transformational leadership Due April 17, 2019

Name:

Name of Company: Starbucks Corporation

PHASE I

Section 1 – Description of Business

a. Industry the company is in

The company is in the service industry having been founded in America. The company is different from any other service business in the market through its unique taste that is achieved through freshly roasted of high-quality whole bean coffee that is used for the making of the drinks (Starbucks, n.d). Therefore, there is promise and delivery of quality to the consumers. In addition, the provision of the mobility of service has been clear in eth many locations that allow ease of reachability and accessibility by the consumer. It, therefore, caters to both the drive in and eth sitting customers. There is a sense of the social environment that is present in the coffee houses created by the ambiance of comfort and inspiration on being a connoisseur which promises luxury and expertise experience for its customer.

b. What the company does

Starbucks is a supplier for ready-made coffee drinks through the coffee house chain of stores all over the world with the headquarters. There are a different location with the different coffee house from the brand that is unique to their green and white color that stands out from any other service brand. In line with the promise of quality, Starbucks have locally sourced coffee in America facilities, and also an Amsterdam and Netherlands coffee plant. However, there is additional reliability on the co-manufactures in Asia, Canada, Europe, and Latin America like Cuba (Cooke, 2010).

c. Major products and/or services provided by the company

In addition to the coffee, which is the most famous product by the brand, there is the provision of premium teas, delectable treats to go with coffee or tea, pastries with an aim to deliver a passionate experience to the consumers (Starbucks, n.d). As a result, the company objective is to provide a place where people can meet and engage freely.

d. Who are their customers

The customers are adults with the majority of its population over 18 years old locals from the community. There are also business people who hold a meeting within the lounging area and friends who meet up to catch on the day to day activities. Therefore most of the market share are men and women who work or have some form of income and have a routine (Starbucks, n.d). As a result, most of the customer are often people who love non-alcoholic drinks yet are social and often the target is the consumers who cannot be able to drink during day time due to work schedule or other business ties.

Section 2 - Classes of stock (include amounts authorized and outstanding)

The type of stock in Starbucks calculation is the common and preferred stock whose equity of debt and property is security. As a result, can be cumulative, voting, callable, convertible, and maturation by date or nonconvertible, noncumulative, nonvoting, noncallable, and no maturation by date. At the end of the closing year 2017 and 2018, the common and preferred stock were at -1.4574 billion dollars and -1.74 billion dollars and an increase of 20.2%.

The preferred stock in the company in 2017 and 2018 are as indicated below.

In looking at this, the outstanding shares for Starbucks in 2018, were 1.25 billion which is seen as decline figure from the 2017 outstanding shares of 1.46 billion, this is a 12.6% decline over the year. The distribution of the shares during the quarter was as shown in the table below.

Table 1: Quarterly Outstanding Shares for Starbucks in 2017 and 2018 (Source: Macritrend.net, n.d)

In 2018 the authorized share by the last quarter was at 2,400 shares with common stock at 0.0001 par value for issued shares of 1,309.1 and outstanding of 1,431.6 (Starbucks, 2019). In 2017, the company was able to repurchase 1.5 million shares of the common stock (Starbucks-b, n.d).

Section 3 – Management’s discussion and analysis

a. Summary of financial events mentioned

Looking at the Starbucks Investor Relations, there are several financial events that have been mentioned which were all advertised to the public. In 2018, there were more than 20 events that were mentioned each different depending on the target. There were events for stakeholder information, conferences, fiscal report announcement for the quarterly, partnerships and expansion and closures (Starbucks-d, n.d). In each of the events, there is recognition of the efforts that have since been done over time and thus regular updates on the progress of the company within the year. In 2019, so far, the company despite the first quarter almost ending, the company has announced six events already with the first recognition of the quarterly report, 2019 results, shareholders meeting, and enhancement within the company on performance, and social responsibility and accountability (Starbucks-c, n.d). This shows an up to date and systematic progress monitoring as well as information dissemination that is attractive to eth investors and the public, which brings in a sense of openness.

b. Management’s outlook about the future of the company:

Starbucks management is looking forward to the increased innovation within the company to catch up with the goal of expansion for the consolidation of revenue. As a result, there is an increased effort in creating efficiency within the company through the provision of experience by concentration on modernity, comfort, connectivity, and convenience. In this way, the management such attributes this to the attraction of new retail and thus the potential of increase in revenue. At the same time, there is cropping of the culture of reward that the management is working on through partnership such as the Valor Siren Ventures. This partnership aims at driving growth and focuses on equity of investment especially in technology and product improvement (Starbucks-c, n.d). Therefore the outlook of the future is to impact the market with a unique sense of service delivery through the incorporation of more modern driven strategies and development effort for the increase in revenue.

c. Future goals (financial and otherwise) for the company:

In looking towards growth, the company future goals are set on meeting the customer needs and thus a definitive aspect in eth revaluation of implementation approach that is more targeted. In a recent annual meeting in 2018, the management leader, Johnson Kevin announce the way forward in reaching a wider audience especially with a focus on the local population it is core areas and the China market. It has been noted that the expansion over time has reduced the pace of growth due to the ease of accessibility to the market. However, this is also advantageous in the fact that it has become the norm and thus an increase in the people being served. As a result, there is more pressure on the quality of service delivery which is one of the aspects Kevin addressed by pointing out to the provision of premium service. By this account, therefore, the shift from 13 billion dollars revenue to 22 billion dollars can also be felt through service improvement and customer engagement everywhere in eth world. In addition to this segmentation, there is consideration of the operational excellence in terms of brand presentation as well as partnership in order to continue scaling internationally (Starbucks Stories, 2018). As the same time, there is an acceleration of the digital aspect in order to the relationship through mobile apps and thus enhancement of community and embracing modern innovations. The aim is to have a retail focus that is unique to the consumer and unification of both experience and sense of community which has been one of the driving force sin eth coffee houses attraction.

PHASE II

Section 4 – Ratio calculations and analysis (show equations using Word’s equation tool)

Table 2: Ratio calculations and analysis (Source: Market Watch, Guru Focus, Nasdaq, Macrotrends, Starbucks, and CSI Market)

Section 4 – Ratio calculations and analysis (continued)

a. Comments on trends suggested by the ratios

The identified ration above gives insight into the financial situation of the company by looking at its operation efficiency, the profitability and its liquidity. Therefore there is an element of quantitative analysis that is taken into consideration. This is done by pointing out that with recognition of the comparative aspect of the performance of the company within two years in order to gauge whether there is deterioration, stagnation or improvement. Therefore, the liquidity ratios, point out that the company cannot easily cash out on its assets due to the small margin that seem to only cater to the needs of the shareholding returns. At the same time, there is noticeable profitability in the company despite the fact that earning per share seem to have reduced. This can, however, be attributed to that fact that the company was able to have a high inventory and account receivable turn over. It points to an increase in the market share and in this way a definition that points to increase activity ratio in the company (Kenton, 2019). As a result, there is recognition of the fact that the company seems to be expanding an in marinating profitability within that expansion shows growth patters as well as its stability.

However, at the same time, the inventory turnover opens up the question of communication and resource allocation throughout the company especially in terms of labor since there is less stock remaining. It also means that efficiency in the service delivery needs to be critically monitored to prevent the risk of falling short. The calculation gives an overview of the more critical areas to be addressed and the possibility of recognizing gaps such as the risk of insufficient supply of inventory, the risk of an increase in debt and cost analysis to maintain a good profit margin as well as stakeholder involvement (Kentonl 2019).

When it comes to the equity ratio, the company is relatively high returning due to the fact that it is low meaning that with increased profitability, the return of investment would be even higher as there is less amount of funds being invested as compared to the return that is gotten. It, therefore, means that there is lower financial leverage hence Starbuck has very minimal use of debt in asset financing hence high performance and efficiency in funds allocation within the company and in the improvement of other sectors in service delivery enhancement.

PHASE III

Section 5 – Common-size Income Statement and Balance Sheet

Insert a table for each statement showing the last two years data converted to

Common-size percentages.