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TitleStarbucks Case Study
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Page 1

1.0 INTRODUCTION

Name : Starbucks Corporation (NASDAQ: SBUX)

Headquarters : Seattle, Washington, U.S.

Employees : 176,000 in 2008

Revenue for 2008 : US$10.383 billion

CEO : Howard Schultz (Founder of Starbucks coffeehouse)

Starbucks Corporation is an international coffeehouse chain based in Seattle,

Washington, United States. Starbucks is the largest coffeehouse company in the

world, with 16,120 stores in 49 countries, including around 11,000 in the United

States, followed by nearly 1,000 in Canada and more than 800 in Japan.

Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and

cold drinks, snacks, and items such as mugs and coffee beans. Through the

Starbucks Entertainment division and Hear Music brand, the company also

markets books, music, and film. Many of the company's products are seasonal or

specific to the locality of the store. Starbucks-brand ice cream and coffee are

also offered at grocery stores. Starbucks’ Italian style coffee, espresso

beverages, teas, pastries and confections had made Starbucks one of the

greatest retailing stories of recent history and world’s biggest specialty coffee

chain. In 2003, Starbucks made the fortune 500.

Strategic Management PMS 3393 1

http://en.wikipedia.org/wiki/Ice_cream
http://en.wikipedia.org/wiki/Music
http://en.wikipedia.org/wiki/Hear_Music
http://en.wikipedia.org/wiki/Espresso
http://en.wikipedia.org/wiki/Drip_brew
http://en.wikipedia.org/wiki/Japan
http://en.wikipedia.org/wiki/Canada
http://en.wikipedia.org/wiki/Coffeehouse
http://en.wikipedia.org/wiki/United_States
http://en.wikipedia.org/wiki/Washington
http://en.wikipedia.org/wiki/Seattle
http://en.wikipedia.org/wiki/List_of_coffeehouse_chains
http://en.wikipedia.org/wiki/United_States_dollar
http://en.wikipedia.org/wiki/United_States
http://en.wikipedia.org/wiki/Washington
http://en.wikipedia.org/wiki/Seattle,_Washington

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http://en.wikipedia.org/wiki/Alfred_Peet

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In millions, except
For per Share Items

Oct 2
2005

Different
Between
2004
and2005

%

Oct 3
2004

Different
Between2004
and2003
%

Sept 30
2003

Current assets $1209334 (11) $1350895 46 $924029
Current liability 1226996 64 746259 23 608703

Working Capital (17662) 604636 80 335767
Total assets 3514065 4 3386541 22 2776112
Long-term
debt(including
current portion) 3618 17 4353 (14) 5076

Shareholders equity $2090634 (15) $2470211 19 $2068689

Analysis summary

As observed in the above table current assets increased for 2003-2004 by 46%.It

could be because of company activations and reloads on Starbucks Cards, but

for the year 2004-2005 is dropped by 11% because of the advertising Starbuck

coffee

Besides, the shareholder Equity increased due to the increases in net earning for

the company. While the shareholder equity decreased for about 15% in

comparison of 2004-2005. However shareholder equity increased by $2090634

in 2005 it’s because of the stability net earning.

Long term debt shown in the table dropped 14% from 2003 to 2004 previously it

was known company’s net earning increases, thus it could mean that the

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company has extra earnings to pay off debt. Since this is a long term debt, the

amount is tremendously big and by reducing it by 14% within a year shown that

the development new shops really has a big impact on the company’s

performance.

C) Financial Ratio

1. Liquidity ratios

2005 2004

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Introducing accurate mixing level of the coffee in a tea bag style will increase the

sales at supermarkets. Packing it together with the guidelines on mixing coffee

beans and sugars with milk to result same taste of coffee will never reduce the

quality of the coffee. Providing proper steps to customer will make a better quality

of coffee indeed.

.

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6.0 CONCLUSION

Starbucks success is achieved through a few factors.

 Outstanding Quality of the coffee brewed

 Excellent service provided at the stores

 Fast growth of new stores all around the world

These factors not only have increased the sales but also the reputation among

the coffee lovers. Starbucks encounters aggressive competition in all areas of its

business activity. The market for each of their business segments are

characterized by vigorous competition among major corporations with long

established positions and a large number of new and rapidly growing firms.

Anyway, as Starbucks have a good financial capacity with good strategies; it can

overcome all the competitors to shine high as the first class coffee purveyor.

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