Mgmt 495 Week 5 Case Study Starbucks
Cory Gump
MGMT 495
Case Study: Starbucks
August 7, 2007
Before Howard Schultz joined Starbucks, they were a small company in the market of selling fine quality coffee beans. Howard Schultz's strategic vision was to modify the format of Starbucks' stores, incorporating an American version of the coffee bar culture. His vision was met with great initial resistance by Starbucks' management, which was eventually quelled by strong sales performances. Also included in Schultz's strategic vision for a new Starbucks was a plan for massive expansion. Before Schultz implemented his vision of expansion he wanted to make sure his employees were devoted to the Starbucks brand. Schultz developed a strategy to make Starbucks a great place to work. By adding employee health benefits, a stock option plan, a stock purchase plan, and improving the overall workplace environment, Schultz executed his strategy for employee satisfaction. In the early 90's Schultz shifted his strategic vision again, this time towards store expansion. Starbucks' …show more content…
Starbucks has experienced a consistent earnings growth over this period. Starbucks has also managed to decrease long-term debt over the period also, which indicates less risk of going into bankruptcy. The most recent year on the financial statement raises some red flags. Starbucks' Current assets to current liabilities ratio is considerably low at a mere .986. Current liabilities have risen above current assets which means that Starbucks may be paying its bills more slowly and borrowing more from the bank. There is a chance that this low ratio is due to low inventories, which would cause the current assets to be low. This could mean one of two things: Starbucks is implementing an efficient JIT inventory system, or that the firm is missing shipments and losing sales. Since inventories is not listed in the book this would be hard to
MGMT 495
Case Study: Starbucks
August 7, 2007
Before Howard Schultz joined Starbucks, they were a small company in the market of selling fine quality coffee beans. Howard Schultz's strategic vision was to modify the format of Starbucks' stores, incorporating an American version of the coffee bar culture. His vision was met with great initial resistance by Starbucks' management, which was eventually quelled by strong sales performances. Also included in Schultz's strategic vision for a new Starbucks was a plan for massive expansion. Before Schultz implemented his vision of expansion he wanted to make sure his employees were devoted to the Starbucks brand. Schultz developed a strategy to make Starbucks a great place to work. By adding employee health benefits, a stock option plan, a stock purchase plan, and improving the overall workplace environment, Schultz executed his strategy for employee satisfaction. In the early 90's Schultz shifted his strategic vision again, this time towards store expansion. Starbucks' …show more content…
Starbucks has experienced a consistent earnings growth over this period. Starbucks has also managed to decrease long-term debt over the period also, which indicates less risk of going into bankruptcy. The most recent year on the financial statement raises some red flags. Starbucks' Current assets to current liabilities ratio is considerably low at a mere .986. Current liabilities have risen above current assets which means that Starbucks may be paying its bills more slowly and borrowing more from the bank. There is a chance that this low ratio is due to low inventories, which would cause the current assets to be low. This could mean one of two things: Starbucks is implementing an efficient JIT inventory system, or that the firm is missing shipments and losing sales. Since inventories is not listed in the book this would be hard to