Starbucks Strategies for Profitability

Starbucks Strategies for Profitability 1. Introduction Major objective of this study is to shed light on the strategies and efforts made by Starbuck to solve its problems related to profitability. In order to do a careful analysis of internal initiatives is undertaken to have an idea about the success of these initiatives to return to a stable pace of profitability growth by Starbucks. To have growth in profitability Starbucks needs to generate competitive advantage among the rival firms. Starbucks will have to take into account overall trends of industry, so that long run profitability growth can be assured. Both the internal and external factors faced with the firm are analyzed separately in order to have a reliable future position. 1.1. Positive Aspects related with Starbucks and Recommended Strategy Starbucks provides healthy working environment to its employees and have detailed and employee friendly stock option plans. Moreover, the major strengths of Starbucks lie in the attractive shop design and comfortable shop environment. Starbucks aims to become a top coffee outlet not only at regional level but also at international level. So the strategy of globalization will help Starbucks to increase its profitability. In order to successfully implement this strategy performance targets for managers will have to be set so that they are provided with the incentive to improve their performance. 1.2. Objectives of Starbucks Clean supply of coffee. Create readily happy clients all the period. Provide an incredible work place and handle pride and one another with respect. Accept diversity being an important element in the manner we do company. Make use of the greatest requirements of quality towards the buying. Lead positively to the towns and our environment, and notice that success is important to our potential success. 2. Issues faced by the Firm 2.1. Internal Issues Limited Product Range: Starbucks offers a product range comprised of single source and approximately thirty products , Coffee machines, advanced candy, coffee cups, coffee accessories card, a stored value card, coffees, containers frap-puccino caffeine products, coffees, coffee liqueurs, type of ice creams, audio, publications, movies, house Starbucks and gifts. Limited Advantages provided to Employees: Many conflicts among workers have been observed since in various outlets of Starbucks all over the world and the main reason was low-pay and extended work hours. As the burden of work remains high the employees feel overworked and hence they find it difficult to continue working at Starbucks. 2.2. Insufficient Growth of Alternatives Available When the business was started there were just 17 coffee shops but now the outlets are running in 39 nations all over the world having almost 12,240 outlets. The worldwide rate of growth associated with coffee shops is too high as compared to that of Starbucks. This fact leads to create a severe anxiety for Starbucks and limits the growth opportunities available to the firm. 2.3. Customer Relationships The clients of Starbuck are not that much diversified and belong to almost similar group. On the other hand it not the case with other international coffee brands. Another consideration is attached with the Starbucks connection with their clients. Starbucks is regarded as very awesome coffee brand when consumer considerations are concerned. In the region of Beijing where Starbucks recently closed an outlet due to ethnic differences among manufacturers can also be regarded as a threat to the future growth of a business. Some revolutionary anti-capitalism activists left the Starbucks becoming former clients, but additionally Starbucks and especially small people even not approved within the company’s feel uneasy or shops. Because of Starbucks rapid development, the manufacturer so dropped its unique hospitality for customers and continues to be commoditized. Major Issue Faced by Firm On the basis of above discussion it is found that major issue for Starbucks is limited growth opportunities which may be result of weak customer relationships. 3. Analysis of Financial Ratios Liquidity ratios: Tells us about the ability of a firm to pay its short term debt obligations. The most commonly used liquidity ratios are current ratio, quick ratio and cash flow ratio. Current ratio (Cr) = Current Assets/Current Liabilities Current ratio shows that how much of current assets a firm has in order to be able to pay its short term debt. For the year 2009 Cr =403.60 / 309.30 = 1.30 For the year 2010 Cr =476.10 / 318.50 = 1.49 Conclusion: The current ratio is 1.30 in the year 2009 which shows that the firm had current assets of $ 1.30 in order to pay liability of $1. In the year 2010 the firm had $ 1.49 to pay the liability of $1. The improvement in current ratio is indicating that the position of firm in the form of current assets to finance its debt has been improved. Quick ratio ( Qr)= (Current assets-Inventory-Prepaid) / current Liabilities Quick ratio shows that how much of convertible assets a firm has in order to be able to pay its short term debt. For the year 2009 Qr =403.60- 119.20-44.30 / 309.30 = 240.3 / 309.30 = 0.77 For the year 2010 Qr = 476.10 115 – 47.30 /318.50 = 313.8 / 318.50 = 0.98 Conclusion: The current ratio was 0.77 in the year 2009 which shows that the firm had convertible assets of $ 0.77 in order to pay liability of $1. In the year 2010 the firm had $ 0.98 to pay the liability of $1. The improvement in quick ratio is indicating that the position of firm in the form of convertible assets to finance its debt has been improved. Cash ratio (Chr) = Cash/ Current Liabilities Cash ratio shows that how much of cash a firm has in order to be able to pay its short term debt. For the year 2009 Chr = 54.50 / 309.30 = 0.17 For the year 2010 Chr = 76.70 / 318.50 = 0.24 Conclusion: The cash ratio was 0.17 in the year 2009 which shows that the firm had cash of $ 0.24 in order to pay liability of $1. In the year 2010 the firm had $ 0.24 to pay the liability of $1. The improvement in cash ratio is indicating that the firm has more cash to pay back its debt has been improved in 2010 as compared to 2009 which is a good sign for Starbucks. Leverage Ratios: These ratios tell us about financial structure of company. The sources of fiancà © of a business are shown by leverage ratios. It shows the components of debt financing, equity financing and self financing of a firm. Debt to equity ratio = Total Debt / Total equity. It shows the components of debt and equity in firm’s capital structure. For the year 2009 (DEr) = 1827.80/ -1033.60 = -1.76 For the year 2010 (DEr) = 1783.10/ -696.40 = -2.56 Conclusion: negative value of equity is showing that the value of an asset used to secure a loan is less than the outstanding balance on the loan. The value of assets is far below the outstanding balance on the loan used to purchase those assets which is sign of possible financial distress of the firm. Debt to equity ratio is greater than 1 showing that the component of debt is much higher than that of equity in firm’s capital structure. The debt component has been decreased in 2010 as compared to 2009. Debt to asset ratio (DAr)= Total asset / Total assets. It shows how much of firm’s assets are financed through debt i.e. components of debt and equity in firm’s capital structure. For the year 2009 ( DAr) = 1827.80/ 794.20 = 2.30 For the year 2010 (DAr) = 1783.10/ 1086.70 = 1.64 Conclusion: The ratio of 2.30 in 2009 is showing that component of debt in total assets is almost two and a half times that of equity. However this ratio is decreased in 2010 which is showing that equity level of debt has been decreased in firm’s capital structure as compared to 2009 which is a good sign for this firm as there is a risk of financial distress and bankruptcy associated with high levels of debt burden. 4. Diagnosis of Firm Performance Profitability Ratios: Profitability ratios reflect the performance of a company it shows that whether firm performance is improving or deteriorating. Return on Assets = (Net profit / total assets) * 100. This ratio shows that how much profit is being generated by firm’s assets or what is the contribution of firm’s total assets in its profitability. For the year 2009 ROA = (48.80 / 794.20) * 100 =6.14 % For the year 2010 ROA = (327.30 / 1086.70) * 100 = 30.1 % Conclusion: ROA of 6.14% in the year 2009 is showing that every $ 100 invested generates $ 6.14 as profit. ROA has been improved in the year 2010 as now each $ 100 invested will generate 30.1 as profit. So the profitability is improved in the year 2010 which is a good sign. Net Profit Margin = Net Profit / Sales It reflects the amount of each sales dollar left over after all expenses have been made. This ratio helps a company determine how much actual profit is made from each sale earned. The higher the net profit margin, the better the company is doing at turning sales into profit. For the year 2009 NPM = (48.80 / 1295.90) * 100 = 3.7 % For the year 2010 NPM = (327.30 /1321.40) * 100 = 24.76 % Conclusion: Net profit margin has been greatly increased in the year 2010 as compared to that of 2009 which is a strong positive signal. The improvement may be because of strong sales or decreased costs and overhead. On the basis of above calculated ratios it can be concluded that overall financial position of the firm has been improved in 2010 as compared to 2009. However there is high risk of financial distress due to heavy debt burden. 5. Solutions for Issues faced by Starbucks Changing associated with an exterior atmosphere of the organization led to cause various problems related to the business and contributed to to the closing of the shops of the organization within the USA. These problems are mainly related to the businesses connection, the critique firm’s fair-trade guidelines and the additional governmental problems affecting the business. To cope up with these problems the organization requires a detailed strategy to resolve these issues. Major solutions for problems faced by Starbucks are as follows: Steps to face numerous current competitors, or to minimize the risk of fresh competitors entering the marketplace Revolutionize the political and financial atmosphere. Adjustments in consumer preferences or styles Selection of Best Alternative available Among the above mentioned solutions the most feasible one is to make adjustments in the products offered by the firm, to best suit the tastes of consumers. For this purpose Starbucks will have to keep in view the products sold by other firms of same industry because these products are substitutes of those offered by Starbucks. The firm will have to introduce more differentiated products because differentiated and unique products always remain successful to attract more and more customers. 6. Conclusion Keeping in view the above discussion it can be concluded that Starbucks severely needs to boost the worldwide reputation of the company in order to achieve its growth targets. Pursuing a careful strategy related to the enhancement of growth opportunities, Starbucks may become able to return to a profitable growth path as they have available opportunities for continued growth of their business. Coffee business is growing all over the world including US industry, a market is growing more saturated and hence the competition is rising at international levels. References CEO, S. (2004). HOW STARBUCKS WORKS WITH NGOS.California Management Review,47(1), 92. Thompson, C. J., Arsel, Z. (2004). The Starbucks brandscape and consumers’(anticorporate) experiences of glocalization.Journal of Consumer Research,31(3), 631-642. Gallaugher, J., Ransbotham, S. (2010). Social media and customer dialog management at Starbucks.MIS Quarterly Executive,9(4), 197-212. Grundy, T. (2006). Rethinking and reinventing Michael Porters five forces model.Strategic Change,15(5), 213-229.

Langston Hughes Poems Analysis Essay

Langston Hughes purpose of these sets of poems was to outline the current condition for African Americans at that time, and also to display his desires and present the ideal conditions for African Americans. Below are several of his poems that has symbology and reflects and demonstrates his desires and ideals. In my opinion, Dream Variations demonstrates Hughes desire for African Americans to be able to enjoy the pleasures of life as white people did. When he says â€Å"to whirl and to dance till the white day is done† he is speaking of being able to be free, dancing and â€Å"flinging your arms† is demonstrative of freedom and an open expression of freedom. Then be able to rest at night and have a sense of peace of mind, knowing that African Americans have the same opportunities that White Americans experienced. In Hughes’s poem Prayer Meeting, he displays a sense of hope and longing for improvement in African Americans lives and wanted African Americans to be free from oppression. â€Å"Glory! Hallelujah! The dawn’s a-comin† demonstrates that freedom from oppression is on the horizon and that African Americans should rejoice. The setting of this poem in religion also demonstrates a sense of hope since religion is often sought after to achieve a sense of hope. In Song of the Revolution, this poem uses the symbology of the American Revolution as another call for freedom from oppression, however this is freedom from the oppression of White America. â€Å"Marching like fire over the world, weaving from the earth its bright red banner† uses fire as a symbol for hope and courage and the use of a red banner as conviction and steadfastness. In the third stanza, which states â€Å"Breaking the bond of the darker races, breaking the chains that have held for years, breaking the barriers dividing the people, smashing the gods of terror and tears† This stanza serves as a call to arms for African Americans. This stanza is less symbolic and cryptic than the others. â€Å"smashing the gods of terror and tears† is the freedom from rulers and the establishment which has wronged and oppressed them. He wants a unity of the races and a freedom and lack of oppression. In Let America Be America Again, hughes is using America’s calling as a beacon of hope to the world to demonstrates his ideal for America to truly be free and not simply as a saying. This is evident in the first stanza, which states â€Å"Let America be America again, Let it be the dream in used to be, let it be the pioneer on the plain, seeking a home where he himself is free. † The parenthesis between the stanzas is what is important, because it displays Hughes’s real opinion of America at that time, which was he doesn’t believe in America, and to him was never a beacon of hope or a land of liberty. He believes that America is tyrannical, oppressive, and discriminatory to him and his people. In the last stanza he also uses divisions of class and other races that are oppressed as reinforcement for his opinions of America. In the third stanza which states, â€Å"O, let my land be a land where Liberty is crowned with no false patriotic wreath, but opportunity is real, and life is free, Equality is in the air we breath. † It’s demonstrating Hughes’s desire for America to really be as it’s envisioned and not simply as it is portrayed (in the eyes of Hughes); equality should be as prevalent and available as air.

City and Farm Life Essay

Comparing and contrasting city and farm life has been a common theme of situation comedies, movies as well as novels for decades. Many people find themselves, at some point, questioning the advantages of living on a farm life to living in the city. While a case can be made for both locations as to which is the best place to live, it is vital to consider how the options, farm life versus city life, are similar as well as different. There are a number of ways to make such comparisons that include firsthand experience of each type of the city and farm living environments. One such contrast is that people living farm lives and those living city lives have different social constructs as far as health and physical activities are concerned. This is as a result of the various social circumstances of the communities in addition to the locations in which they reside. People living farm lives, live a typical farming or country life as compared to those living in the cities (Smith 1). Living a c ity life often has the advantage of sufficient access to health services, recreational facilities in addition to having relatively sufficient health education in comparison to farm life. see more:city life vs country life essay People living in the city have therefore an advantage of health benefits, developed knowledge of physical activities, are exposed to health promotion campaigns in addition to having higher socio-economic status. All these factors have contributed to people living a city lives experiencing superior health compared to those living farm lives (Recomparison 1). Another key issue to be considered in any comparison between city and farm life is the quality of life. People living city lives have many more choices they can make regarding various aspects of their day-to-day lives. For example, people living city lives are more likely to find various kinds of foods and this could probably result in overall good health as there is greater diversity in terms of diet. Moreover, those living city lives enjoy opportunities to take a great number of social events since they always have a long list to choose from. As a result of this, they always have an opportunity to get more cultured and therefore more likely to meet other people from other cultural and ethnic groups. Parents have also many options available for their children’s education and can always pick from a long list of both private and public schools, which results in potential for better education. It is also important to note that city life offer their residents the opportunity to choose from a wide range of job options in a number of companies or organizations. On the other hand, people living farm lives do not enjoy same level of choices and in very remote areas one may forced to walk for long distances (Recomparison 1). Another contrast between city and farm life is their surrounding environment. Farm life is often best described as a more peaceful as well as a healthy way of living. For example, farm life offers residents an opportunity to take pleasure in the natural world instead of having to go to places such as parks. Individuals are surrounded by the gifts of nature such as trees, sun, wind, animals, natural cycles etc. Moreover, people living farm lives do not have to s truggle with the every day stresses associated with city life, for instance getting stuck in traffic, coping with high crime rates, and in most cases, having to pay higher taxes. The absence such stressors are known to have a significant effect on the overall quality of life. Alternatively, city life is often portrayed as fast-paced, modern, polluted, and full of work pressure as well as financial pressure (Recomparison 1). On the whole, if there is any testimonial to be made regarding the quality of life in the farm, it is that, there is high probability to connect with the people as well as the landscape. However, one similarity between farm life and city life is that both entail a high level of socialization, even though on a cursory level E-how 1). The discrepancy of what an individual wants and needs has also something to do with where they are to be found. Individuals living a farm life identify as well as prioritize their needs much more than their wants. They are therefore familiar with what is essential for them to live a standard of living further different from others and closer to natural cycles that gives priority to things that are of greater im portance. Their wants are simple and they do not cling to the life they cannot afford. On the other hand, with the attractive as well as the competition inducing advertisements they watch on television along with the peer persuasions that urge them to acquire specific items, one cannot avoid feeling pressured to possess the items. City is therefore more complicated as compared to the farm life (E-how 1). Lastly, a contrast between city and farm life can be seen in the types of housing available. In general, city residents have choices of living in apartments, townhouses and condominium. In contrast, those living farm lives often have housing options that includes mobile homes, single family detached homes in addition to the low-rise apartment building.Moreover; housing is more often than not cheaper for those living farm lives due to decreased demand (Herlihy 1). Conclusion As a conclusion, both city and farm lives have their own draw backs which form the basis of their contrasts. Thus, individuals ought to think carefully before making decisions to live in the city or live a farm life since it’s their decisions that bring differences in their lives.

Poem on Kite Runner by Khaled Hosseini

Poem on Kite Runner by Khaled Hosseini The Kite Runner: Khaled Hosseini A friend is a friend is a friend. When I was young, I didn’t see it. I saw the slingshot and the pomegranate tree. I saw a boy who had to be less. Less than worthy, less than perfect, less than me. I saw a servant. And I ruined him. But now that I’ve gathered a few more years, Things are different. I look back and note: The kite soared high above my perspective. I see a boy who is so much less. A boy who is scared, who is weak. An educated idiot. And I hate him. Sohrab, like his father before him, will pull me back up. He will better me as a man, subconsciously. He lost his father, the poor boy. For he should have known Hassan. Maybe I will better him. Maybe he can bring redemption. A bright young boy. And I cling to him. A friend is a friend is a friend. He changed me, and