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Starbucks Analysis

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Future Financial Health Analysis: Starbucks
S. Albright
Grand Canyon University: FIN 504
March 5, 2016

Starbucks started back in 1971 in Seattle, Washington. Initially, Jerry Baldwin, Zev Siegl and Gordon Bowker sold only coffee beans and coffee making equipment (coffee .org). It wasn’t until the company was sold to its Director of Retail Operations, Howard Schultz, that Starbucks started selling coffee drinks and soon after, Schultz spread the chain of stores throughout the U.S. taking over many small coffee shops in the process (coffee .org) In the 1990’s Starbucks offered stock options to its employees and went public with an IPO which opened the door for higher earnings and more profitability (coffee.org). This analysis will discuss how a single coffee house in 1971 has grown to more than 22,000 stores in 66 countries in 2016. Starbucks’ goals, market strategies, revenue and financial outlook will be discussed.
Strategies and Operating Characteristics
According to the Global Responsibility Report (2015), Starbucks vision for the future and what will have the greatest potential for impact include working with farmers for ethically sourced coffee beans, pioneering sustainability economically, socially, and environmentally, and creating career opportunities for young people (2015). Starbucks Newsroom reported on March 18, 2015 that their seven strategies would grow market capital to $100 billion (2015). Revenues are currently at $16.4 billion and the U.S. comp growth averaged 7% (Starbucks Newsroom, 2015). Starbucks 2015 annual meeting of shareholders report announced seven strategies for growth (Starbucks Newsroom, 2015). These strategies are 1) Be the employer of choice, 2) Coffee leadership, 3) Grow the store portfolio, 4) Create new occasions to visit store, 5) Consumer packaged goods brand growth, 6) Build Teavana teas, and 7) Extend digital…...

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