Starbucks Case Accounting
Starbucks Case
Part I – Prior to reading Starbuck’s Form 10-K, please answer the following questions. Your answers should be based upon your general knowledge of Starbucks, gained from visiting their stores, purchasing their products and/or observing them in the marketplace.
a. Up until the economic downturn (Fall of 2008) what do you believe was Starbucks’ growth strategy? Give three examples of specific actions (growth initiatives) you observed Starbucks execute upon as part of their growth strategy?
1. Saturate the U.S. market: Based on our observations, it seemed that Starbuck’s primary strategy for growth was to saturate the U.S. market. At one point there seemed to be a Starbucks at every corner, sometimes so close that one had to wonder why in the heck they were opening stores within a couple dozen feet from each other.
2. Expand internationally: We presume that one of their growth goals was to expand abroad, specially if they began to realize they were cannibalizing their own established stores, so they likely had to go outside of the U.S. to keep up their growth targets.
3. Develop complementary products/alternative revenue sources: We also think that around 2006-2007 was when they started to promote downloadable music and also began to sell CDs & books in stores; which means they began to more aggressively add alternative revenue channels, beyond that of coffee/drinks, to their many locations. (Personally, I purchased a bottle of Starbucks coffee liqueur around that time, which I still have because it’s not as good as other coffee liqueurs such as Kahlua.
b. How do you believe Starbucks measured their success in executing their growth strategy? Give four specific measures you might use to evaluate the success of Starbucks’ growth strategy.
Very likely that they were measuring it against number of new stores opened, and sales growth.
We would probably use the following to evaluate the success of Starbuck’s growth
Part I – Prior to reading Starbuck’s Form 10-K, please answer the following questions. Your answers should be based upon your general knowledge of Starbucks, gained from visiting their stores, purchasing their products and/or observing them in the marketplace.
a. Up until the economic downturn (Fall of 2008) what do you believe was Starbucks’ growth strategy? Give three examples of specific actions (growth initiatives) you observed Starbucks execute upon as part of their growth strategy?
1. Saturate the U.S. market: Based on our observations, it seemed that Starbuck’s primary strategy for growth was to saturate the U.S. market. At one point there seemed to be a Starbucks at every corner, sometimes so close that one had to wonder why in the heck they were opening stores within a couple dozen feet from each other.
2. Expand internationally: We presume that one of their growth goals was to expand abroad, specially if they began to realize they were cannibalizing their own established stores, so they likely had to go outside of the U.S. to keep up their growth targets.
3. Develop complementary products/alternative revenue sources: We also think that around 2006-2007 was when they started to promote downloadable music and also began to sell CDs & books in stores; which means they began to more aggressively add alternative revenue channels, beyond that of coffee/drinks, to their many locations. (Personally, I purchased a bottle of Starbucks coffee liqueur around that time, which I still have because it’s not as good as other coffee liqueurs such as Kahlua.
b. How do you believe Starbucks measured their success in executing their growth strategy? Give four specific measures you might use to evaluate the success of Starbucks’ growth strategy.
Very likely that they were measuring it against number of new stores opened, and sales growth.
We would probably use the following to evaluate the success of Starbuck’s growth