Financial Feasibility of Starbucks Corp
Expansion in Italy
Financial Feasibility of Starbucks Corp
Expansion in Italy This report will focus on evaluating the financial stability of Starbucks Corporation by assessing the feasibility of an expansion of operations into Italy and will include a forecast of future financial outcomes as a result of the expansion.
Company Description Starbucks began in 1971 as a single store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring tradition …show more content…
Starbucks is no stranger to international markets and has multiple overseas subsidiaries in almost every country in which they operate. In 1985, Starbucks started its expansion into different cities in the USA and Canada, opening in Chicago and Vancouver, B.C. In 1995, Starbucks decided to internationalize its business outside of North America and expanded into Japan by creating a joint venture with SAZABY Inc. Today, Starbucks is the largest coffee shop company in the world holding 42.4% of the U.S. market share (Tucci, 2017) and generating more than 10 times the revenue of its closest global competitor, Costa Coffee, as of 2015 (President, 2015).
This section shows copies of the company’s financial statements for the past five years.
STARBUCKS CORP INCOME STATEMENT
Fiscal year ends in September. USD in millions except per share data. 2012-09 2013-09 2014-09 2015-09 2016-09
Revenue 13300 14892 16448 19163 21316
Cost of Revenue 5813 6382 6859 7788 8511
Gross profit 7486 8510 9589 11375 12805
Sales, General and administrative 4719 5224 5630 6608 7425
Other operating expenses 980 3611 878 1166 1208
Total operating expenses 5700 8835 6508 7774 8633
Operating income 1787 -325 3081 3601 4172
Interest Expense 33 28 64 70 81
Other income (expense) 305 124 143 372 108
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As the world’s number one specialty coffee retailer, Starbucks sells coffee drinks, food items, coffee beans, and coffee-related accessories and equipment. In addition, Starbucks sells whole-bean coffees through a specialty sales group and grocery stores. Starbucks has grown beyond coffee into related businesses such as coffee-flavoured ice cream and ready-to-drink coffee beverages. The purpose of this paper is to analyze Starbucks business strategy, customer value proposition, company’s operations and the risks to financial results and reporting in the short term.
Starbucks Coffee originated in 1971 as a coffee and tea café opening in a small neighborhood of Seattle, Washington (Starbucks Corporation, 2010). Starbucks continued its service for Seattle residents for a decade when the new director of retail operations and marketing, Howard Shultz, decided to make some beneficial changes to the company. After two years of employment Howard Shultz decided to expand Starbucks outside of the Seattle area. In 1987 Starbucks was entering in the coffee market and the few numbers of Starbucks were now becoming a corporation (Starbucks Corporation, 2010). Fast forwarding to current times, Starbucks is
Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world, with over 16,000 stores in 50 countries (Starbucks Annual Report, 2009, p. 1). Starbucks sells high-quality
The first Starbucks opened in 1971, in Seattle’s historic Pike Place Market. The name, inspired by Moby Dick. Howard Schultz (Starbucks chairman, president and chief executive officer) had first walked into a Starbucks store. “He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community.” A third place between work and home. From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection. ("Company Information | Starbucks Coffee
The first Starbucks coffee shop opened in 1971 in Seattle Washington. The coffee shop was founded by three partners. Jerry Baldwin and Zev Siegl were teachers and Gordon Bowker was a writer. The idea to have a coffee shop came about when a close friend was selling high quality coffee beans and equipment. After a matter of time, the partners decided to purchase the product from the grower. The coffee shop was named after the Nantucket Whaleship first mate from the novel Moby-Dick.
Starbucks is a national coffee retail company that specializes in the selling, creating, and distrusting of many teas, creams, coffees, café style lunches, snacks, and flavor waters. Starbucks was founded in Seattle, Washington in 1971. Today, there are over 23,768 location worldwide. (Starbucks Corporation, 2016) Starbucks create a number of drinks available for purchase in store and power, beans, and cups available for purchase to create your own at home.
Starbucks Corporation is one of the world’s largest coffee roaster, marketer, and retailer of coffee. Some people call Starbucks as one the most success stories in the American history. In 1971, three entrepreneurs, Jordan Bowker, Zev Siegel, and Jerry Baldwin came together with $8000 and opened first Starbucks store in Seattle, WA. They were inspired by the style of roasting beans of Alfred Peet, founder of the Peet’s Coffee & Tea. They started the company with a dream of selling high-quality coffee beans and coffee machines. During their first year of operation, Starbucks used to buy the green coffee beans from Peet’s Coffee but later they started buying the coffee from coffee planters.
a. Starbucks began in 1971 when three scholars-English teacher Jerry Baldwin-history teacher Zev Siegel, and writer Gordon Bowker- opened a store called Starbucks Coffee, Tea and Spice in the touristy Pikes Place Market in Seattle.
Starbucks began as a seller of fresh roasted beans in bulk in Pike Place Market in Seattle, Washington. The original owners eventually hired a man by the name of Howard Schulz as the director of operations and marketing. At that time, Starbucks had 4 stores and a small roasting plant but Schulz had the dream to bring an experience he enjoyed in Italy of the Italian coffeehouses to Starbucks. The owners allowed him to test his new idea with the sixth store opening of Starbucks
Starbucks Corporation originated as a single store in the Pacific Northwest – downtown Seattle, WA in Pike’s Place Market over 40 years ago. The company started in 1971; the corporation was formed 1985. The Starbucks Mission Statement follows:
Starbucks Coffee opened the doors to its first location in Seattle in 1971 and moved to its permanent home at Pikes Peak Market in 1976. The humble enterprise was the creation of three college friends; Jerry Baldwin, Zev Siegl, and Gordon Bowker. The original business model was to sell high-quality coffee beans and equipment. Between 1971 and 1986, the company expanded to 6 locations around Seattle. In the beginning, Starbucks did not sell one cup of coffee (Starbucks). The way that Starbucks evolved from its modest roots into the world’s leading coffeehouse company must be credited to the leadership and vision of Howard Schultz.
Starbucks is the one of the fastest growing companies in the US and in the world that started its business in 1971 as a small shop located in Seattle, Washington, by Jerry Baldwin, Gordon Bowker and Zev Siegl. The shop was selling mostly roasted Arabica coffee beans until they sold the company to employee Haward Schlutz in 1987. Since that day, Starbucks is able to stablish its own name and reputation in the market. Starbucks has now become a good place for the customers to relax and enjoy quality time beside home and work.
Even so, just two weeks earlier Howard Schultz announced that the company will be expanding internationally. The plan is to open more than 1500 stores in Germany, France, and Britain over a 3-year span (Forbes, 2008). It is estimated that this expansion will boost revenue by more than 20 percent (MSN Money, 2008). In spite of Starbucks’ struggle among its love-hate relationship between customers and protesters, one thing that Starbucks
With their strategies in place, Starbucks decided to enter the Asia Pacific rim markets first. These markets include countries like Japan, Philippines, Indonesia, Taiwan, Malaysia New Zealand, and Australia (4). There was growing consumerism in the Asia Pacific markets with the younger generations interested in Western lifestyles and culture (4). In 1998, Starbucks opened its first store in England, and soon expanded to Switzerland, Germany, and Greece (Planet Starbucks 7). Soon, Starbucks would be operating close to 3,000 coffeehouses throughout 37 countries (8).
Starbucks was created in 1971 when Jerry Baldwin, Zev Siegel, and Gordon Bowher decided to open the first store in Seattle. The trio opened the first store in Pikes Place, which was a popular market area in Seattle. In the beginning the customers were encouraged to learn how to grind beans and make their own freshly brewed coffee at home. At that time, the store did not offer fresh-brewed coffee sold by the cup like today, they sold beans and coffee accessories. Starbucks’ name was actually adopted from the name of the first mate in Moby Dick. Currently, the company is considered the leader in the coffee retail business and widely known for its quality coffee and stylish atmosphere. The organization presently employs nearly 200,000 employees in over 17,000 Starbucks branded cafes (Starbucks.com).