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Strategic Initiative Paper: Starbucks

1399 words - 6 pages

Strategic Initiative Paper: Starbucks
Starbucks Corporation (Starbucks) is known as one of the selling leaders of roasted and specialty coffee in the retail industry. Starbucks has been focusing on creating a detailed strategic and financial plan that will aid the company in surpassing its competitors. The purpose of this paper is to investigate Starbuck’s actions upon creation of strategic and financial plans, the strategic initiatives associated with this plans, and the impact initiatives have on cost and sales as well as associated risks.
Strategic Planning Process and Strategic Initiative
In 1971 the birth of Starbucks began, three partners Jerry Baldwin, Zev Siegel and Gordon ...view middle of the document...

Starbucks is working to regain the market share they lost the last two years by creating more disciplined operations, which will resulted in the removal of $580 million in cost from the business in 2009.Creating a better customer experience by creating loyalty card program, providing healthier choices, using social media to stay in touch with their consumers, and our partnership with (RED)tm, which helps to generate money to by medicine to help the AIDS fight in Africa. Going forward, Starbucks future lies in our ability to innovate, to be forward-thinking, Starbucks has also included new product lines including Starbucks via ready brew.
Impact on Financial Planning
A company’s strategic plan is correlated to its’ financial plan. The strategic plan has encompasses the corporation as a whole and the financial plan is an important component of the strategic plan. The financial plan serves as a guide to make business decisions for the strategic plan. The financial plan helps the company ensure that it is using its’ resources in an efficient manner and that funding is available. A strategic plan can not be successful without a financial plan.
Starbucks uses financial planning to achieve strategic plans like opening new stores in specific locations and how to market products. Financial planning has to be done prior to opening new stores so that other areas of business are not affected adversely.

Impact on Costs and Sales
According to Starbucks Newsroom (2010), Starbucks has announced that while it has no plans to raise prices on beverages or packaged coffee sold in the Unites States or international stores across-the-board, it does plan to implement targeted price adjustments on certain beverages in certain markets as a result of drastic increases in the price of green arabica coffee and significant volatility in the prices of dairy, sugar, and cocoa. Starbucks also announced that it will continue to monitor the price of green coffee and that the possibility of raising the price of packed coffee in other channels could not be rules out (Starbucks Newsroom, 2010). Also the company expects to maintain or lower the cost of some of its more popular beverages and raise the prices for labor-intensive and larger-sized beverages (Starbucks Newsroom, 2010). Starbucks is aiming to reduce cost of sales and increase revenues.
Starbucks has Farmer Support Centers in Costa Rica and Rwanda staffed with the best agronomists and sustainability experts who with farming communities to promote the best practices to improve both coffee quality and yields, this allows excessive purchasing of coffee (Starbucks Corporation, 2010). In a statement given by Starbucks spokeswoman Sanja Gould, Baertlein and Nicholson (2010) reports that Starbucks has purchased majority of its coffee for fiscal 2011. Starbucks also purchases significant amounts of dairy products (particularly fluid milk), leaf teas, its selection of ready-to-drink beverages, and food...

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