Success Factors And Risks Of Starbucks Corporation Essay

1355 WordsNov 27, 20166 Pages
IV. Success Factors and Risks A. Starbucks Corporation is a retailer that relies on customer spending, therefore, results of operations are sensitive to changes in the economy. Consumers may have less money for flexible purchases which can reduce their purchases or even result in a change to a competitors ' lower priced products as a result of job loss, bankruptcies, higher interest rates, higher taxes and reduced access to credit (sec.gov, 2016). Decreases in consumer transactions will negatively impact financial performance as reduced revenues without corresponding decreases in expenses result in reduced sales. Downward pressure would also negatively impact store sales, net revenues, operating income and earnings per share. There is also a risk that if negative economic conditions persist for a long period of time, consumers may make long-lasting changes to their purchasing behavior, including on a more permanent basis. Starbucks has built an exceptional reputation for quality products throughout the world. In order to remain successful in the future, Starbucks must preserve, grow and influence the value of their brands across all channels, particularly outside of the United States where their brand is less well-known. B. Starbucks Corporation 's business strategy includes new stores, foodservice, branded products and other enterprises. They rely significantly on a variety of business partners, including licensee and joint relationships, particularly in the

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