Risk Analysis of Starbucks and Dunkin Brands

Topics: Risk, Dunkin' Donuts, Coffee Pages: 18 (5360 words) Published: October 10, 2012

Table of Contents

1. Starbucks

1.1Business and Industry Risk factors. 3
1.2Financial Risk factors.3
1.3Economic Risk factors. 4
1.4Political Risk factors.4
1.5Global/International Risk factors.4
1.6Management Risk factors.5
1.7Technology Risk factors.5
1.8Operation Risk factors.5

2. Dunkin Brands

2.1Business and Industry Risk factors. 5
2.2Financial Risk factors.6
2.3Economic Risk factors.8
2.4Political Risk factors.8
2.5Global/International Risk factors.8
2.6Management Risk factors.9
2.7Technology Risk factors.9
2.8Operation Risk factors.9

3. Conclusion10

4. Bibliography12


1.1 Business and Industry Risk factors.

In the general course of SB business, investors interested in holding shares in SB should carefully consider the risks described below. If any of the risks and uncertainties described in the cautionary factors described below actually occurs, business, financial condition and results of operations could be materially and adversely affected. The risks and factors listed below, however, are not exhaustive. Other sections of their 10-K include additional factors that could materially and adversely impact business, financial condition and results of operations. Moreover, they operate in a very competitive and rapidly changing environment. New factors emerge from time to time and it is not possible to predict the impact of all these factors on business, financial condition or results of operation. Moreover, many of the foregoing risks are particularly acute in developing countries, which are important to their long-term growth prospects. II

Increases in the cost of high-quality Arabica coffee beans or other commodities, decreases in the availability of high quality Arabica coffee beans or other commodities could have an adverse impact on their business and financial results. •Success depends substantially on the value of their brands. •Their business depends largely on the success of their business partners and suppliers, and their brand and reputation may be harmed by actions taken by third parties that are outside of their control. •Failure to meet market expectations for their financial performance will likely adversely affect the market price and volatility of their stock. •The loss of key personnel or difficulties recruiting and retaining qualified personnel could adversely impact their business and financial results. Adverse public or medical opinions about the health effects of consuming their products, as well as reports of incidents involving food-borne illnesses, food tampering or food contamination, whether or not accurate, could harm their business. •A regional or global health pandemic could severely affect their business. •Effectively managing growth both in retail store business and global consumer products business is challenging and places significant strain on their management and employees and operational, financial, and other resources. •They rely heavily on information technology in operations, and any material failure, inadequacy, interruption or security failure of that technology could harm their ability to effectively operate business. II

1.2 Financial Risk factors.

Starbucks’ operating results have been in the past and will continue to be subject to a number of factors, many of which are largely outside their control. Any one or more of the factors set forth below could adversely impact their business, financial condition and/or results of operations:

Lower customer traffic or average value per transaction, which negatively impacts comparable store sales, net revenues, operating income, operating margins and earnings per share, due to:

The impact of initiatives by competitors and increased competition generally; •Customers trading down to lower priced products within Starbucks, and/or shifting to...
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