Starbucks Financial Analysis

Assignment #1 Starbucks Financial Analysis

1. Provide a detailed overview of Starbucks, Incorporated

The Starbucks Company Incorporated was started in 1971 in Seattle Washington. The company was initially started by three gentlemen, Mr. Jerry Baldwin, Zev Siegl and Gordon Bowker. The Starbucks name gave from Moby Dick after a gentleman on the Peguod, whose name was Starbuck. In 1988, the Starbucks chain was sold to Howard Shultz.

The company is considered a premier roaster, marketer and retailer of specialty coffee and tea in the world, operating in more than 50 countries (Starbucks 2011 Annual Report 2011). The Starbuck Corporation’s common stock trades on the NASDAQ under the symbol “SBUX." Starbucks is considered to be the largest coffee house company in the world, with approximately 17,003 company operated and licensed stores. Starbucks has expanded its market by identifying the needs of the consumers, with emphasis on creating long-term value in the marketplace. This was done by reviewing the company’s landscape, understanding the impact of the competitive companies as well as understanding the resources that were needed to increase consumer awareness and increase traffic.

As a marketplace leader, Starbuck’s knowledge of the overall growth of the

community and the ability to understand that being a market leader would translate to

profits have been instrumental in the growth of the company. Howard Schultz’s 2011 letter to the shareholders focused on Starbuck’s accomplishments and the commitment, he made to improve the operational foundation, invigorate customer.

STARBUCKS FINANCIAL ANALYSIS

relevance. The key to Schultz's success was his understanding of the consumers, competition and not losing sight of their core values. “During the past year global

revenues reached a record 11.7 billion, an 11 percent increase on a comparable 52-week basis. (Starbucks 2011 Annual Report, Shultz's letter 2011). Shultz stated, “It is significant that we achieved these results against the backdrop of stubbornly higher commodity costs and a difficult global economy. Our momentum is also worth noting, as fourth-quarter global same-store sales grew at a rate not seen since 2006” (Starbucks 2011 Annual Report, Shultz's letter 2011). This success was due to the unique business model, which leverages the emotional connection to consumers and ongoing innovation.

The newest change in doing business for Starbucks is their ability to serve the consumers not only at retail; this was done at home, at work, on the go and online. The launch of new products as well as the method in which the consumers could purchase the products represents the innovative approach to grow the business. Examples