THREE YEARS PROPOS

Three Years Proposal to Starbuck's Managing Board of Directors

Three Years Proposal to Starbuck's Managing Board of Directors

Historical Overview

The original idea of creating the Starbucks coffeehouse giant came from three men from Seattle in 1971. They had a small business going and recruited a man by the name of Howard Schultz in 1982 because he had a great reputation in the business world. Schultz was just the addition that the company needed. He was on a business trip in Italy and took notice to the overwhelming amount of coffee bars there and how customers frequented the establishments more than once throughout the day. Howard immediately recognized this as a huge opportunity. He wanted to bring this kind of lifestyle to the American culture and did not take no for an answer when his business partners at Starbucks refused to take part in the offer.

Howard Schultz opened a coffeehouse by the name of II Giornale in Seattle and sold Starbucks coffee there. He had great success and offered to buy Starbucks from the three owners in 1987, who agreed for the price tag of $4 million. Howard changed the name of his three stores over to Starbucks and did not look back after that point. He knew that Americans would eventually be turned on to the idea of the coffee bar scene, and in 1991 the firm turned over a profit. This same year, Schultz established an agreement CARE and in 1992 the firm was made public, starting out at $17 a share.

Mission Statement

Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

Vision

Starbucks wants to become as large internationally as they are in the United States, developing 20,000 establishments domestically and 20,000 establishments internationally.

Values

Starbucks is committed to product quality, diversity, employee and customer relationships and improving the environment.

Objectives

Become the foremost retailer of coffee and coffee products worldwide.

Internal Organization Analysis

Financial Position and Capacity

Starbucks has 383,721,055 shares outstanding with only 13, 900 shareholders in the company. Of the shares already bought, 200,116,611 of them are owned by officers or directors. The annual net revenue of Starbucks is in excess of 20% since 2004. In September 2006, Starbucks plans on adding 2,400 new locations in 2007. The return on equity is expected to reach 25% in 2006. Starbucks expects earnings per share to be up to 25% this year. Starbucks has had 177 months straight of positive store sales growth as well as 15 years which included growth of 5% or higher. Annual sales for Starbucks stores in the United States alone average over $1,000,000 per store in 2005. In 2005, 84% of Starbucks' sales came from the United States, while the remaining 16% came from international locations. In 2005, 84% of the company's sales came from company-operated retail, while the remaining 16% came from specialty operations. In 2005, Starbucks' net revenue was $6,369,300,000, which was an increase of $1,075,000,000 since the previous year. The net income for 2005 was $494,500,000, which was ...