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Starbucks presentation

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by

Maribel Bolanos

on 20 November 2012

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Transcript of Starbucks presentation

Profitability Ratios Effectiveness Ratios Liquidity Ratios Solvency Ratios Starbucks vs. Industry Expectations for the Future Balancing Profitability and Social Conscience Improving U.S. Stores International Expansion for 2012 - Company’s main focus is to expand international, that’s where profits comes from. - Currently have 150 stores in Asia - Plan to open approximately 800 world wide - Currently plan to remodel
1,700 stores in the U.S - Make it more environmental Friendly - Create a better atmosphere - High Unemployment rate in the US - In 2011 added 3,700 new jobs - In 2012 plan to add 12,500 new jobs worldwide - The liquidity ratios helps determine the company’s ability to pay off their short term liabilities. - the time period is less than a year. - it is better for the company to have a higher ratio, meaning the larger the margin of safety for the company to cover its short term liabilities Improves the ways products reach customers
At home, work, travel, shop and dine

Powerful relationships with grocery stores, drugstores, and other sales channels

Continue to open different avenues to reach more customers
Mobile payment applications
More than 20million by the end of their 2011 fiscal year Large Portfolio of Products
&
Evolving Channel Development Strategy Encourages consumers to buy more
3.6 billion active members
Retain existing customers and attract new ones Loyalty Program Seasonal Drinks
Reusable cups for discounted refills
K-Cups and Verisimo
Via Ready Brew
Single serve coffee market
In more than 37,00 points in U.S Continuous Product Innovation Weakening potential in U.S offset by strong operating performance in the global markets.

Strong global store growths have resulted in increased sales, higher operating margins and net earnings.
Global store sales growth in Asia-Pacific
FY 2011 22%
FY 2010 2% Growing International Expansion Starbucks and Coffee and Tea Manufacturing Industry Financial Highlights Profitability Ratios Effectiveness Ratios Liquidity Ratios Solvency Ratios Starbucks vs.Industry Ratios History 1971 The first Starbucks opened in
Seattle’s Pike Place Market, Washington. 1987 Howard Schultz changed
the name to Starbucks
Corporation after made
a trip to Italy. The founders were Jerry
Baldwin, Gordon Bowker, and Zev Siegl. 1992 Starbucks completed the
initial public offering (IPO) under the
Trading symbol SBUX. 1996 Expanded their products,
stores and roasting facilities. Expanded to Japan and
Singapore. 2011 Extend the Starbucks brand into grocery channels across the U.S. and launches Starbucks.com.

Expanded to England, Malaysia, and New Zealand. Starbucks celebrated their 40th anniversary.



Total Stores 17,651. 1998 - 2010 - Solvency ratio is to measure
a company's ability to meet long-term obligations. - it is better to have lower debt to assets and long-term debt to assets ratio for the company because it means the company has lower risk. Starbucks is the premier roaster and retailer of specialty coffee in the world.
Mission – is to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time
Starbucks main goal is to provide high quality coffee and build a strong connection with their customers.
Balancing profitability and social conscience is as much a part of Starbucks core as their coffee. Background Four business segments Revenue from 4 channels Company Operated Stores Licensed stores Starbucks Revenue Starbucks places the stores in locations where there’s a high traffic in order to attract more customers. Consumer Packaged goods Food Service They have licensing agreements with prominent retailers in the market, and receive a royalty and license fees and sell their coffee, tea and related products for resale in the licensed locations
Sold to warehouses and internationally
License their ingredients and sell them to companies to produce their branded products. They have food service that focuses on selling Starbucks products to other companies that service businesses
ex: education, healthcare, hotels, restaurants, airlines, and etc. locations that are based on attracting business. International Other United States Four Business Segments The U.S. segment run’s company operated and licenses stores in the United States.
The International business segment is in charge of company operated, licenses and foodservice stores in Canada and United Kingdom. Global
The Global consumer products group consists of coffee and tea products sold in packages worldwide to grocery stores, warehouses, and food services. The fourth(other) business segment contains the Seattle's Best Coffee operating segment and Digital Ventures business and unallocated corporate expenses that support the company’s operating segments. Liquidity Ratios - It is better for the times interest earned ratio to be higher because it indicates the company is more than able to pay the interest on their loans on time. Solvency Ratios Effectiveness ratios show how effective the company is managing its assets and how well a firm uses them to generate sales with the right assets on hand. Effectiveness
Ratios Products and Top Competitors Strategies Starbucks is in the Coffee and Tea Manufacturing Industry
Industry has 226 firms STARBUCKS ANNUAL REPORT PRESENTATION By: Maribel Bolanos, Susana Chou-Wong, Elizabeth Trujillo, Shan-Mian Katie Yang, and Leilyan Haghnazarian Introduction Ratio Analysis Conclusions Starbucks works directly with the suppliers of Arabica coffee beans from around the world by eliminating the trading companies and exporters in the supplying process. Has several brands within the company
These brands include:
Starbucks Coffee, Tazo Tea, Seattle’s Best Coffee,
Starbucks VIA Ready Brew, and Frappuccino.
Key products and services include:
Merchandise such as coffee and tea brewing equipment, Handcrafted beverages such as, fresh-brewed coffee, Frappuccino coffee, smoothies, and Tazo teas.
Sell a variety of fresh food products daily such as, baked pastries and sandwiches. Contracts with companies to license the Starbucks trademark and manufacture their branded products to grocery stores, foodservice accounts, and licensed stores.

In 2011, 1% of total revenues were due to licensing agreements of their products.

Top competitors: Profitability ratios use different measures to indicate a company’s ability to generate profit and indicate the company’s overall performance and efficiency. Profitability Ratios Profitability Ratios % change 73.71%


72.44%


17.05%


-2.18% % change -38.40%

-29.41%

41.67%

121.75%

-54.90%

-0.08%

0.09%

9.95% (in days) (in days) (in days) (in days) % change 67.86%

2.82%

20.61% % change -16.72%

-69.13%

-28.72%

366.60% Starbucks strategies and expectations for the future show promising results.Their ratios show that these strategies have helped them be successful Profitability
Ratios Global expansion strategy Continuous product innovation strategy Effectiveness
Ratios Channel development strategy can lead to:
- overstocking
-higher inventory holding costs
- less asset and inventory turnovers Liquidity
&
Solvency Ratios Future plan of remodeling Starbucks stores and hiring more employees Open new stores worldwide Reduce product recalls
many recalls for items ranging from water bottles & coffee blade grinders to foods like chipotle chicken wraps.
Starbucks is trying to focus on too many different products at the same time. Prices of coffee will increase Take into account the lower supply of raw materials and the rising prices of these
lower supply of coffee
low harvest in Brazil
heavy rainfalls affected Colombia We believe that Starbucks strategies and plans for the future are appropriate and we have high hopes that they will be successful next year.
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