Analysis of Starbucks Strategies and Financial Performance Report

This report provides a detailed analysis of Starbucks' strategies, focusing on its financial performance, coherence with the internal and external environment, and stakeholder management. It examines the strategies implemented by Starbucks, including store expansion, product offerings, and coffee purchasing. The report assesses the financial performance using income statements and balance sheets, highlighting key financial ratios and the company's liquidity and leverage. It also evaluates the coherence of Starbucks' schemes in relation to its external and internal environment, emphasizing the importance of customer experience and the challenges faced. Furthermore, it discusses how Starbucks operates in the interest of its stakeholders and shareholders and identifies the threats faced by the company. The report concludes with an overview of Starbucks' strategic approach to maintain its market position.

Influencing Organisational
Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Starbucks strategies......................................................................................................................1
2. Assessment of strategies of Starbucks in relation to: ..................................................................3
a) Financial performance.............................................................................................................3
b) Coherence of schemes of Starbucks in terms of external and internal surrounding...............6
3. Operating of Starbucks in the interest of its stakeholders and shareholders................................8
4. Threats faced by Starbucks and its countered..............................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategy is a term which means making plans or schemes for attaining set objectives of an
enterprise in a given time frame. Major reason behind preparing strategies is to accomplish all
the tasks and activities by reducing problems and losses of an organization. Basically, it is
indispensable for every small and large association to make effective plans or policies for
allocating all the resources in a proper manner (Ackermann and Eden, 2011). Starbucks is an
American coffee enterprise which was found in Seattle, Washington in approximately 1971 and
after that, this organization expanded its locations in almost number of countries. This report is
fully based on strategies which were adopted by Starbucks for running their business across
international boundaries. Furthermore, report is going to highlight financial performance of a
company as well as coherence of schemes which relate with external and internal environment.
At the end, report will throw some light on threats which are faced by organization while running
their business due to changes in variable factors.
1. STARBUCKS STRATEGIES
Strategies a term which is consider as an abused term which is used by most of the
society or community for overcoming their problems and issues. In fact, it is observed that
strategies are made to attain success in a minimum duration by minimizing losses of a company.
Basically, strategy is term which highlighted the methods or tools of resolving issues and barriers
incurred in a business (Angus-Leppan, Metcalf and Benn, 2010). Implementation of any
effective and appropriate strategy is one of a suitable technique of improving or reducing
problems. Starbucks is a one of a popular American coffer house chain which is famous for its
qualitative products and on time services which obtain attention of millions of consumers.
Additionally, this organization is founded by college buddies Gerald Baldwin and Gordon
Bowker later on which was modified by Howard Schultz appointed as a marketing head and
coming up with innovative ideas for promoting goods at marketplace. Their main motto is to
expand their business in number of countries for becoming a world to most coffee chain with the
help of impressive strategies. Basically schemes are linked with success which consist of factors
related with implementation of prepared plans.
Strategy framework of Starbucks: -
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One of a leading coffee industry which is famous for its tasty and delicious drinks as well
as offers complementary things for satisfying needs and demands of customers. In fact, they
come up with different ideas and opinions for capturing attention of clients.
Strategies of Starbucks are classified into different fragments which stated as follows: -
Schemes for extension in store: In 1992, Starbucks planned a development methodology
that depend on focusing on locale with most satisfying statistic profile. It is connected with
organisation’s framework to help and give administration to them. Therefore, expansion of firm
across worldwide development was started in 1995, which depended on giving licenses and to
plan a coalition with neighbourhood business (Booth, 2015). The Starbucks espresso universal
was composed the worldwide extension. Its extension came to in different parts of Japan, Taiwan
and Singapore and so on. Representatives preparing and acknowledgement is another part of fast
methodology of Starbucks which enable the organisation to cop-up with current merchandising
plan of different organisations.
Product offering procedure: This technique helps the organisation to benefit clients an
extensive variety of item decisions so that customers may enjoy numerous variety of products to
utilise. Marketing manager of an organisation trying to conduct special promotional methods for
promoting special goods at a marketplace so that maximum number of clients get attracted
towards it. Offering music CDs is another product offering system of the organisation to expand
its market share. Starbucks are giving instalment cards, Starbucks cards and e Gift which act as a
immense viewpoint to treat a companion for purchasing an espresso and drink for different
clients.
Coffee purchasing strategies: The another systems of Starbucks is buying procedure in
this building solid relationship with makers and exporters, assessing horticultural circumstances
and product yields. They are utilising fixed value buying loyalty and coming in espresso future
contracts (Brewster and Hegewisch 2017). It helps to adding to manageability of coffee makers
and furthermore help in preservation of condition. Advancing espresso development acting that
protected biodiversity and deal with a perfect and solid condition.
Current strategies:
In general terms strategy is word which implies that schemes by which individual and in
addition association accomplish its objectives and goals. Starbucks system speak to an
association answer for such business issues which are related with whether to focus on single
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business or build up an expand set of business. Altogether, to achieve greatest number of clients
the organisation need to focus on a specific part of market. Every association is working with the
rationale to increase most extreme focal points from its item and administrations. Since, they
depend on extensive variety of product offering for acquiring maximum benefit from competitive
market.
Essential strategy used by Starbucks:
 It supports in making choices. It is essentially considering as a basic leadership process
with a specific end goal to compelling the extensive variety of basic leadership.
 Methodology is filling in as an organising gadget. It is one of the essential part of
decisional challenges for individual of Starbucks (Bryson, 2011). The announcements
which are connected with methodology arranging bargains in arranging that give a
meeting to sees.
 It gives an objective to the organisation. Methodology is a sets out where business
execution and position in current situation. IT help to give well particular experience and
motivation to individuals to profit items and administrations of a company
 The advancement of organisation’s methodology has an extensive variety of drivers. It
has been seen that development in vast divisions and complex business association
through making an ideal intend to build market position of the organisation. Therefore,
by making effective strategy every organisation can accomplished its set targets with
particular aptitudes and learning, those are helpful for entire associations (Chen and et.
al., 2010).
There are different types of strategy which can be follow by Starbuck at several level
such as corporate, business and operational or functional level. At corporate level, higher
authorities are making entire plan for taking decision for other levels. As there are different types
of corporate strategies; growth, stability, renewal which helps to organisation in taking effective
decision. Another is business level strategy, at this Starbucks seeks to determine that how an
organisation should compete with each business units. Managers are allocating resources at
different level for accomplishing the goals of corporate. At this level strategy are made upon cost
leadership, differentiation and market focus through which Starbuck can lead in market. Last one
is functional-level strategy, in this organisation is focusing on improving the effectiveness of
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operation within entity which are done by different sectors such as human resource, research and
development etc.
2. ASSESSMENT OF STRATEGIES OF STARBUCKS IN RELATION TO:
a) Financial performance
Financial presentation is cluster of entire overdraft of a capital which is incurred in an
organization for running their business by implementing different strategies. Therefore for
assessing the financial position of Starbucks, we have to proceed with various money related
proclamations of the organization for example balance sheet and accounting report. Since these
two statements are one of the vital instrument for the organization (Conrad and Poole, 2012).
From these announcements financial specialists can make there significant venture decision's.
Salary articulations are comprise of different cost and costs which are finished by the
organization amid a monetary year. It is utilized to examine every one of those costs which are
finished by the organization so as to deliver its items and administrations. The principle
wellspring of assessing these announcements is to recognized aggregate net benefit creating by
the organization.
Income statement
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As per above given income statement Starbucks overall sales while current year is around
22,400m. it is expanding from most recent couple of years. The aggregate gross benefit in
current year is 12,805m. The aggregate working costs brought about by the organization 8,633m
which is likewise most elevated from past years. Subsequent to meeting all its exceptional
obligations and liabilities they are getting net wage of 2,818 million of every 2016. Hence, after
assessment process it has been calculated that organization has enough money to meet out its
liabilities and pay-off its aggregate obligations. Other the other hand, net gaining per share is
1.91 for each offer.
Balance sheet
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As per above stated balance sheet statement of Starbucks the financial position of a firm
has been identified with the help of its liquidity position. Therefore according to this,
Current ratio: Current assets / Current liabilities
: 4,761 / 4,547 = 1.04
Quick ratio: Current assets – (stocks+ Prepaid expenses) / current liabilities
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: 4761 – (1379 + 350) / 4547 = 0.67
Financial leverage: Total debts / Total equity
: 2.44
Every one of those over proportion's are use to determine the organizational financial
situation and its soundness. On the premise of its liquidity position financial specialists settle on
there choice. The monetary record is the announcement of benefits and liabilities which are
conveyed by Starbucks in their general operations. It is one of the imperative devices for making
methodologies as far as short and long term venture design. Current proportion of the
organization are 1.04, it implies that organization can adjust its benefits and liabilities divides. If
it turn out to be 2: 1 at that point, it must be more perfect for an organization. Monetary use of
the organization is around 2.44 which is implies that obligations of the organization are most
extreme and it stay unstable. Therefore it resulted in maximisation in fluctuation rate.
After assessment of both the statements, it has been discovered that organization is
significantly more adjust and solid as far as its financial abilities. The net benefit produced by
Starbucks are sufficient to meet out its costs and control additional expenses. Be that as it may,
organization do have the adequate money to pay-off its obligations and increment its pieces of
the overall industry to attain competitive benefits from others (De Chernatony, 2010). In the
event that any one needs to contribute under this organization can have the correct choice to
increase most extreme focal points from this organization.
b) Coherence of schemes of Starbucks in terms of external and internal surrounding
It has been watched that organization major spotlights were on client’s experience and its
consideration regarding one perspective and that is the thing that makes Starbucks the one of
biggest café chain in universal level. They are figured out how to convey wide level of client’s
fulfilment by serving quality items, extraordinary plan that fits in each area. Since, Starbucks has
been confronted both great and awful time. It has been watched that the way it stays steady with
its systems are wonderful. In light of the consistently changing business condition Starbucks has
related with a best administration system. With actualizing "Starbucks encounter" in every store
and exercises without an over itemized process after process. The execution of the arrangement
can have made utilization of all assets those are created over the time (Freeman, 2010). For
example, hiring of well skilful employees for distributing great items and administrations. It is
use to create positive relations with the providers for supplying perfect coffee.
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One of the gigantic complaints which comes out is the dropping of coffee quality,
through the transferring of suddenly. There is locate about the fresh out of the box new opened
chain in Romania where, isolate from plan that fits as indicated by each area. No some other
components under the Starbucks encounters fit the example which is set by the organization.
They are not socially dynamic, representatives of organization are severely treated, ill-equipped
and inconsiderate with its practices. With a specific end goal to investigate organization inside
condition depend on the quality and shortcoming which are influencing the Starbucks
techniques. A SWOT assessment is an essential apparatus to dissect organization limit of assets,
its focused deficiency that are exist at a marketplace (MacIntosh and Doherty, 2010). While
outside viewpoints are dangers to the organization prosperity. Strength of the organization is related with inside source and are assigned as most fitting
to Starbucks achieve its set goals. Weakness of Starbucks are partitioned among operational departments and those
exercises that are diminish organization in accomplish procedure execution. Products
with high price has been offered by organization to its clients. The premium costs of
these items are consider as a drawback for it to achieve accomplishment in other creating
nations. Opportunity: It have to use of these quality to come about their shortcomings and
distinguished its operational open doors. Extension in product mix by making joint
venture with tea and juice item with the use of smart acquisition techniques.
 Threats are that arenas which is prime worry in macro environment. It can influence
execution of Starbucks and the coffee business due to their effective schemes which is
implemented by different contenders (Pache and Santos, 2010).
Being a pioneer in this division, Starbucks is one of the enduring item development,
capacity to section into new portion at worldwide level. In earlier year, the execution of
Starbucks has diminished, as a result of high force of rivalry and financial emergency. Be that as
it may, in the wake of confronting every one of those challenges they are as yet overwhelming
player in espresso parts. It is the circumstance which are required select by the organization with
a specific end goal to upgrade is development and execution.
PEST analysis of Starbucks are explained as below and analysing that how these are
impacting on their business.
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Political factor – The more political stable in nation will flourish the business in
economic environment. If there is a stability of political environment is also affecting the
stability of supply chain. Political disruption can result in disruption of supply chain of Starbucks
which can also influence their day to day operations plus profitability and sales.
Economic factor – This factor can create the pressure on business in any ways. An
economic situation of country is affecting purchasing ability of customers which is indirectly
influencing brand sales and their profitability. Moreover, it is also affecting the cost of raw
material which are using by Starbucks in providing coffee. If there is a better economic situation,
then there is high profitability of brand.
Social factor – It is having a significant impact on the profitability of business.
Changing in demographics and other factors can impact on the sales of Starbucks. If there is
change in consumer preferences can affect to sales and profit of business. So, this company need
to focus on upon the millennial generation and their preferences in order to meet out with their
objectives.
Technological factor – It is responsibility of Starbucks manager to made very good use
of information technology across the world so that they can drive their performance. Along with
this, they should also focus on digital innovation in order to generate more profits during year.
3. OPERATING OF STARBUCKS IN THE INTEREST OF ITS
STAKEHOLDERS AND SHAREHOLDERS
For any association investors and partners are one of the imperative gatherings which are
related with the organization straightforwardly or by implication. There are a portion of the
imperative strategies that an organization utilized as a part of request to make an incentive to its
clients, providers and other related gatherings. Investors esteem boost can be examined through
different ways:
 In connection to inborn esteem, investors premium is the Net present estimation of the
line of benefits that falls to its proprietors those are reduced at the cost of value (Selznick,
2014).
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 In terms of market value, investor’s premium is the present securities exchange
estimation of the company's aggregate offers.
Therefore, as long as the market estimations of stocks is effective in assessed the
organizations add up to returns, exhibit estimation of stocks at advertise valuations which is by
all accounts culminate pointers of inalienable esteem. Starbucks has investigated that exchanging
images which are worked through SBUX. In 2011, Starbucks has around 22,000 investors on a
records. The best routes through which an organization can spoke with its investors through
mailing.
Hence, partners are by implication connected to the referred organization with a specific
end goal to accomplish their qualities frame the organization (Suppiah and Singh Sandhu, 2011).
The investors esteem expansion is lined up with enthusiasm of long haul enthusiasm of investors
and different partners. It is critical to have legitimate consideration not entirely on organization's
piece of the pie value. Representatives: It has been discovered that each Starbucks is unique in relation to each
other because of general population. It has been computed that around 2 lakh workers are
working in conveying administrations to clients in Starbucks. They are having maximum
level of fulfilment from the organization, due to the medical insurance plans. Clients: They are notable for their different coffee with its nature of serving qualitative
drinks to its clients. As their name was composed on it. It recognized brand want in the
brain of clients to appreciate cup of coffee in Starbucks. They are connected with clients
through discussing it with clients.
 Franchisees: Around 47% of every one of organization's stores are authorized stores,
which are for the most part worked by franchisees. Franchisees pay some kind of
steadfastness commission to Starbucks for utilizing its logos, formulas and different focal
points shape its promoting efforts (Van der Heijden, 2011). These are essentially, worked
in local and global.
Starbucks is also defining CSR as conducting business in different ways for the benefit of
communities in which they are operating their business for stakeholders which also includes
shareholders. The stakeholders of this company including employees, customers, governments.
The director this company they are discussing CSR programmes with their stakeholders in order
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