STARBUCKS CORPORATION at a Glance

Uppers

  • The world's #1 specialty coffee retailer, with more than 17,000 coffee shops in about 50 countries and more than $11 billion in annual sales
  • Well-known brand

Downers

  • Great pressure to hold down prices in the face of a sluggish economy and rising food commodity costs
  • Aggressive domestic and international expansion may lead a de-emphasis of service, which analysts blamed for prior business slowdown
  • Low salaries to baristas and other store employees

The Bottom Line

  • Starbucks is the top company in its sector, and with its great reach and planned expansion into China and possibly India it is well positioned to keep its top ranking for the foreseeable future.

About STARBUCKS CORPORATION

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.

Geographic Reach

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.

Operations

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.

Financial Performance

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.

Strategy

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.

- Show Less + Show Full Description

Company News and Press Releases

- Show Less + Show More News and Press Releases

STARBUCKS CORPORATION

2401 Utah Ave S
Seattle, WA 98134-1436
Phone: 1 (206) 447-1575
Fax: 1 (206) 447-3432
www.starbucks.com

Stats

  • Employer Type: Public
  • Stock Symbol: SBUX
  • Stock Exchange: NASDAQ
  • Chairman and CEO: Howard D. Schultz
  • EVP and CFO: Scott H. Maw
  • Chairman and CEO: Howard D. Schultz

Major Office Locations

  • Seattle, WA

Become a Vault Basic Member

Complete your Vault Profile and get seen by top employers