Starbucks Financial Analysis

argumentative Essay
1484 words
1484 words

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 Corporation was founded in 1985 and is based in Seattle, Washington. (Bramhall) Company History The story of Starbucks coffee history begins in Seattle in 1971 when the first Starbucks opened at Pike Place Market, which is Seattle's and the Nation's oldest Farmer's Market. At this time the company was a local coffee roasting facility. That remained their core business until 1982 when Howard Schulz joined the company. He was the new marketing executive and began right away to convince more and more local cafes, upscale restaurants, and hotels to buy Starbucks coffee. The turning point for the company and the beginning of coffee history should be one year later when Schulz traveled through Italy. He got inspired by the Italian coffee bar tradition to serve fresh brewed Espresso and Cappuccino. He convinced the Starbucks founders to give his idea a chance and in 1985 he opened the first coffee bar in Seattle, named Il Giornale. (Wilson) The new concept worked out and Il Giornale was a success. But Schulz aimed higher. He found local investors and bought Starbucks in 1987 for $3.8 million. That gave way for expansion and in the same year he opened new cafes in Chicago and even Vancouver, Canada. The original 17 Starbucks Cafes were established. In 1992 the company went public and stocks were now publicly traded at the NASDAQ (SBUX). At this time Starbucks counts approx. 165 cafes. On March 7th, 2001 Starbucks eventually moved to Europe and opened their first cafe in the Old World: Zurich, Switzerland. Today the company has more than 16,000 cafes in more than 35 countries. (Wilson) Main Products and Services Starbucks Corporation engages in the purchase, roasting, and sale of whole bean coffees worldwide. It offers brewed coffees, Italian-style espresso beverages, cold blended beverages, various complementary food items, coffee-related accessories and equipment, a selection of premium teas, and a line of compact discs, through its retail stores.

In this essay, the author

  • Explains that starbucks is the world's largest specialty coffee retailer, with more than 16,000 retail outlets in 35 countries.
  • Explains starbucks has increased in both total revenue and net income by averages of over 20% each year in the past five years. there was a drop in income in 2006.
  • Explains that the cost of revenue, or goods sold, is 86.3% of the total expense distribution for starbucks.
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