STARBUCKS CORPORATION

Starbucks Corporation: Fiscal 2009 Annual Report Analysis

Starbucks Corporation: Fiscal 2009 Annual Report Analysis

Today, when people say “Wake up and smell the coffee” they are not speaking about home made coffee. They are talking Starbucks, the world's #1 specialty coffee retailer. Starbucks was established by Howard Schultz in 1985 with the name I Giornale Coffee Company. In 1987 Howard changed the name to Starbucks Corporation. The company is headquartered in Seattle, Washington. Starbucks operates and licenses more than 8,000 plus coffee shops domestically and internationally.

Starbucks Corporation sells brewed coffees, espresso beverages, cold blended beverages, and food items, teas, branded coffee drinks, a line of ice creams, and a line of compact discs through its retail stores. In addition, stores offer pastries, sodas, juices, games, and seasonal novelty items. Starbucks stores also offer coffee-related accessories and equipment, such as coffee grinders, coffeemakers, coffee filters, storage containers, travel tumblers, and mugs.

Remote Environment - Technological

The key arguments in support of Starbucks environmental adaptability, as it pertains to the remote environment, are product availability and orders taken via internet and telephone. Future expansion comprises of plans for an additional 1,200 new outlets of which 400 will be built overseas. Starbucks expects to double the number of its stores worldwide, to 10,000 in three years (Foster School of Business, 2008).

With Starbucks Express, customers can pre-order and pre-pay for beverages, pastries, and merchandise via telephone or on the Starbucks Express Web site and their order will be ready and waiting when they arrive.

The strongest argument against Starbucks environmental adaptability involves anti-American sentiment and lack of cultural insensitivity (Business Week, 2002).

Industry Environment - Competitive Rivalry

Starbucks business strategy is of market dominance and being a market leader in selling coffee products, food products, and accessories. In Seattle, Washington there is a Starbuck's outlet for every 9,400 people and in New York there is one for every 12,000 people.

Operating Environment - Labor

While Starbucks enforces almost fanatical standards about coffee quality and service, the policy at Starbucks towards employees is laid-back and supportive. (Foster School of Business, 2008).

Macroeconomic Forecast

The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Because coffee consumption is habitual, the demand for coffee is inelastic. A slight increase in the price of a cup of Starbuck's coffee will not have any serious damaging effect on its demand therefore, significant growth is forecast in Starbucks in spite of increasing prices(Parkercenter, 2006)) (Starbucks, 2007).

Its goal is to build the most recognized and respected coffee in the world. Starbucks has been successful throughout the years and its success includes the following factors:- Starbucks has location flexibility that helps to maximize its market share and build a regional recognition.

- It has agreements with retailers, restaurants, wholesalers, service providers, airlines that help to increase name recognition.

- Starbucks uses a licensing strategy in order to maintain high quality and strict control over all ...