Starbucks Corporation (Coursework Sample)

Starbucks Corporation
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Starbucks Corporation
Executive Summary
Starbucks Corporation is an American company headquartered in Seattle, Washington. Kevin Johnson is the Current Chief Executive Officer (CEO) overseeing the company's business strategies and daily operations. Starbucks ' operations include; running snack shops, ice cream and soft-serve shops, frozen yogurt shops, coffee shops, cookie shops, juice and smoothie shops, pretzel shops, and Cupcake shops. Customers can purchase and consume on-site, take to go, or request delivery. Starbucks operates under the coffee & snack shop industry. Its main products include; Food consumed in-store, beverages consumed in-store, Food taken to-go, Beverages taken to-go, Food ordered via drive-through, and others.
Starbuck operates in a challenging environment. Sales have been dismal since the onset of the pandemic. In 2020, the company recorded an 11 percent decline in sales (Appendix A). However, heading to the first half of 2021, the CEO is very upbeat about sales recovery and sees a promising future for the company. Sales have been sluggish, especially in the international markets. Starbuck's board of directors would like to see an overall improvement in the company's performance. The committee would like to see measurable and rapid actions to return sales to pre-COVID levels, improve operations, and enhance corporate social responsibility efforts. The following recommendations were outlined
Recommendations:
1 Focus on locations significantly affected by the pandemic. Sales from the Americas segment, which include countries like the United States and Canada, accounted for 70 percent of the total sales, while the international segment that includes China, Japan, Asia Pacific, Europe, Middle East, and Africa accounted for 22 percent of the total net sales (Starbucks Corporation, 2020). Company-operated stores accounted for 81 percent of total net revenue. The United States was the most affected country by the coronavirus pandemic compared to other countries worldwide (Duddu, 2020). Before the pandemic, the fastest-growing segment in the industry was independent coffee shops that focused on coffee connoisseurs with high-quality espresso and siphoned and filtered coffee beverages (Le, 2021). Therefore, many of these independent shops were expected to close shop because they depended on regular eight-to-five employees who frequented offices and could no longer visit these establishments due to stay-at-home orders. With the resumption of normality and lifting of travel restrictions, these locations are likely to be underserved, presenting significant opportunities for Starbucks to open new outlets or take over the existing ones that fell into financial distress. With more outlets, the company will be able to grow its sales.
2 Support employees and encourage customers to get vaccinated. The management should encourage staff to get the vaccination by giving them paid-off days. A promotional drive like gift vouchers for vaccinated customers will encourage others to get vaccinated. Besides, the company should redesign their spaces to make them safe and aesthetically pleasing to attract customers. These initiatives go a long way in supporting corporate social responsibility efforts of making their establishment safe, especially in countries like China where vaccination uptake has been sluggish.
3 Targeted marketing. Adults between 18 and 30 years spend more of their food budget eating out than any other age group (Le,2021). Often, people who earn over $100,000 have full-time jobs and rarely have time to cook and spend an average of &6,573 on Food and beverages outside the home. While consumers who earn between $30,000 to $99,999 account for 32 percent of revenue in the coffee & snack shop industry who spend less on luxury items but enjoy middle-range products (Le,2021). The 6 trillion U.S. budget is expected to create more jobs and grow the economy by 6 percent (Tankersley, 2021), which is forecasted to inspire consumer confidence, fueling consumer spending.
4 Expand the menu. The company should redesign its menu and develop more options to attract customers. Customers continue to pursue healthy lifestyles and may require healthy alternatives on the menu (Le, 2021), thus, providing a growth opportunity for the company. Furthermore, expanding their current product lines by providing various other menu options, including premium coffees and breakfast items, can help improve sales.
5 More pick-only stores, drive-through stores, and delivery services. In the United States, before the COVID-19 pandemic, 80 percent of the transaction of company-operated stores accounted for 'on-the-go experience (Starbucks Corporation, 2020). The use of the mobile app to make orders and payments in advance, coupled with a contactless pick-up experience, has enhanced customer experience and allowed labor and production efficiency. With the increased roll-out of these efficient technologies in other countries/locations like China, the company's operation will be more seamless, thus guarantying long-term growth for the company.
References
Duddu, P. (2021). COVID-19 coronavirus: Top ten most-affected countries. Pharmaceutical-technology.com. Retrieved 24 June 2021, from https://www.pharmaceutical-technology.com/features/covid-19-coronavirus-top-ten-most-affected-countries/.
Le, T. (2021). Coffee & Snack Shops in the U.S. Ibisworld. Retrieved 24 June 2021, from.
Starbucks Corporation. (2020). StarbucksCorporation 2020 Annual Report.
Tankersley, J. (2021). Biden to Propose $6 Trillion Budget to Make U.S. More Competitive. Nytimes.com. Retrieved 24 June 2021, from https://www.nytimes.com/2021/05/27/business/economy/biden-plan.html.
Appendix
Appendix A

STARBUCKS CORPORATION





Financial Analysis Fiscal 2016-2020




Numbers in Thousands, except where indicated








 

2016

2017

2018

2019

2020

 

 

 

 

 

 

INCOME STATEMENT












Total Revenues ($ actual)

$21,315,900,000

$22,386,800,000

$24,719,500,000

$26,508,600,000

$23,518,000,000

Total Revenues (in thousands)

$21,315,900

$22,386,800

$24,719,500

$26,508,600

$23,518,000

Total Revenues (in millions)

$21,316

$22,387

$24,720

$26,509

$23,518

Total Revenues (in billions)

$21.32

$22.39

$24.72

$26.51

$23.52

Total Revenues 1 Year Growth

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5.02%

10.42%

7.2