...the last 25 years has been phenomenal. FDI can take the form of a foreign firm buying a firm in a different country, or deciding to invest in a different country by building operations there. With FDI, a firm has a significant ownership in a foreign operation and the potential to affect managerial decisions of the operation. The goal of our coverage of FDI is to understand the pattern of FDI that occurs between countries, and why firms undertake FDI and become multinational in their operations as well as why firms undertake FDI rather than simply exporting products or licensing their know-how. The opening case describes the international growth of Starbucks. The closing case explores Cemex’s foreign investments. OUTLINE OF CHAPTER 7: FOREIGN DIRECT INVESTMENT Opening Case: Starbucks’ Foreign Direct Investment Introduction Foreign Direct Investment in the World Economy Trends in FDI The Direction of FDI The Form of FDI: Acquisitions versus Greenfield Investments The Shift to Services Country Focus: Foreign Direct Investment in China Theories of Foreign Direct Investment Why Foreign Direct Investment? The Pattern of Foreign...
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...Schultz reports he stated that the previous fiscal year 2010 Starbuck’s revenue increased to a record breaking 10.7 billion dollars; Starbuck’s operating income increased by 857 million dollars from fiscal in 2009 to 1.4 billion dollars. Starbucks full year margin of 13.3 percent represented the highest full year consolidated margin in Starbuck’s history (Schultz, 2011). Mr. Schultz stated that while driving Starbuck’s key financial metrics cause it to reach the company’s record levels. In fiscal 2010, we built upon the nearly $600 million of cost savings in fiscal 2009 while driving many of the key financial metrics to record levels (Schultz, 2011). Starbucks improved the effectiveness and efficiency of their supply chain in world-class levels. In the U.S. alone, the business, operating income and revenues are growing again, with their store partners elevating the Starbuck’s Experience. Internationally, the foundation of the Starbuck’s brand still remains consistent in 2010 the ideas and leaderships in local markets helped deliver record breaking financial performance, which set the international business up to be a profitable growth engine (Schultz, 2011). Starbucks offered significant cash award to eligible partners who contributed to Starbucks high performance in 2010, and was able to enhance the 401k plan program, as well. 2.) Assess the Mission Statement of the company in terms of how it aligns with what the company actually does....
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...Starbucks Financial Analysis Table of Contents History 3 Overview 3 Strategy 3 S.W.O.T. 4 Starbucks Ratios 5 Balance Sheet Analysis 5 Profitability Ratios 8 Activity Ratios 9 Investment Returns 9 Comparative Analysis 10 Profitability 10 Management Effectiveness 10 Valuation Measures 10 Share statistics 10 Stock Price History 11 Dividends & Splits 11 Balance Sheet Ratios 11 Conclusion 11 References 12 Electronic Sources 12 Bibliographic Sources 12 Appendix 13 History The first Starbucks affiliate opened in 1971 in Seattle. The company focused on selling roasted gourmet coffee beans and coffee accessories. The name originates from a character in the novel Moby Dick from Herman Melville. In 1982 Howard Schultz joined the foundation-team of Jerry Baldwin, Zev Siegel and Gordon Bowker as the Director of Retail Operations and Marketing. Inspired by his personal experiences of Italy´s coffee tradition, Schultz proposed to change the company´s strategy and create a coffee chain where customers enjoy their coffee and meet friends. His idea was to transform the coffee shop to be a central meeting and socializing point. As Schultz was not able to convince the founders to switch the company into a concept coffee shop he started his own coffee shop, Il Giornale. Due to his success with his own coffee shop and the support of local investors, he was able to acquire Starbucks in 1987 from its founders. Schultz overtook the name and started a progressive...
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...Head: STARBUCKS DELIVERY Starbucks Delivery Public Relations Campaign Anderson, J., McBride, T., Sandoval, M., & Waugh, J. University of Phoenix MKT/438 Public Relations Candice Steelman Starbucks Delivery Public Relations Campaign Introduction In such a competitive world it’s often crucial for a business to offer new services or products to keep the customer coming back. Starbucks is no different from any other business in the same industry. The need to to keep the market fresh is always there. Starbucks will introduce a new service of home or business deliver of there products. Before this product is introduced in the marketplace, areas such as business goals, public relations (PR) issues, use of SMART, identifying the targeted market, other publics that must be identified, ethical implications related to the PR issues, and a complete market research plan must be completed. With all these above areas identified and completed the chances of the new services success rate will go up. Business Goals After opening the first store in 1971, Starbucks Coffee Company has grown from a local Seattle market coffee and tea shop into an international phenomenon with more than 11,000 stores in all 50 of the United States and more than 4,400 in 43 other countries. Starbucks (2008) mission is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow” (Mission Statement, para. 3). Starbucks recently...
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...Financial Elements Sales for Starbucks have taken a precipitous drop in 2007 and 2008 and leveled off in 2009. This seems somewhat on par with what every company was seeing in those years. Starbucks was particularly impacted because it is viewed as a luxury item. Luxury items were the first to go during a market downturn because they are easy to drop from your routine. It is why Starbucks was interested in lower priced, lower margin products at the time. Starbucks stores are currently owned in two separate ways; Starbucks Corporation owned and licensed stores. There are currently Stores are owned my Starbucks Corporation and private franchisees. There are currently 8832 stores owned by Starbucks and 7803 owned licensed stores. This is including the 1,800 stores that Starbucks had to close due to market turmoil. Starbucks Corporation owns a majority of the U.S. based market where as licensees make up a majority of the foreign market. Current expansion plans for Starbucks are innovation and leveraging and expansion of current products and sales channels. This includes the Starbucks VIA ready brew coffee. During the market crash in 2007 leading into 2008 Starbucks had a drastic cutback in creating new stores. This is expected because at the time they had no reason to expand due to poor financial positioning. To get through this time of “need” Starbucks Issued commercial paper or short term debt. This money was to keep them afloat until sales picked back up. Also...
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...guide their actions. The coffee industry has boomed in recent years. While fast food chains are growing at a rate of 2% each year, coffee shop chains grow more than 10% annually. According to the National Coffee Association Annual Drinking Trends Survey, “Even though 75% of the cups of coffee brewed daily are consumed at home, 66% of Americans buy their coffee outside of their homes.” This creates a strong demand in the coffeehouse market. Statista defines coffeehouses as “small establishments selling prepared coffee, tea, and other hot beverages.” In recent time, many coffeehouses started competing with other restaurants in the limited-service category by offering baked goods, sandwiches, salads, and other snack items. For instance, Starbucks has been battling Dunkin Donuts and McDonald’s for the top position as coffee king. In order to compete, each company has expanded their menu options and...
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...with smaller companies find ways to thrive in those giant’s shadows. Competition in the coffee industry is hard to distinguish at times, but Starbucks is a brand name that stands out on its own. Coffee competitors have done a good job of differentiating themselves by using environments and product mix. Coffee is the second largest U.S. import, and specialty coffee is forecasted to be an $11 billion dollar a year industry. In order to strive in this industry, companies must have the appropriate buildings, properties and equipment. Capital Expenditures are the cash that is used to buy, revamp or upgrade these physical assets. Capital expenditures are forecasted using CapEx % of gross profits and are allocated proportionally to each division based on the gross margin. This paper will compare the capital expenditures of Dunkin Brands and the Starbucks Corporation (Fig.1). Direct Competitor Comparison SBUX DNKN Market Cap: 49.50B 4.42B Employees: 160,000 1,104 Qtrly Rev Growth (yoy): 0.11 0.06 Revenue (ttm): 14.02B 667.67M Gross Margin (ttm): 0.57 0.79 EBITDA (ttm): 2.59B 313.12M Operating Margin (ttm): 0.14 0.39 Net Income (ttm): 1.51B 106.11M EPS (ttm): 1.97 0.94 P/E (ttm): 33.59 44.29 PEG (5 yr expected): 1.61 1.72 P/S (ttm): 3.47 6.61 (Fig.1 Yahoo Finance) One of Starbucks biggest competitors is Dunkin Donuts. Dunkin Brands Inc is a franchise leader in restaurants that owns Dunkin’ Donuts and Baskin-Robbins. Many...
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...STARBUCKSFINANAL 1 STARBUCKS FINANCIAL ANALYSIS Cathy Jo Biddinger Dr. Professor Dana Leland Financial Management March 15, 2013 STARBUCKSFINANAL 2 STARBUCKS FINANCIAL ANALYSIS Searching for a multinational company to invest in there are many factors to consider. While doing research for a company and after much consideration and searching, I have chosen Starbucks Coffee Company. Starbucks is a publically traded company and as a financial analyst and after my research we will be able to make a full detailed decision about whether to invest or to go with another company. Starbucks Corporation is well known around the world as one of the most prestigious places to purchase your coffee. This coffeehouse is the “premier roaster, marketer and retailer of specialty coffee in the world (NASDAQ, 2013). This select coffeehouse has a wide range of high-quality coffees that they purchase. They also sell special handcrafted coffee, tea and other beverages and a selection of food items for each and every customer that is unique to their own individual taste. Starbucks has mapped their objective to be that of the most recognized and respected brands in the world. Starbucks Corporation is internationally known. Their mission is “to inspire and nurture the human spirit – one person; one cup and one neighborhood at a time (Starbucks.com). Millions of people walk through the doors of Starbucks every day. With having over 17,000...
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...Our customers voted us the #1 Best Coffee in the annual Zagat ® survey. 1 4 2 We found a small way to make our Starbucks Cards even more convenient. 3 We made sure our customers will never be without great coffee. AUTHOR STARBUCKS CORPORATION TITLE ANNUAL REPORT YEAR FISCAL 2010 FISCAL 2010 FINANCIAL HIGHLIGHTS Net Revenues (in Billions) Comparable Store Sales Growth (Company-Operated Stores Open 13 Months or Longer) $10.4 $9.4 $10.7 $9.8 7% 7% 5% $7.8 –3% –6% 2006 2007 2008 2009 2010 2006 Operating Income (in Millions) & Operating Margin (in %) GAAP Non-GAAP GAAP Non-GAAP 2007 2008 2009 2010 Operating Income by Segment, Excluding Other United States $1,472* International Global CPG $53 $1,419 $1,054 13.8%* $894 11.5% $894* 18% 13.3% $843* 11.2% $332 $339 15% 9% 12% 73% 8.1%* 4.9% 2006 2007 2008 $562 $504 5.7% 2009 2010 2006 Earnings per Diluted Share GAAP 73% 9.2%* 2010 Operating Cash Flow & Capital Expenditures (in Millions) C ash from Operations Non-GAAP Capital Expenditures $1.28* $1,705 $0.04 $1.24 $0.87 $0.71** $0.71* $1,132 $0.80* $1,389 $1,331 $1,259 $1,080 $985 $0.28 $771 $0.28 $0.52 $446 $441 $0.43 2006 2007 2008 2009 2010 * Non-GAAP measure. Excludes $339, $332 and $53 million in pretax restructuring...
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...Panera Bread Company was in an unfamiliar position where taking out debt was a necessary action to gain funding. Raising prices would be an option to help with the deteriorating margins, but there is fear that this move will slow the growth of the company. Other options, such as lowering the quality of food, would go against Panera’s fundamental goal of serving high quality food. At this time, Panera is in a position where it needs to repurchase stock. The $75 million buy-back should help give confidence to their shareholders. However, to accomplish their growth goals and stock repurchase, Panera will require external funding for the first time. Given Panera’s financials from 2003-2007, we forecasted Panera’s income statement and balance sheet for 2008-2012. In our forecasting for the following years for Panera Bread, we started off by deciding what kind of percentage of sales we would take: either the previous year’s percentage or the average of those five years. We decided that if there was a trend in the previous years (2003-2007) percentages, it would make sense to use 2007’s percentage of sales. In this case, a trend would either be a steady increase or decrease as a percentage of sales. If there was no evidence of a trend, we used the average of the previous years to forecast. In the example below, “dough sold” as a percentage of sales, decreased steadily from 2003 to 2007. On the other hand, depreciation fluctuated as a percentage of sales, leading us to use the average...
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...This essay will illustrate the extent to which effective marketing must incorporate Segmentation, Targeting and Positioning. Segmentation, targeting and positioning is a three stage process. Segmentation describes what kinds of customers exist, targeting describe target market which is best to serve and positioning which describe segmentation by categorizing the products or services for that segment. Segmentation is “the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.” Segmentation try to find out what kinds of different consumers with different needs exist. Segmentation depend on? Gender Age Social class Personal Disposable Income Family life cycle Employment status Marital status / living arrangements and many more. Segmenting consumer markets - Geographic -Demographic -Psychographic -Behavioural There are different kinds of variable which are used for segmentation: -Demographic – to this belong: gender, income, education, location, and family size, ethnic. -Behaviour – some customers are “brand loyal”- customers stay with the brand they are stick to. Some consumers are “heavy” users while other are “light” users. Targeting evaluate the attractiveness of each segment. Defending a target market requires...
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...Financial Statement Interpretation LeMoura Giddings, Rebecca Tessen, James Scheu FIN 571 May 30, 2016 Professor Arnold Harvey Abstract Learning Team C has chosen three organizations from three different industries. Team C has chosen CVS Health for service, Honda Motor Co., LTD for Manufacturing, and Starbucks Coffee for retail. Team C will calculate and explain the current ratio, quick ratio, net profit margin, asset utilization, and financial leverage. Team C will also discuss the DuPont Method. An analysis of the differences in the industries, the various conventions and how they affect these organizations, ISAB basis for accounting (IFRS) and FASB or GAAP accounting principles, the strategies for working capital for all three organizations, and analyzing the financial ratios and interpreting what they mean for each organization as well as future forecasts. Financial Statement Interpretation Differences in the Industries CVS Health operates in two segments: Pharmacy Services and Pharmacy Retail. While Pharmacy Retail may be what it is most widely known for, it is Pharmacy Services that is the most profitable segment for the health company. The Pharmacy Services division serves primarily employers, the managed care plan for Medicaid, and pharmaceutical contracts. CVS Health, the most integrated pharmacy chain in the United States, includes nearly 8,000 drugstores and over 1,000 clinics. Additionally, CVS Health has expanded their reach in both these fronts...
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...MANAGEMENT AND LEADERSHIP PAPER – STARBUCKS Sheila D. Forte Professor Cedrina Charbonnet Management 330 How can we differentiate between management and leadership? The biggest difference between managers and leaders is the way they motivate the people who work or follow them, and this sets the tone for most other aspects of what they do. You have people that can do both the management and leadership aspects. We know the functions of management involves planning, organizing leading and controlling. Leading has a profound effect on manager’s ability to govern as well as plan, organize and control. Basically leadership deals with interpersonal aspects of manager’s job; meanwhile, leadership deals with change, inspiration, motivation and influence (Management functions, n.d.). Leadership involves influencing others toward the attainment of organizational objectives. Effective leading requires the manager to motivate subordinates, communicate effectively, and effectively use power. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort toward the attainment of organizational objectives. To become effective at leading, managers must first understand their subordinates' personalities, values, attitudes, and emotions. (Management functions, n.d.). Comparing and contrasting the difference between management and leadership are as follows: management produces order, consistency, and predictability; leadership produces change and adaptability...
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...What Went Wrong with Starbucks? Financial Analysis and Business Evaluation Case Study By Julia S. Kwok* Elizabeth C. Rabe Northeastern State University * Corresponding author: Department of Accounting and Finance, College of Business and Technology, Northeastern State University, Broken Arrow, OK 74014; Email: kwok@nsuok.edu; Phone: 918-449-6516. What Went Wrong with Starbucks? Financial Statement Analysis Abstract After decades of grande growth based on the Starbucks experience, Starbucks Coffee Company experienced continuous drop of stock price since the beginning of 2007. Upon first glance of their financial statements, there was 20% increase in revenues and 9% increase in net income last year. Such growth could be counter intuitive to the drop of market value. This case encourages a more in depth examination of how the financing of the expansion impacted financial ratios. Further assessment should evaluate the impact of expansion on the company‘s free cash flows and return of the capital investment. Students would need to evaluate the relative contribution of factors leading to the drop of the stock price. The case provided detailed information that would allow students to investigate the impact of the economic and business conditions, the competition and Starbuck‘s business strategies on their financial performance. The students were advised to consider what changes to Starbuck‘s strategies could increase the economic value added of the expansion and help to reverse...
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...Starbucks is the place where individuals can visit in they want to taste one of the country’s best coffees or beverages. Starbucks first appeared on the scene back in 1971 at Pioneer Square, downtown Seattle, Washington. During the 1970’s, Americans all over the country who were coffee lovers traveled from near and far in order to visit Starbucks at its historic Pike Place Market location in Seattle, to get their hands on one of the finest beverage across the globe. The founders of Starbucks have been able to develop their professional development because of the location of their company, quality of product as well as the the price of their goods. The value of Starbucks products is centered on the quality of the products they stock. The following paper will talk about the processes created in order to be certain that ethical behavior is upheld, find practices used to comply with the Security Exchange Commission regulations, as well as calculate the financial performance used throughout the previous two years using financial ratios. Additionally, the trends for all ratios and the financial wellbeing will be argued as well via the 2011 and 2012 financial records for Starbucks. Starbucks has progressed immensely as a corporation based on the history of the company, not only in America, but abroad as well. The Standards of Business Conduct for Starbucks located in the employee’s training guide was created to uphold Starbucks Global Business Ethics Policy. The notion...
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