Introduction * In 1971 Starbucks opened operations in Seattle’s Pike PlaceMarkets with the future aim of providing coffee to a number of restaurants and surrounding bars.
With the recruitment of HowardSchultz who led the marketing and retail efforts of Starbucks. * In 1982 , the company took a change in direction through the views of Schultz, who after visiting Italy tried to adapt the same principles in order to a strong bar culture. Schultz then utilized Starbucks ability to provide quality coffee beans and opened up a new store called IlGiornale, which brewed coffee from these particular beans. In 1987 , Giornale had decided to take over the assets of Starbucksand also, further changed its name to Starbucks Corporation. By theend of the year, Starbucks had increased the number of stores to 17and furthered its location span by entering Chicago and Vancouver.
* In 1990 , the company took further steps forward with expansion of the Seattle headquarters and an increase in resources with theopening of a new roasting plant. Relationships and other ventures alsotook off during the early nineties as the company looked todevelopment organizations to further its progress. In 1995 , the company really established its name with the openingof the 676th store as well as increasing the products in store with theaddition of compact discs a result of a previously popular experimentwith ‘in-house’ music. * In 1996 , the company kept on stretching its reach by entering intothe market of Japan, Singapore and Hawaii. This was achieved through joint ventures including the one formed with Sazaby Inc. , whichpushed through the development of coffee houses in Japan.
3 *By the year 2000 things had progressed so far that 3,300 stores were already opened, the company had ventured into countries ranging from England to Australia & China. * By last quarter of 2008 , total international stores became 5113store & 11567store in United States. 2- Current situation The current international situation for Starbucks seems to be anemerging part of their business and the reorganization of this is proved by their aim to become a leading global company through making a difference in people’s lives all around the world.This goal is quite closeto being achieved as proved the Starbucks current locations ininternational markets and the successfulness of these ventures.
Thecurrent countries in which Starbucks are located in are: Australia,Bahrain, Canada, Hong Kong, Israel, Japan, Kuwait, Lebanon,Malaysia, New Zealand, Oman, Peoples Republic of China, Philippines,Qatar, Saudi Arabia, Singapore, South Korea, Switzerland, Taiwan,Thailand, United Arab Emirates, Egypt, United Kingdom, and theUnited States. 2. 1 Current performanceOverall, the aim of becoming a worldwide global brand seems to beworking in favor of the company and is helping it to attract theattention of many major companies who would like to share apartnership. This is all positive news for the company because itprovides a strong basis for future development of internationalmarkets, which further strengthens the mission to become one of theleading specialty coffee retailers in the world. 4 However, the net revenues increased 3 percent to $2.
5 billion for thefourth quarter of 2008, compared to $2. 4 billion for the fourth quarterof 2007.For the 13-week period ended September 28, 2008,Starbucks reported net income of $5. 4 million, which included $105.
1million of restructuring charges and other transformation strategycosts. Net income was $158. 5 million for the same period a year ago. The company actions announced in July of 2008 to close approximately600 company-operated stores in the U.
S. and 61 company-operatedstores in Australia, and reduce approximately 1,000 open and filledpositions within its leadership structure and non-store organization. 2. 2 Strategic posture 1-mission To inspire and nurture the human spirit— one person, one cup,and one neighborhood at a time” “The mission of Starbucks is to establish Starbucks as thepremier purveyor of the finest coffee in the world whilemaintaining our uncompromising principles while we grow” None of this success would have been possible without a set of goals that the company aimed to achieve and a set of principles,which governed the decision making process. The six principlesof Starbucks are stated as: 1- Provide a great work environment and treat each other withrespect and dignity.
2-Embrace diversity as an essential component in the way wedo business. 3- Apply the highest standards of excellence to the purchasing. 4- Roasting and fresh delivery of our coffee.
5 5- Develop enthusiastically satisfied customers all of the time. 6- Contribute positively to our communities and ourenvironment, and recognize that profitability is essential toour future success. Application of these principles can be used as a guideline forall employees from managers to workers to aim to achievethe company’s goals, while maintaining a certain type of standard.This mission statement along with the set of guidelines providesa focus for employees as they make strategic decisions. It notonly supports the employees, but supports the customers aswell, making a note that they should be satisfied all of the time.
The mission shows alignment with the vision by stating how thecompany plans to reach the broad goals set by the visionstatement. Another supporting sentence in the missionstatement is that the “company applies the highest standards of excellence to the purchasing, roasting and fresh delivery of itscoffee. This statement supports the idea that Starbucks usesthe best available resources to give it a recognized andrespected name. 2- Objectives & Strategies: Here are the following objectives of Starbucks: Our Coffee It has always been, and will always be, about quality.
We’repassionate about ethically sourcing the finest coffee beans,roasting them with great care, and improving the lives of people 6 who grow them. We care deeply about all of this; our work isnever done. Our Partners We’re called partners, because it’s not just a job, it’s our passion.Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respectand dignity. And we hold each other to that standard.
Our Customers When we are fully engaged, we connect with, laugh with, anduplift the lives of our customers— even if just for a fewmoments. Sure, it starts with the promise of a perfectly madebeverage, but our work goes far beyond that. It’s really abouthuman connection. Our Stores When our customers feel this sense of belonging, our storesbecome a haven, a break from the worries outside, a placewhere you can meet with friends.
It’s about enjoyment at thespeed of life—sometimes slow and savored, sometimes faster. Always full of humanity. Our Neighborhood Every store is part of a community, and we take ourresponsibility to be good neighbors seriously. We want to beinvited in wherever we do business.
We can be a force forpositive action— bringing together our partners, customers, andthe community to contribute every day. Now we see that ourresponsibility—and our potential for good—is even larger. Theworld is looking to Starbucks to set the new standard, yet again.
We will lead. Our Shareholders 7We know that as we deliver in each of these areas, we enjoy thekind of success that rewards our shareholders. We are fullyaccountable to get each of these elements right so thatStarbucks—and everyone it touches—can endure and thrive. From all what mentioned above that Starbucks is aiming tosuccess through quality of product, diversify in business andplace, to satisfy customers and shareholders, through pleasantand nice existence nearly to everyone.
2. 3 Financial Analysis The general financial performance for Starbucks in 2008 was decliningfrom the previous years dramatically.The following analysis will showthis fact. Investment Returns % Company Industry Return On Equity 12.
6 25. 8Return On Assets 5. 6 13. 2Both the ROE and ROA are lower than the industry’s average, whichmeans that the company is not using both the equity and their assetsproperly to increase their revenue. Profit Margins % Company Industry Gross Margin 16 27Pre-Tax Margin 4.
4 13. 2Net Profit Margin 3. 03 8.
5Starbucks margins are lower also that the industry’s average,especially in 2008 where the net profit margin reduced to 3. 03 from6. 3 in 2007. 8