Strategic Audit of Starbucks

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Strategic Audit of Starbucks

Strategic Audit of Starbucks

Traci Hall

Jones College

Business Policy and Administration

Professor E. Smith

June 20, 2011

I. Current Situation

A. Current Performance

Starbucks is the fastest growing food chain and shows no signs of slowing down. it plans to boost earnings by 20% to 25% annually over the next three to five years and to bring its number of storefronts to 40,000 worldwide which is 10,000 more than McDonald's. Starbucks is conservative in how it finances its goals. Operating cash flow from existing stores pays for new-store development. So far, the return on new stores has been excellent. Increasing same-store sales has been a tougher order, though, and Chairman Howard Schultz has expressed worries that moves to improve same-store sales with automatic equipment and off-brand merchandise could be turning consumers off. The return on investment (ROI) for Starbucks in 2010 was 22.50%. The market share was $27.33 billion while the profitability was at 30.4% (Donald, 2007).

B. Strategic Posture

Starbucks has an impressive mission statement because it addresses their product as a whole and their mission for different relationships. "The Starbucks Mission Statement-To