Starbucks did not start as a seller of beverages. Its history stems in 1971 from the putting up of a business, which focused on the distribution of coffee beans, by Jerry Baldwin, Zev Siegel and Gordon Bowker. It was with the entry of the entrepreneur Howard Schultz into the company that the concept of selling beverages was raised to the owners. This was not met with enthusiasm though. Regardless, Schultz remained positive that the concept of "on-the-go" coffee would have an impact in the market and so, he put up the Il Giornale coffee shop. Later on, Starbucks was sold to the chain of the Il Giornale coffee shops. This chain was then re-branded as Starbucks.Starbucks mission statement is "to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow" and true enough, the company has indeed lived up to its mission statement.Starbucks has started expanding since its formation and its intensive growth over the past decades has enabled it to become known as the largest coffee shop chain in the world.
[...] If the use of a flexible budget and its corresponding variance analysis would be applied in a Starbucks store, the goal of the company to achieve increased sales and revenue would be backed up. To Starbucks, this would mean that the current market is satisfied with the value for money they are getting in the company's products and services. Thus, an increase in the company's sales and revenue would not have much impact on its pricing strategy. On the other hand, this would mean espousal to further market penetration. [...]
[...] Expansion To maintain its status in the industry, the expansion plan of the company should be supported by an aggressive marketing hand. Albeit the Starbucks is already a famous brand, this should not preclude the company from improving its services. Other marketing strategies should be employed to reach out to its market. Corporate Social Responsibility If there's one thing that one would immediately find at a Starbucks store, this would be the fliers which display the company's social responsibility programs. [...]
[...] Furthermore, the company should get employee's evaluation of Starbucks as an employer. This is especially important if there is a relatively high employee turnover. The evaluation would serve as a tool for the company to assess its level of performance as an employer and the degree of its competitiveness in acquiring new talents. Suppliers - To address continued loyalty of the company's coffee beans suppliers, contracts should be evaluated over a period of time to ensure that contracts are beneficial and favorable to both parties. [...]
[...] Thus, during the day, information crucial to the management of store operations are made available through the application of an activity based costing system. Although Starbucks has gone to great lengths to provide a detailed activity- based costing system, there is enormous room for human error. As an example, transactions not properly rung into the register or not at all will not provide the detail that an activity-based costing system requires. Mark out items not entered will also pose as a key flaw in coming up with an accurate report which details costs based on the activities monitored. [...]
[...] An analysis of the store's indirect costs is also performed to assist the managers in evaluating the overall profitability of a product. Currently, the largest indirect costs would be associated with their general and administrative costs. One of the largest categories that fall under this category is the cost of health care benefits for employees. Like most companies, Starbucks faces ethical situations in its daily operations. The availability of free condiments may attract customers to get more than what they actually need. [...]
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