Starbucks: A Worthy Investment
Introduction
When it comes to finding a proper organization to invest in, there are two specific matters that need to be considered especially when it comes to the possibilities of earning more from the said organization. It is not a joke to invest on anything, especially on business organizations that are currently operating in the market. Weighing the risks and benefits will make it easier for the administrators and/or business operators to define whether or not they are going to invest in a particular organization. One specific matter to note is the track record of the organization. It is understood that every organization follows a pattern of operation. Nothing how effective such pattern is especially in facing different difficulties that the business may have to deal with in the past may provide a distinct picture on how effective the management is to hold the business stable enough to give off respective profits to its investors. Another matter to give attention to is the current and future market positioning of the organization based on the competitive stand it takes in facing the local and international markets. As for this presentation, a consideration on how Starbucks appeals to be one of the most convenient organizations to invest in at present shall be given attention to. Through the use of SWOT analysis and PESTEL analysis, the strengths of the organization weighed against its weaknesses shall be given specific attention to so as to show how much beneficial it is to engage in investing upon the said business.
Company Background
Coffee, one of the most popular beverages all over the globe, this is the product that Starbucks offers ever since the time it has begun in 1971 (Behar, et al, 2007). Engaged in several international franchise mechanisms, the company now boasts a staggering 20, 891 stores existing in at least 64 countries in Europe, the United States and Asia (Simon, 2009). To make their products more attractive, the company has created a brand that does not only appeal to the taste buds of their customers but to their social standing as well. Considerably, to make sure that they would be able to serve what the different individuals want out off their ‘product-rack’, they created different beverage-menus apart from coffee itself. This strategy made it possible for them to expand their target market without necessarily ruining their original goal of serving the best coffee in town.
With an established brand, Starbucks foresees to set up and open up franchise shops all over the globe in 2015 and reach up to 50,000 stores worldwide (Simon, 2009). To make sure this happens, the administrators see to it that they are able to adjust to the times that the market deals with. This includes economic preferences as well as cultural diversity among the customers they serve in the market. Being able to follow through such changes allows them to become more competitive and hold tight to their current position in the coffee industry as one among the top three players in the said field of business.
Market Positioning
Considered as one of the pioneers in the coffee industry, Starbucks remains at the top of its game even though several competitors have already risen in the market. Even though at the point of entering highly localized markets such as Japan [whose people would rather prefer tea than coffee] , Starbucks remain stabilized especially in determining their reputation along with the main product they offer, coffee. When it comes to dealing with local tastes, franchise owners are given the chance to create their own menus and coffee recipes given that all these have already been approved by the main administrators. This keeps intact the global brand that Starbucks hopes to protect. With the social context considered along with the promotion of their coffee, Starbucks offers more than just the coffee [or any other beverage offered by the company], instead it offers prestige and social identity among its customers, something that some coffee drinkers simply cannot resist.
SWOT Analysis
This SWOT analysis shall provide a distinct picture as to how the company is able to hold its position in the market amidst heavy competition. Relatively, through this process, it is expected that the distinct characteristics that makes Starbucks a one-of-a-kind company shall be given specific attention to:
Track Record of Revenues in 2013
Considering the notable accounts regarding the condition of business that the company handles, it could be realized how the organization itself is trustworthy especially that it continuously takes the route towards determinable growth. It could be realized that with such constant terms of annual development, it would be safe for any investor to take the chance and develop a connection with the organization through sharing with their profits in an annual schedule.
Recommendations
Considering the long-time track record of Starbucks [from 1971], it could be analyzed that the business is indeed stable. Championing within at least 14.89 billion dollars of revenue in 2013 (Michelli, 2013), the company is indeed assumed to have a great control of its resources and its strategies for developmental market promotion. Through these details, it is then recommended that Starbucks be added into the list of organizations that are being chosen for investment. It is strongly recommended that investing in Starbucks be considered as a feasible possibility that would bring in larger profits in the coming years as the business itself grows along with the economy of the world.
For anyone or any organization aiming to invest on a business, Starbucks is indeed a good choice as it allows its investors to get the best out of their money. The effectiveness of the management procedures they use and the financial direction that they follow, Starbucks, along with its franchise branches around the globe is expected to expand further in the coming years; a sure win for investors hoping to engage in business with the company.
References:
Behar, Howard with Janet Goldstein. (2007). It's Not About The Coffee: Leadership Principles from a Life at Starbucks. London: Texere.
Michelli, Joseph A. (2013). The Starbucks experience: 5 principles for turning ordinary into extraordinary. London: Texere.
Pendergrast, Mark (2001) [1999]. Uncommon Grounds: The History of Coffee and How It Transformed Our World. London: Texere.
Schultz, Howard. and Dori Jones Yang. (1997). Pour Your Heart Into It: How Starbucks Built A Company One Cup At A Time. London: Texere.
Simon, Bryant. (2009). Everything but the Coffee: Learning about America from Starbucks. London: Texere.
Starbucks Income and Balance Statement. http://www.nasdaq.com/symbol/sbux/financials?query=balance-sheet. (Retrieved on April 21, 2014).
