The firms' core market is the US, where 54.5% of its stores are located (Loxcel Geomatics, 2017) and 73.7% of its net revenues originate (Starbucks, 2017b). The firm has a dominant passion in the US, where it has 42.4% of the total gourmet coffee chain market (Statista, 2015). It is ahead f the leading competitor Dunkin Doughnuts, under the Dunkin' Brands Inc. banner which has a 25.5% market share, with the remaining 32.1% market being fragmented, made up of many smaller players (Statista, 2015). The firm has faced a number of challenges in the United States, where the rapid expansion had resulted in significant levels of cannibalisation and prohibitive overhead costs impacting negatively on profits (Schultz & Gordon, 2011). The negative publicity associated with the closing of the stores, harm the reputation in short-term, as it helps the organisation to become more profitable (Schultz & Gordon, 2011). In reality, the organisation may not to be increasing its market share due to the growth in the market, but it is increasing the number of customers served, 2013 an estimated 1,959 million customers were served in the United States, this rose by 5.84% in 2014 to 2,073 million, by 5.51% in 2015 to 2,188 million and an estimated 2,366 million in 2016 which was 8.15% growth in customer numbers (Trefis Team, 2016).
The company maintained its position as the leader in the gourmet cafe coffee market through a high level of control over the supply chain to maintain quality, as well as differentiation of the products sold. During the Christmas period the company changes the cups to the red cups, and offers seasonal specialities which are often very popular, such as the eggnog latte, while at Halloween there is the Halloween spiced lactate, a brief review of the company's social media will demonstrate the popularity of these products. The organisation is also investing in research and development to improve existing products and bring new ideas to market, which was seen recently with the freeze-dried Starbucks Via brand (Schultz & Gordon, 2011).
Internationally, the company is also a leading brand, very well known, supported through excellent marketing, including product placements in blockbuster films, as well as extensive use of social media marketing (Phan, Thomas, & Heine, 2011). With the company demonstrating increasing growth internationally, especially the Asian markets, the organisation also appears to be well placed internationally (Starbucks, 2017a).
To assess the way in which investors appear to be perceiving the current and potential future performance of Starbucks, rather than just considering the number of stores in market share, the stock price movements can also be considered.
Starbucks Ratio Analysis The relevance of ratio analysis cannot be overstated in seeking to assess the financial viability of an enterprise. As Porter and Norton (2012) point out, ratio analysis is one of the most important “techniques used by investors, creditors, and analysts in making informed decisions” (p. 698). Starbucks Corporation remains one of America’s foremost coffee marketers and retailers. In addition to sourcing, roasting, as well as selling coffee, the
However, the company has in general enjoyed success overseas and as a result international sales now account for 27% of operating income (2010 Starbucks Annual Report). The international division remains a key source for growth at Starbucks, in particular the Chinese market, where Starbucks has enjoyed considerable success and now sits at over 500 stores. The company struggled in the mid-2000s due to two main factors. The first was the
STARBUCK'S STRATEGY AND INTERNAL INITIATIVES FOR PROFITABLE GROWTH Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth Strengths Weaknesses Opportunities Threats Michael Porter's 5 Forces Model Industry Competition Threat of New Entrants Buyer's Bargaining Power Bargaining Power of Suppliers Formulate Strategic Marketing Improve Standing of Stock Market Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth As Starbucks was expanding, another emphasis was set on hiring talented leadership in managing the huge momentum
Starbucks and Peet's have similar gross margins. Dunkin' Brands has a much better gross margin at 78.9%, while McDonalds has a lower gross margin at 39.6%. Starbucks' gross margin might put it in the middle of the pack for quick service, but it is still a healthy margin. The company is profitable, something most of the firms in the industry are. Interesting, Dunkin is the least profitable of these
Starbucks and Team-Building One company which builds the inherent value of team-building right into their reputation is Starbucks. Starbucks is known for valuing not only their employees but the manner in which their employees work together; this is an aspect of the company which has long been built into the company image. The First Step of Team-Building: Valuing Employees One of the ways that employees are rewarded for their teamwork starts with the
Starbucks aims at inspiring and nurturing the human spirit. With this in mind, learning and growth are part of human inspiration and nurture. Starbucks has engaged diverse objectives that add to organizational learning and growth. However, this paper tackles three objectives. The performance measure, level of performance and a new program or action will be included. This will highlight ways of making improvements on the existing objectives. The first objective is