Analysis Of Starbucks

Starbucks is the world’s largest coffee roaster and retailer of specialty coffee in the world. We have enjoyed great dividend returns over the past 5 years, and our growth has been on the rise. We are currently saturating the US market, while the emerging markets of developing countries offer many possibilities for growth and increased revenues. In our US market we should look at offering more items on the menu that complement our long-standing tradition of pleasing our customers. Exotic Juices, and snacks served with the same service could add a nice margin to the bottom line. In addition, the ability to offer a drive through service for the consumer that loves fine coffee but does not have the time to stop and visit should be on our “trial” market plan for the next few years.

Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.

Our largest opportunity for growth lies in the emerging economies of China, India, and Thailand. A modest growth in stores in the US, and Europe (2%), while increasing efforts to expand by 10% a year in China, Thailand, and India while offering new menu items in the stores we currently have in place is projected to increase our revenues from $14.9 billion per year to $26.46 billion per year over the next 4 years. This plan will increase our indirect labor force, by adding select marketing teams, commodity managers, and a VP of construction.

Section 2: Company Description

Starbucks Corporation was an American company founded in 1971 in Seattle, WA. In the beginning, it wa...

... middle of paper ...

...lect cheeses, and fruits could draw a new customer base.

As consumer tastes and lifestyle shift towards different snacks and healthier beverages options, Starbucks should tailor its menu’s and expand to give more healthy product offerings in its mix.

Coffee beans are a significant input into Starbucks value chain and there have been wide fluctuations in the market prices of high quality coffee beans. Starbucks could mitigate this price volatility risky by implementing an purchasing hedging strategy like future contracts to lock in their estimated quantity inputs at a lower price so that the future costs can be managed to allow more profitability in a tighter market.

Starbucks environmental committee and Starbucks Foundation should ensure that the “good media” is publicized locally and nationally so its customer base can be loyal and “proud” to support them.