston, 2022). These business owners’ anti-inflation strategies include raising prices and concentrating on high-margin products and services. They are ready for any economic downturn. These owners are resilient and optimistic because they have passed through tough times like the Covid-19 pandemic. Wrapping up The analysis of the three articles reveals a central theme: it examines the robustness and flexibility of businesses in the context of economic difficulties. Thus, when faced with such shifting trends in markets and consumer behavior in larger corporate organizations such as Starbucks, they can maneuver their way to success. The fact that they still manage to keep their

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4 customers shows that they appreciate and listen to what customers want. Likewise, the anticipated slowdown in US house price escalation highlighted in the second article demonstrates the role that external factors such as cost of living and interest rate play in influencing the trends in the economy. Finally, though inflation eroded profits, many small business owners showed a resilience that revealed the importance of being flexible and planning strategically. Taken together, these stories highlight the significance that companies of all sizes will have to be nimble and responsive to the vagaries of the global economy as well as take advantage of the competitive landscape that is open to them.

5 References Huddleston, T., Jr. (2022, September 23). 4 out of 5 small business owners say they can weather a recession—but inflation is cutting profits: Survey. CNBC . https://www.cnbc.com/2022/09/23/small-businesses-say-inflation-is-cutting-into-profits- new-survey.html Littman, J. (2022, August 3). Despite menu price increases, Starbucks Rewards members keep coming back . Restaurant Dive. https://www.restaurantdive.com/news/starbucks-rewards- members-rise-despite-menu-price-increases/628746/ Robertson, H. R. (2022, August 30). Yahoo is part of the Yahoo family of brands . Yahoo. Retrieved December 9, 2023, from https://news.yahoo.com/us-home-prices-going-stall- 102324145.html?guccounter=1

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