Wake up and smell the coffee -- Starbucks is everywhere. The world's #1 specialty coffee retailer, Starbucks has more than 23,570 coffee shops in about 70 countries. The outlets offer coffee drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks operates more than 12,000 of its own shops, which are located mostly in the US, while licensees and franchisees operate roughly 11, 000 units worldwide (including many locations in shopping centers and airports). In addition, Starbucks markets its coffee through grocery stores, food service customers, and licenses its brand for other food and beverage products.
The company's global expansion plans have a particular focus on the growing consumer markets in Asia and South America. Starbucks has its own coffee farm in China. However, almost 75% of Starbucks' revenue comes from the US.
What was once a simple chain of coffeehouses has become a force of nature in the retail business. With so many outlets throughout the world, Starbucks has used its chain to branch out into other retail segments, including teas, CDs, books, and similar lifestyle products. Through partnerships with food manufacturers, it also licenses the Starbucks brand for such products as ice cream (made by Nestlé's Dreyer's Grand Ice Cream subsidiary), coffee flavored liqueur (Beam), and bottled Frappuccino (PepsiCo).
Teavana Holdings is a wholly-owned subsidiary of Starbucks. Teavana operates some 300 Heaven of Tea retail stores that sell gourmet loose-leaf teas, teapots, and other tea-related products.
Sales and Marketing
Starbucks has been on the cutting edge of using social media and technology as part of its marketing and customer services efforts. The company's annual marketing expenses totaled more than $350 million in fiscal 2015, which included about $227 million for advertising.
Starbucks has faced growing competition in the coffee sector. Both Dunkin' Donuts (owned by Dunkin' Brands) and fast food giant McDonald's are marketing their coffee selections as cost-effective morning java alternatives, cutting in on the company's gourmet coffee market. In response, Starbucks is looking to steal some market share in the quick-service segment by promoting its Seattle's Best Coffee brand to restaurant chains and other counter-service outlets.
Starbucks expanded its strategic relationship with Green Mountain Coffee Roasters for the manufacturing, marketing, distribution, and sale of Starbucks-branded Vue packs. The move helps the company's growth in the single cup category.
Starbucks’ annual revenues were $19.16 billion for fiscal 2015. That was an increase of about $2.7 billion (or 17%) compared to fiscal 2014. The revenue increase was primarily due to increased revenue from the China/Asia Pacific segment.
The company’s net income has been increasing for the most part in recent years. In fiscal 2015, its net income increased by 33% (compared to the prior period) up to $2.76 billion.
Starbucks' operating cash on hand increased by 517% to $3.75 billion in fiscal 2015 compared to just $600 million the previous fiscal year.
Starbucks has started to cut back on its aggressive acquisition strategy. The company has been simplifying instead and selling off underperforming assets as the chain refocuses on its core mission of serving quality coffee drinks and "healthy" food items in modern buildings.
In 2016 Starbucks plans to open its first location in Trinidad and Tobago as it continues to expand its footprint in the Latin America and Caribbean region.