Starbucks
“… if you don’t measure something, you can’t manage it. And if we’re failing to measure how well we’re doing with our most important assets we’re probably not managing them very well,” (Kaplan, 2011, 1:48).
Financial
“For most organizations, particularly for-profit firms, the end game is a change in financial performance… Most company strategies aim for long-term, sustainable financial growth,” (Balestrero & Udo, 2014, p. 251). Being a publically traded company, Starbucks legally must adhere to strict financial reporting regulations. Nevertheless, by tying into their SEE model of organizational sustainability, Starbucks can further sway investors to participate in supporting their business (in big and small ways) in order to continue thriving. Marshal Goldsmith is credited with the phrase: “What got you here, won’t get you there.” This means, in order for Starbucks to truly remain sustainable, hard-nosed economics, measuring their full-range impact will be necessary via triple bottom line definitions.
Stakeholder
“This perspective reveals conditions that the stakeholder considers valuable or beneficial… the customer, a regulatory body, or the board of directors of the company,” (Balestrero & Udo, 2014, p. 251). Measuring success for stakeholders, while dynamic, does tend to
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250). Measure, measure, measure! From tracking per-square-foot operating costs of each location, to total waste diverted from landfills, percentage of minority and women-owned local suppliers, and safety tracking (near misses and recordable incidents), Starbucks must first begin to establish metrics for their present state via a centralized database. Referencing the SEEE model, these measurements can be used to identify weaknesses (either by benchmark data or in comparison to corporate values) and set new stretch
The main stakeholders of Starbucks include the employees, customers, suppliers, investors, environment and the government (Thompson, 2015). Starbucks gives priority to their staff and ensures that they are happy with the provision of better working conditions, job security, and higher wages. Thus, the company builds the community, facilitating the growth of the employees. The company listens to their customers to improve the quality of service and products. For instance, Starbucks creates a warm and friendly relation with customers to satisfy their social responsibility with this stakeholder. By ensuring their suppliers are properly paid through their Coffee and Farmer Equity (CAFÉ) program, Starbucks fulfills their commitment to the suppliers through awareness. The company creates eco-conscious stores (Starbucks Corporation, 2016) and ensures to follow environmentally sound business practices using their foresight. Starbucks supports the emergency relief services. In 2005, they helped rebuild the Hurricane Katrina struck areas (Adams, 2007). Through their high financial performance in the industry, the company meets the interests of the investors proving the ability to conceptualize. Being an international company, Starbucks remains respectful of the people’s perspectives from the respective governments. Thus, they satisfy their commitment and
In regards to the corporation’s balance sheet, it is necessary to place an importance on liquidity ratios to demonstrate the company’s ability to pay its short term obligations such as accounts payable and notes that have a duration of less than one year. These commonly used liquidity ratios include the current ratio, quick ratio, and cash ratio. All three ratios are used to measure the liquidity of a company or business. The current ratio is used to indicate a business’s ability to meet maturing obligations. The quick ratio is used to indicate the company’s ability to pay off debt. Finally the cash ratio is used to measure the amount of capital as well short term counterparts a business has over its current liabilities.
The company started its activity in 1971 as small coffee shop located in Seattle specialized in selling whole arabica coffee beans. After being taken over by Howard Schultz in 1982, following a rapid and impressive growth, by mid 2002 the company was the dominant specialty-coffee brand in North America, running about 4,500 stores, 400 international stores and 930 licenses.
The structure of Starbucks business communication is exceptional. Rather you are in their store buying a Caramel Frappuccino®, visiting their website or watching one of their advertisements on television; as the consumer, the message is loud and clear. Pick up any newspaper and you are likely to find an article about the coffee giant. Starbucks pledges a commitment to their over 172,000 partners (employees) and the community. “We realize our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements in the Starbucks Experience” (Starbucks, 2008).
This strategic capitalises on weaknesses since will decrease the cost of coffee beans/beverages but also Starbucks operating cost which they regularly ship across the world to various stores. Starbucks can capitalise on this weakness to improve their brand options. It adds value in the inbound logistics activities, operations and procurements. Starbucks should consider this option since it will decrease their operating cost and therefore will reduce the prices on their menu. The attractiveness is the exact same as mentioned in option 1.
The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Leadership sets up the mission “to establish Starbucks as the most recognized and respected brand in the world.” In doing so, they have created a set of industry-leading, comprehensive coffee-buying guidelines addressing coffee quality, financial transparency, social and environmental responsibility. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Corporation, 2007).
According to IBIS World Report the major players in the US coffee and snacks retail market are Starbucks and Dunkin’ Brands at 36.7% and 24.6% market share respectively with other competitors occupying the remaining market share of 38.7%. The industry is at the mature stage of its life cycle, has low barriers to entry and intense competition and rivalry between the players. The regulation and technological change within the industry is medium (IBIS world report)
Starbucks not only shapes a defined importance on its product, the coffee, but also the relationships on its partners, its customers and its shareholders to create diversity, “to create a place where each of us can be ourselves” (Starbucks Coffee), to treat all related partners with dignity and respect at the greatest corporate level. In this sense, Starbucks involves its customers, its neighbors and is shareholders to participate in the community to “be a force for positive action—bringing together [its] partners, customers, and the community to contribute every day (Starbucks Coffee).
Expanding sales to foreign countries can offer a Multinational Company (MNC) higher profit margins, unique products, and technological advantages. One of the major issues that an MNC will face is analyzing foreign financial statements, due to the diversity of accounting guidelines across the world. It’s imperative that companies that decide to go international learn and understand the tax laws and guidelines of other countries, in order to minimize the accounting issues involved in business activities. One of the top coffee producing companies in the world, Starbucks Corp has grown to be a powerful MNC. Their investment in foreign operations and foreign trade requires them to understand international accounting concepts and international financial reporting standards (IFRS). In this report, GAAP concepts used by Starbuck’s will be compared to IFRS.
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
Overall, how satisfied are you , with [PRODUCT/SERVICE]? Please answer using the rating scale where (5) means "extremely satisfied" and (1) means "very unsatisfied."
Starbucks has many business-level strategies, such as cost leadership strategy. Starbucks focused on increasing its profits and compete with other competitors (Starbucks,n.d). According to Starbucks (n.d), “a cost leadership business strategy focuses on gaining advantage by reducing its economic costs below all of its competitors. Although Starbucks targets product differentiation as their main business strategy, they have also implemented cost savings strategies in an effort to maximize profitability. An example of Starbucks cost saving strategy can be identified between 2007 and 2008 when their operational expenses increased by more than $125 million while sales for the same time period were beginning to dip. As outsourcing for distribution contributed to 70% of Starbucks operational expenses, they began targeting these outsourcing agreements for renegotiations in an effort to bring down costs.” Starbucks intended to reduce their
In 2014 comedian, Nathan Fielder opened a coffee shop in Los Angeles that he called Dumb Starbucks. Both Starbucks and Dumb Starbucks are not affiliated however, Fielder used Starbucks' famous trademark and placed "Dumb" in front of it. He also mimicked their menu but placed the word "dumb" in front of every product. The shop caused something of a media stir when the News media reported on the opening of Dumb Starbucks and it gain recognition and publicity. Dumb Starbucks and the baristas gave away free coffee until they ran out. Some individuals reportedly waited an hour, if not three hours for a free cup of coffee from Dumb Starbucks. "There were also "dumb" versions of the CDs sold at [Dumb] Starbucks" (Lee). Dumb Starbucks was only open
Starbucks recognizes its employees for much of its success. This is due mostly to maintenance of a great and proven work environment for all employees. The company does not have a formal organizational chart; sot employees are permitted by management to make decisions without a management referral. Moreover, management trust and stands behind the decision of the employees and it is this that allows for employees to thinks for themselves as a part of the business, so as to make them feel as a true asset and not as just another employee.
Starbucks has several long-range goals that are set at the top of each year, and they are diligent, and confident that those goals will happen by 2015. They want to ensure 100% of their coffee is ethically sourced, invest in farmers and their communities by increasing farmer loans to $20 million by 2015. They also would like to improve farmer’s access to carbon markets; by helping them generate an additional income while improving and protecting the environment. They have a sense of commitment to the environment and neighborhoods, which I think is impeccable. Starbucks would also like to involve their employees and customers with community goals. They have a goal to mobilize their partners (employees) and customers to contribute 1 million hours of community service per year by 2015.