Starbucks Business Analysis

This assignment delves into a detailed analysis of Starbucks' business operations. It examines the company's resource management strategies, recruitment and selection processes, and the role of both internal and external financing sources. The importance of budgeting is also highlighted, culminating in the construction of a simplified financial statement for Starbucks.

BUSINESS
RESOURCES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Described recruitment documentation ..................................................................................1
P2 Employability, personal and communication skills ..............................................................3
TASK 3............................................................................................................................................4
P3 What resources are required in the operations of the organisation........................................4
P4 Sources of internal and external finance...............................................................................4
TASK 3............................................................................................................................................5
P5 Contents of a trading, profit & loss account and balance sheet.............................................5
P6 Uses of budgets as a means of exercising financial control ..................................................6
P7 Financial state of a given business........................................................................................7
CONSCLUSION..............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business resources consists as an economic or productive factor that is required to
accomplish an activity, or as means to undertake an enterprise and achieve desired outcome.
Three most basic resources are land, labor, and capital; other resources include energy,
entrepreneurship, information, expertise, management, and time (Baxter, 2012). Starbucks is the
chosen organisation in this report; Starbucks Corporation is a coffee company and coffeehouse
chain. It was founded in 1971, Washington. Along with this, the report will be described
recruitment documentation that is used by the company. It will be also explained various types of
resources that are required in compelting its operations and practices.
TASK 1
P1 Described recruitment documentation
Many documents that are required in recruitment and selection process. These documents
and papers are required to form effectively because it provides complete information regarding
the vacancy to the candidate. It is required to provides correct information in it so that correct
candidate can apply for the job. In Starbucks, there is vacancy of sales assistants. It is required
for company to form effective job advertisement so that best candidate can apply for this job.
Following are the documents that are required cited position as:-
Job Advertisement:
SALES ASSISTANT
A well established organisation having opening for sales assistant. The candidate must be
holder of bachelor degree or any diploma in sales with minimum experience of 3 years in this
field with large organisation. Age limit 35 Years.
Apply with CV and recent photograph by 16th August 2017
Drop Your CV In
Sales manager
Starbucks Private Limited.
Wash Barn, UK
Ph. 9876543210, 0141-987654
Job Description:
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Job Title: Sales Assistant
Working Hours: 40 hours per week. You will need to be very flexible, prepared to work on
weekends
Benefits: 31 days holiday pro rata (including bank holidays), profit share scheme after 12
months service and pension scheme after 6 months service.
Salary: £16,000 plus performance-related bonus
Contract: 7 month contract
Based at: Wash Barn, UK.
Reporting to: Sales Manager
Person Specification:
Key Competencies Essential
Experience Previous experience in a sales or events role.
Skills and Ability  Clear written and verbal communication skills, on paper, on
the telephone and face to face
 Excellent
 project planning and organisational skills
 Able to cope with the physical demands of moving and
setting up stands and show equipment
 Excellent sales skills
 Comfortable working on own initiative and independently.
 Analytical
Attitude  Willing and flexible on working hours as there will be
evening and weekend work involved.
 Enthusiastic,energetic, creative and motivating.
 Motivated by sales
Qualifications and Good competency – able to use database, spreadsheet and
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Training word processing packages.
Personal Qualities  Enthusiastic and outgoing; able to enthuse, support, give
confidence.
 Comfortable with a wide range of audiences
Application form-
An application form is a template that employers require job candidates to fill out,
typically comprising previous positions held, education and contact information (Morgan, 2012).
Application forms are usually completed and submitted online.
P2 Employability, personal and communication skills
Employability, personal and communication skills are very much important while
applying for a specific job role in the organisation. With that, a person can easily himself or
herself.
Employability skills
Employability skills can be defined as a skills that a person needs to have in order to get a
job and/or be effective in the job role he or she has. Such skills allow the employee or person to
have a mutual and friendly relationship with colleagues or the manager thus if there are any
problems that arise they will be resolved efficiently. There are many examples of employability
skills that employees or people applying for jobs should possess which include; qualification and
experience that are directly linked to the job that is being applied for.
Personal skills
Personal skills can be defined as a skills that a person may possess but doesn’t
necessarily need when applying for a specific job role. There are many examples of such skills
which would benefit the business including; speaking different languages, trustworthy and
having a sense a humour. It is good if employees or applicants possess such sills when applying
for a job as it will make them more likely to get the job as it shows the employer other skills that
the employee/applicant have that can help the business; these skills are useful for a lot of
different jobs (Ciabuschi, Perna and Snehota, 2012).
Communication skills
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Communication skills can be defined as a skills that help a person convey information to
another person efficiently and with ease. Managers or employees with good written or verbal
communication skills will benefit the business; this is because they will be able to talk and
understand each other properly.
TASK 3
P3 What resources are required in the operations of the organisation
There are two types of resources are required in the operations of business organisations,
such are stated as under: -
Physical resources -
The main physical resources for Starbucks are; its premises, machinery, equipment,
materials and their stock. These resources are required as they are huge factoring reasons as to
why and how Starbucks makes such huge amounts of profit. A business can’t carry out its day to
day activities without having a system in place which manages physical resources. Physical
resources can include; buildings and premises, machinery, materials (and even waste) and
equipment. Businesses should manage its premises according to size, the environment and
location of the organisation and even according to its customer needs, wants and requirements as
it needs premises to operate (Grönroos, 2011). The management of the businesses machinery
greatly helps increase performance of Starbucks as it means they can produce products faster,
deliver and receive products faster, and serve customers faster and more efficiently. Things
classified as equipment could be IT hardware and software that must both be managed extremely
carefully.
Technological resources -
Starbucks’s main technological resources include their intellectual property, their
copyrights/patents, and their experience and skill. Their intellectual property is, put simply, their
ideas; things that make them unique. If the IP is kept up to date and fully modernised this will
give them a competitive advantage, as long as the ideas are original and not different versions of
competitor’s ideas. The IP of Starbucks is what makes them Starbucks, and will be how
consumers recognise the brand; if this is kept in good light customers will trust the business and
feel connected and familiar with it.
P4 Sources of internal and external finance
Internal sources of fianace: -
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Retained Profit can be defined as the amount of money that is left over when the all the
overhead and costs of business have been deducted. Retained profit could be used by a business
to pay shareholders as a dividend or to invest in new equipment such as a new state of the art
tandoori oven to make the business more efficient.
Personal Savings can be defined as the amount of personal money that the owner himself
puts into the business. Personal savings could be used by a business to pay staff their wages or to
reinvest into the business to revamp the décor or front house of the restaurant (Huang, Lai and
Lo, 2012).
Sales of Assets can be defined as the amount of money that come from the sale of stock
or assets that belong to the business. This is a good source of finance for Starbucks to use as it
will make space available within his restaurant that he can use for other purposes such as storing
stock or produce.
External sources of finance -
Shares: Limited companies could look to sell additional shares, to new or existing
shareholders, in exchange for a return on their investment.
Overdraft: A bank overdraft may be a good source of short-term finance to help a
business flatten seasonal dips in cash-flow, which would not justify or need a long-term solution.
The advantage here is that interest is calculated daily and an overdraft is therefore cheaper than a
loan.
Hire purchase: Hire purchase arrangements enable a firm to acquire an asset quickly
without paying the full-price for it. The company will have exclusive use of the item for a set
period of time and then have the option to either return it or buy it at a reduced price.
TASK 3
P5 Contents of a trading, profit & loss account and balance sheet
The P&L will not tell about the underlying health of the business, such as how much
money it owes or is owed and what the value of its assets are. It shows how much money did
business made in a year.
There are different sections of trading and P&L which include:
 Sales- it is the total value of what you’ve sold during the period of time. The formula for
it is price time’s quantity.
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 Cost of sales- these are the costs that are directly related to the sales you have made. It
includes raw materials or stock you have purchased to resell (Montgomery, 2011).
 Operating Costs – These are all the other costs associated with running a business, such
as the rent and rates on your premises, accountancy and legal fees, and depreciation.
 Net Profit – This is almost the true profit of your business because it’s made up of all the
income and all the costs.
Balance sheet A balance sheet shows the value of a business on a particular date. A
balance sheet shows what the business owns and owes. It is also used as a guide for solvency of
the company.
 Gross Profit Margin - This ratio examines the relation between the gross profit and sales
revenue. It also measures the % of gross profit that is made from a given amount of sales.
 Net Profit Margin - It measures how much of each pound earned from sales of good and
service the company is translated into profits.
 Return On Capital Employed - ROCE should always be higher than the rate at which the
company borrows otherwise any increase in borrowing will reduce shareholders.
P6 Uses of budgets as a means of exercising financial control
There are two ways of budgeting, businesses either budget by using a zero budget or by
allocating a budget. A zero-based budget isn’t like a traditional budget in the sense that a set
amount of money is given to different departments depending on their needs instead when an
employee needs money to spend they have to go to their manager and justify their reasoning for
needing the money; money will be released from the business on a case-bycase basis. An
allocated budget it the opposite to a zero-based budget, an allocated budget is what Starbucks
uses, it is figured out by deciding upon the amount of money that is the budget and then using
analyst figures of forecasted costs, revenues and resources, the budget is then divided up into the
different departments whilst taking into account the number of employees working within it
(Morgan, 2012). A budget is an estimate of the costs, revenues and resources that are going to be
needed in the future over a set period of time. Starbucks uses an allocated budget to:
 Get all the facts the business needs to ensure that the money they have is going to the
right place to ensure that the company grows as quickly and efficiently as possible
 Limit expenditures that are unnecessary
 Create a “financial roadmap”
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 Plan for future growth as using a budget means that money that was being “wasted” in
one area can now be used to invest in future business opportunities
 Establishing attainable targets
P7 Financial state of a given business
Income Statement of Starbucks
Revenue 10/2/2016 9/27/2015 9/28/2014
Total Revenue 21,315,90
0
19,162,70
0
16,447,80
0
Cost of Revenue 8,511,100 7,787,500 6,858,800
Gross Profit 12,804,80
0
11,375,20
0 9,589,000
Operating Expenses
Research Development - - -
Selling General and
Administrative 7,970,300 7,130,200 6,086,800
Non Recurring - - -20,200
Others 980,800 893,900 709,600
Total Operating Expenses - - -
Operating Income or Loss 4,171,900 3,601,000 3,081,100
Income from Continuing Operations
Total Other Income/Expenses
Net 108,000 372,500 142,700
Earnings Before Interest and
Taxes 4,279,900 3,973,500 3,223,800
Interest Expense 81,300 70,500 64,100
Income Before Tax 4,198,600 3,903,000 3,159,700
Income Tax Expense 1,379,700 1,143,700 1,092,000
Minority Interest 6,700 1,800 1,700
Net Income From 3,135,900 2,946,200 2,336,40
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Continuing Ops
CONSCLUSION
Form the above mentioned report, it has been concluded that, business resources having
an important role in growth and success of any organisation. The present report is based upon
Starbucks. The first task of the report involves documentation which are required in recruitment
and selection of company. There are many physical and human resource through a company
achieve its goals and objectives from target market. Along with this, the second task is described
internal and external sources of finance; and the importance of budgeting is also defined. At last
the financial statement of Starbucks is created.
REFERENCES
Books and Journal
Baxter, R., 2012. How can business buyers attract sellers' resources?: Empirical evidence for
preferred customer treatment from suppliers. Industrial Marketing Management. 41(8).
pp.1249-1258.
Chow, A. T., and et. al., 2011. Broadband network with enterprise wireless communication
system for residential and business environment. U.S. Patent 7,944,948.
Ciabuschi, F., Perna, A. and Snehota, I., 2012. Assembling resources when forming a new
business. Journal of Business Research. 65(2). pp.220-229.
Grönroos, C., 2011. A service perspective on business relationships: The value creation,
interaction and marketing interface. Industrial marketing management. 40(2). pp.240-
247.
Huang, H. C., Lai, M. C. and Lo, K. W., 2012. Do founders' own resources matter? The
influence of business networks on start-up innovation and performance. Technovation.
32(5). pp.316-327.
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Montgomery, C. A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Morgan, N. A., 2012. Marketing and business performance. Journal of the Academy of
Marketing Science. 40(1). pp.102-119.
Wahl, M. and Prause, G., 2013. Toward understanding resources, competencies, and capabilities:
business model generation approach. Entrepreneurship and Sustainability Issues. 1(2).
pp.67-80.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Online
Sources of Finance Available to a Company: Internal and External, 2017. [Online]. Available
through: <http://www.yourarticlelibrary.com/financial-management/sources-of-
finance/sources-of-finance-available-to-a-company-internal-and-external/69262/>.
[Accessed on 16th August, 2017].
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