Conley Case2 Starbucks
Starbucks Corporation, April 2012
402416223 國際經管一 Conley 林昀則
What do I see on the Table 1?
On the Table 1, first I saw the “restructuring changes”. This item only showed from 2008 to 2010. After Starbuck restructured, their significantly increased. It means their restructure policy was successful. From 2010 to 2011, the “other operating expenses” increased approximately one hundred. Likewise, the “operating income” also increased double too. In addition, I also found out the “working capital (deficit)” and shareholders’ equity huge increased. On the store information, the percentage change in same store sales from 2008 to 2009 is almost negative. It means that was the tough time for Starbucks. Finally, in the U.S. the “company-stores” and “licensed stores” from2010 to 2011 negatively changed. But the “international stores” was totally different.
What’s the relationship between market share and profits?
Market share is the percentage of a market which defined in terms of either units or revenue accounted for by a specific entity. Market share is an important factor to check the level of competition in the market. In my opinion, market share means the power which can control the market. The higher market share, the bigger control power. Usually, the higher of market share, the bigger sales of its products. At the same time, owing to economies of scale, increase market share may also reduce the cost per unit of product, and increase profitability. Expanding the market share of company, it can get the monopoly. This monopoly can both bring about the profits and maintain a certain extent competitive advantage.
But the company's market share is not always positively correlated with profitability. Sometimes, the company is pursuing the means to increase market share but would lower the profit margins. For instance, on price promotions policy, decrease the short-term profits, but may not improve the customers' loyalty. Expand