Starbucks Financial Statement Analysis
The intent of this paper is to research and analyze the financial statement of Starbucks, a locally originated (yet global) publicly traded, Pacific Northwest Company. Resources used are the 2010 10-K, the DataMonitor company profile, Mint Global, and the NetAdvantage Corporate Social Responsibility reports, as well as several cited online resources. Company Overview
Starbucks Corporation originated as a single store in the Pacific Northwest – downtown Seattle, WA in Pike’s Place Market over 40 years ago. The company started in 1971; the corporation was formed 1985. The Starbucks Mission Statement follows: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Starbucks purchases and roasts high quality whole coffee beans, creates handcrafted coffee and tea beverages, offers pastries and treat food items, and serves them passionately via a rewarding customer ‘experience’ of coffee, tradition, and a feeling of connection. Also available for purchase in-store are merchandise products centered on espresso and coffee, packaged goods, music, books, and gift items. In 1983 Howard Schultz (Starbucks chairman, president, and CEO) pursued his vision to bring the Italian coffeehouse tradition to the United States; a place for the neighborhood to gather for conversation and a sense of community. Today Starbucks stores have grown to 15,000 in 50 countries, and Starbucks is the premier roaster and retailer of specialty coffee in the world. Starbucks is attempting to stand as the most recognized and respected brands in the world. The company operates via a few channels: company-operated retail stores, licensed retail stores (specialty operations), and licensing of its trademark. There are three reportable operating segments: United States (US)
Global Consumer Products Group (CPG)
The US and International segments both include company-operated retail stores and certain components of specialty operations. Specialty operations within the US include licensed retail stores. International specialty operations include retail store licensing operations in nearly 40 countries and foodservice accounts in Canada and the United Kingdom (Starbucks Corporation, 2010). The CPG segment includes packaged coffee and tea, Starbucks VIA® Ready Brew and other branded products sold worldwide through channels such as grocery stores, warehouse clubs and convenience stores, and US foodservice accounts. CPG operates a significant portion of its business through licensing arrangements and a joint venture with a large consumer products business partner (Starbucks Corporation, 2010). Competition
With respect to coffee beverage sales, Starbucks competes with quick-service restaurants (QSR’s) and specialty coffee shops such as Tully’s and Caribou Coffee. They also experience direct competition from large competitors such as McDonalds and Dunkin’ Donuts. The packaged coffees and teas compete directly against other specialty coffees and teas (such as Peet’s, Dunkin’ Donuts, Millstone) sold through supermarkets, club stores, and specialty retailers (Starbucks Corporation, 2010). The company also has to compete against restaurants and other specialty retailers for prime retail locations and qualified personnel to operate the stores. Following is some chart comparison information: [pic]
Corporate Social Responsibility Report
Starbucks has been one of the leaders in being a socially responsible company. It is involved in local charities focusing on children, the environment, arts, and AIDS research, and providing coffee donations to homeless shelters in the state where their stores are located. It has formed alliances to distribute books through annual drives and it has given away over...