Strategic Initiative

Topics: Strategic management, Golf Digest, Golf Pages: 5 (1621 words) Published: March 17, 2014


Strategic Initiative
FIN/370 R7
March 3, 2014

Strategic Initiative
A successful business must be able to plan and forecast all aspects of operations, including both financial and operational goals, in both the long and short terms. Even though businesses may be temporarily successful if focused only on immediate decisions, in the long term they will not grow successfully and they stand a much higher chance of failure due to a lack of direction. Strategic planning refers to a company’s developed long-term operational strategy that will be used to balance both financial and operations decisions over a period of five to ten years. Financial planning is a key and integral part of strategic planning. Companies that create successful financial plans have set benchmarks and goals that define success. They are also able to weigh the cost of modifying or sustaining various parts of their business over the course of the strategic plan, shown below in the case of Starbucks venture into the golfing realm. Strategic Planning Initiative

Starbucks has launched an initiative to expand into the 2013 top 100 golf course's located on www.golfdigest.com. Over the next few months Starbucks will work with a consulting firm to determine proper space and location in the vicinity of the 9th hole on these courses and will then begin construction. One year after launch of these walk-ups, Starbucks will assess profitability and will evaluate the possibility of further expansion. The goal is to increase sales by offering product in a location that is convenient to those playing either nine or 18 holes of golf. According to Starbucks (2013), the following are a couple of the initiatives listed in their annual report: “Successfully leveraging the Starbucks brand portfolio outside the company-operated store base, including an increased focus on international licensed stores. Focusing on relevant product innovation and profitable new growth platforms, including retail tea and achieving customer acceptance of these new products and platforms while maintaining demand for our current offerings” (p. 18). Effects of Initiative and Associated Risks

There are some factors that may affect the initiatives listed, and in turn adversely impact the company’s finances that includes an increase in construction costs related to opening new stores as well as the remodeling of the existing stores; A delay in opening a store for one or more reasons that are out of our control or not being able to locate storefronts in good locations with marketable rates, that would change the established dates for grand openings in the United States and abroad; customers could reject a new product or based on the price increase that is needed to cover the production and input costs. Additionally, “the degree to which we enter into, maintain, develop and are able to negotiate appropriate terms and conditions of, and enforce, commercial and other agreements; not successfully consummating favorable strategic transactions or integrating acquired businesses; or the deterioration in our credit ratings, which could limit the availability of additional financing and increase the cost of obtaining financing to fund our initiatives” (Starbucks 2013). Additionally, some factors that will determine how successful the company will be as determined by Europe, Middle East and Africa (EMEA) and CAP segments that are not the same as those affecting stores in the United States. Consumers’ tastes naturally are different in every region, and consumers in some Market Business Units (MBU) may not like the exact same product that is offered in the United States or a different international market.

Associated risks from licensees and business partners could negatively impact Starbucks financial results, especially internationally. To strategically plan for negative results, Starbucks provides training, support and monitoring of operations for certain business...

References: "Annual Reports." Investor Overview. N.p., n.d. Retrieved from
Http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-reportsAnnual, pg. 18, 2013
"2013-14 Ranking: America 's 100 Greatest Public CoursesThe Game 's Oldest Ranking, Established in 1966Single Page | Methodology | By The Numbers | America 's 100 Greatest Golf Courses | Best In State." Golf Digest. N.p., n.d. Web. 02 Mar. 2014. Retrieved from http://www.golfdigest.com/golf-courses/2013-02/100-greatest-public- courses
Golf Digest. (2013). 2013-14 Ranking: America 's 100 Greatest Golf Courses. Golf Digest.
Retrieved February 28, 2014 from http://www.golfdigest.com/golf-courses/2013-02/americas-100-greatest-golf-courses-ranking.
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