Corporate Finance Assignment 2022

Corporate Finance
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Executive Summary
The term corporate finance is the area of finance where the managers of the company take
various steps and so as to source the funding, capital structure of the company and the actions
that the managers of the company take so that the shareholders worth and value can be increased
for this purpose of the study. Financial performance of the organisation is predicted by analysing
balance sheet, debt equity ratio, current ratio and graphs. Starbucks has made various decisions
so as to make the company’s financial performance better. The company is not successful in the
various countries due to the competition that is faced by its competitor. Strategy are most
beneficial part for a business who is operating their business at global level. So, it is included in
the report for enhancing their profits to generate the investor interest in organisation. One of the
most important competitors of the company is Dunking donuts which is working in Australia as
the market leader. There are various reasons which show the importance of various financial
strategies that the organisation takes so as to increase the performance of the company. In the
last, comparison between two different organisations is also included in this report.
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Contents
Executive Summary.........................................................................................................................2
Contents...........................................................................................................................................3
Introduction......................................................................................................................................4
Main Body.......................................................................................................................................5
Review of the corporate strategy and the financial performance of the Starbucks................5
In a benchmarking exercise, steps that are taken by Starbucks against Dunkin Donuts........7
Significant Trends and development that occurs in the coffee business................................9
Financial challenges which are faced by the organization...................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
Appendix........................................................................................................................................15
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Introduction
Corporate strategy can be defined as the process by which the organization achieves its goals
through formulating and executing competitive advantage in all of its operations. Along with
this, corporate strategy also helps the organization to encourage their workforce for completing
their work in an appropriate manner (Brown, Drake and Wellman, 2014). This report would
identify one of the biggest coffee business in the world which is Starbucks Co which is one of
the third largest food chains among overall the world. They are managing and controlling about
30,000 stores in different countries. This report points out and discusses the corporate and
financial strategy of the Starbuck business. Also, there is a comparison between Starbucks revals
which is Dunik Donuts, it will be a benchmarking excersie that will show advanateges and
disadvantages between both. Moreover, it also defines the explanations for executing effective
corporate strategy in the organisation. In the last, financial challenges and opportunities which
are faced by the management of Starbucks where the impact of the regulators would be identified
on the company
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Main Body
Review of the corporate strategy and the financial performance of the Starbucks
Reasons for demonstrating corporate and financial strategy by the organization
In the present scenario, Starbucks is operating their business at the multi-national level.
Therefore, business enterprise must formulate reports which lead the organization to retain the
top position in the market (Charlo, Moya, and Muñoz, 2015). In the year 1998, Starbucks
achieved huge success due to its corporate strategy which was considered to increase its market
share. So, the number of sales about their products will be increased. (Cehen and et. al., 2016).
This results the administration department purchases and acquire the Seattle Coffee holdings
which is a UK based coffee chain. This results in favourable results for the organization because
it increases their market area. Due to which there is a direct increase in the sale of their products
which increases the direct profits for the organization.
Figure 1 Share price trends of Star bucks
Source: Annual report Star Bucks, 2014
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Through the above graph this is seen that the price of the share of the company is increasing on
the regular interval which defines that the company is performing well in the country. But after
year 2013 and onwards to year 2014 the company’s share price becomes stable and started to
decline.
Starbucks operates their business through utilizing and implementing two different methods.
First in which Starbuck operate their business through their internal departments. Whereas, the
other method is to provides or offer franchise and license to suitable candidate. In the year 1999,
profits for the first six months for the corporation is 1.6 billion $ but due to the decision of
purchasing Tazo, which is one of the leading tea brands of Portland (Grigg, Connor and Maas,
2018). There is an increase in the stores of organization within the number of 1,000. Due to this
strategy, the profits earned by Starbucks are 2.3 $. Moreover, this result in the corporate strategy
for the operations of Starbucks was also increased. Therefore, the management must formulate
and inter-relate their corporate and financial strategy for increasing the profits (Kavale, Mugambi
and Namusonge, 2014). Some reason due to which all organizations must signifies their
strategies among the stakeholders.
 To meet with objective- There are various issues present in the organization due to
which various issue works as a barrier for the organization to meet with their objectives.
So, strategy helps the workforces of Starbucks to perform their work systematically. This
activity results that an organization can complete its work systematic manner which
increases their profits.
This statement signifies that with the implementation of various policies in the organization. It is
easy for the management to make an effective strategy to complete their work appropriately.
These are the reasons due to which Starbucks achieves huge success in the market.
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