Starbucks Financial Analysis Company Overview Starbucks is the world’s largest specialty coffee retailer, Starbucks has more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products.
Starbucks is a corporation that offers specialty coffees, coffee beans, cold blended beverages, pastries, coffee related products and machines, and tea. Starbucks opened its first location in 1971 in Seattle. By the year 2000, Starbucks had over 3300 locations, and it is still growing. SWOT STRENGTHS: · 2000 marked 5th consecutive year of sales increase. · Low long-term debt to equity ratio of 0.01, company has good financial standing.
Starbucks entered the UK market in 1998 with the acquisition of the then 60-outlet Seattle Coffee Company, re-branding all its stores as Starbucks. By November 2005, London had more outlets than Manhattan, a sign of Starbucks becoming an international brand. In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, it was announced by rival Diedrich Coffee that it would sell most of its company-owned retail stores to Starbucks.
When people think coffee shop, the first name that pops into their head is usually Starbucks. Pike Place Market, located in downtown Seattle, is home to the first Starbucks. The doors to this coffee house were opened in 1971 by three graduates of the University of San Francisco. The establishment was later bought by Howard Schultz in 1987. His vision was to bring an Italian like coffee house to the United States.
He opened stores in Chicago and Vancouver, Canada and had a total of 55 stores by 1989. Since then, Starbucks has become a very successful billion dollar company with over 238,000 employees and ranking number 196 on the Fortune 500 list. Not only do they sell coffee beverages and an assortment of bakery items handcrafted at their stores, they also sell drinkware and coffee makers in store and on their website, http://www.starbucks.com/ as well. Starbucks corporate headquarters is located in Seattle, Washington, but they have nearly 24,000 stores located in almost 70 different countries. On August 2, 1996, their first international coffeehouse opened in Tokyo in the upscale Ginza shopping region.
Starbucks coffee has grown into the largest coffeehouse company in the world with 16,120 stores in 94 countries such as in Australia, Canada, China, Puerto Rico, etc. Starbucks has thirty blends and single origin coffee. Starbucks brand coffee can also be purchased in local stores to brew at home. Starbucks employs over 140,000 employees worldwide with over five million customers a week. At one point they had typical customers coming in on an average of six times a month while loyal customers come in on an average of eighteen times a month spending averaging $50.
The year 1987 was the year of Starbucks and the start of the coffee industry’s revolution. Howard Schultz, owner of Il Giornale coffee shop, was a firm believer in selling not just coffee beans, but coffee drinks as well. He bought Starbucks for around 3.5 million dollars and changed all of his Il Giornale shops to Starbucks. Schultz was on a mission to spread Starbucks everywhere. A new shop was opened every day all over the United States and other countries.
With the success of a similar establishment in the San Francisco Bay Area, Bowker, Baldwin and Siegel figured they could also build such success in Seattle. With their individual investment of $1,350 and $5000 in loans, Starbucks began. Much credit goes to Alfred Peet a Dutch Immigrant who opened Peet's Coffee and Tea in Berkeley, California in 1966. Having visited Peet's store numerous times, Bowker Siegel and Baldwin learned the art of dark roasting coffee the European way to bring out its full flavor. Starbucks started out as a coffee bean and tea retailer.
The original Starbucks opened in Seattle, Washington, in 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegel and writer Gordon Bowker. The three were inspired by Alfred Peet, whom they personally knew, to open their first store in Pike Place Market to sell high quality coffee beans and equipment. In 1982 Howard Schultz joined Starbucks as director of retail operations and marketing. After traveling to Italy and discovering the Italian coffee bar that sold espresso by the cup. When he returned, he wanted to apply that to their business in 1983.
They had found their niche. Following this, Starbucks grew quickly and began opening several stores all over the country, and shortly thereafter the world. Since the beginning of Starbucks in Seattle, the company has expanded exponentially. Starbucks is today the leading roaster and retailer of specialty coffee in the world, with more than 18,000 stores in 62 countries (Starbucks, 2014). This essay aims to discuss the company that is Starbucks, with a focus on their financial business functions.