Student Audit Example Starbucks

Topics: Coffee, Corporate governance, Board of directors Pages: 50 (12469 words) Published: November 10, 2014
Running head: STRATEGIC AUDIT OF STARBUCKS CORP

®
STRATEGIC AUDIT OF STARBUCKS CORPORATION
Wilmer Ochoa
Embry-Riddle Aeronautical University
Prof. Dr. Karen Chapman
Strategic Management - MGMT 436
October 4, 2014

STRATEGIC AUDIT OF STARBUCKS CORP

1

Table of Contents
I - EXECUTIVE SUMMARY

2

II - CURRENT SITUATION

3

Mission statement analysis

6

III - CORPORATE GOVERNANCE
Board of Directors
IV - EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREATS

7
8
16

Societal environment

16

Task environment

16

EFAS analysis

18

V - INTERNAL ENVIRONMENT: STRENGTHS AND WEAKNESSES

19

Financial analysis

22

Common-size statements

34

Financial Ratio Analysis

36

IFAS analysis

36

VI - ANALYSIS OF STRATEGIC FACTORS (SWOT)

37

Mission Statement

37

SFAS analysis

37

VII - STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGY (TOWS) TOWS analysis
VIII - IMPLEMENTATION OF RECOMMENDED STRATEGY

40
43
44

Programs needed

44

Financial feasibility

45

IX – CONCLUSIONS

46

References

47

STRATEGIC AUDIT OF STARBUCKS CORP

2

I - EXECUTIVE SUMMARY
Starbucks Corporation is an American company specializing in the coffee retail business. According to co-founder, Howard Shultz, “Starbucks is the premier purveyor of the finest coffee in the world, with more than 20,000 stores in 65 countries” (News.starbucks.com, 2014, para 2). It was founded in 1971 and is a major player in the specialty coffee industry globally. This strategic audit aims at analyzing the company’s strategic plans, together with its financial stability. The research collected in this report includes analysis of Starbucks’s business documents; year-end financial statements, its strategic plans, corporate governance principles, documented corporate meeting minutes with its shareholders, and other vital business operations data available in its corporate web site. This report includes charts and tables that allow for a closer inspection and analysis of key business data. The results of the strategic audit prove Starbucks’s successful business model is positioned to do very well in the future, while continuing to be the dominant global coffee retailer it currently is. While its history is a successful one, this analysis discovers some areas of concern which need to be closely monitored in order for Starbucks to continue its global growth trend.

This strategic analysis report finds that Starbucks Corporation is staying on course to achieving yet another successful year. However, it further highlights some areas of concern and suggests caution with regards to Starbucks’s recent global expansion direction. These areas are: Slow in Research and Development (R&D) technologies to connect and enhance customer experience globally.

Its brand is weak in markets other than United States. This can be due to its main focus of expanding its brand domestically in the U.S.
Growing market segment of coffee substitute beverages.

STRATEGIC AUDIT OF STARBUCKS CORP

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Differing manufacturing processes and farm grower’s quality of bean, coffee, and tea products differ depending on the soil, environment, locality, and competency in the region being produced. Producing identical proprietary blends is a challenge. Differing government policies and restrictions on import/ exports cause slowdowns in channel distribution methods.

Online premium blend coffee roaster retailer’s growing presence is replacing in-store experience.
Branded competition growth in markets other than the United States. Limited high traffic retail locations due to increasing number of coffee bar retailer entrants.
Increasing real estate market lease rates in exclusive established locations infringing on profits.
Increasing global coffee consumption causing shortage on coffee bean availability. Newly established logistical support for its supply chain channels needed for global location expansions.
II -...

References: AboutMcDonalds.com. (2014). Our Company Leadership Team. Retrieved from McDonalds Corporate
Web Site: http://www.aboutmcdonalds.com/mcd/our_company/leadership.html
Equilar.com. (2014). Craig E. Weatherup - Executive Bio, Compensation History and Contacts. Retrieved
from Equilar Atlas Web Site: http://people.equilar.com/bio/myron-ullman-j.c./salary/564060#.U_oxE3HD85t
Equilar.com. (2014). Javier G. Teruel - Executive Bio, Compensation History and Contacts. Retrieved from
Equilar Atlas Web Site: http://people.equilar.com/bio/javier-teruel-spectrondesarrollo/salary/39234#.U_oxKHHD85t
Equilar.com. (2014). Joshua C. Ramo - Executive Bio, Compensation History and Contacts. Retrieved from
Equilar Atlas Web Site: http://people.equilar.com/bio/joshua-ramo-starbuckscorporation/salary/591098#.U_oylXHD85t
Equilar.com. (2014). Mellody L. Hobson - Executive Bio, Compensation History and Contacts. Retrieved
from Equilar Atlas Web Site: http://people.equilar.com/bio/mellody-hobson-dreamworksanimation/salary/709836#.U_opeGNNQeE
Equilar.com. (2014). Myson E. Ullman III - Executive Bio, Compensation History and Contact. Retrieved
from Equilar Atlas Web Site: http://people.equilar.com/bio/myron-ullman-j.c./salary/564060#.U_oxE3HD85t
Ethisphere.com. (2014). 2014 World 's Most Ethical Companies; Retail: Specialty. Retrieved from
Ethisphere Web Site: http://ethisphere.com/worlds-most-ethical/wme-honorees/
Fool.com. (2014). Starbucks Continues to Blow Away the Competition. Retrieved from Fool Web Site:
http://www.fool.com/investing/general/2014/05/02/starbucks-continues-to-blow-away-thecompetition.aspx
Globalassets.starbucks.com. (2014). Business Ethics and Compliance; Standards of Business Conduct.
News.dunkinbrands.com. (2014). Leadership. Retrieved from Dunkin Brands Corporate Web Site:
http://news.dunkinbrands.com/content/default.aspx?NewsAreaId=1
News.starbucks.com. (2014). Executive Team; Howard Shultz. Retrieved from Starbucks Corporate Web
Site: http://news.starbucks.com/leadership/howard-schultz
News.starbucks.com. (2014). Executive Team; Trioy Alstead. Retrieved from Starbucks Corporate Web
Site: http://news.starbucks.com/leadership/troy-alstead
News.Starbucks.com. (2014). The Program that Turned Employees Into Partners Continues to Change
Lives
Peets.com. (2014). Company Information. Retrieved from Peets Web Site:
http://www.peets.com/about-us/company-info
Pepsico.com. (2014). Our Leadership. Retrieved from Pepsi Co. Corporate Web Site:
http://www.peets.com/about-us/company-info
Phx.corporate-ir.net. (2013). Starbucks at Jeffries Global Consumer Presentation. Retrieved from
Starbucks Web Site: http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9NTA5MjYxfENoaWxkSUQ9NTUxNjUwfFR5cGU9MQ==
Starbucks Corporation. (2009, November 20). Starbucks Corporation Fiscal 2009 Annual Report.
Starbucks Corporation. (2013, November 18). Starbucks Fiscal 2013 Annual Report - FINAL. Retrieved
from Starbucks Corporate Web Site: http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9MjE4MDQyfENoaWxkSUQ9LTF8VHlwZT0z&t=1
Starbucks.com. (2013, November 5). Starbucks Corporation - Corporate Governance Principles and
Practices For The Board of Directors
Starbucks.com. (2014). Diversity and Inclusion; What We 're Doing Now. Retrieved from Starbucks
Corporate Web Site: http://www.starbucks.com/responsibility/community/diversity-andinclusion
Starbucks.com. (2014). Ethical Sourcing; Our success is linked to the success of the farmers and suppliers
who grow and produce our products
Starbucks.com. (2014). Starbucks Corporation - Board of Directors. Retrieved from Starbucks Corporate
Web Site: http://globalassets.starbucks.com/assets/5255711afa59494db525d2a070b7fc63.pdf
Starbucks.com. (2014). Starbucks Corporation - Board of Directors and Board Committee List, as of
March 18, 2014
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