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Essay / Research Paper Abstract
During 2008 Starbucks has seen some difficult times, sales and profit margins have fallen. This 7 page paper looks at the firm and considers the ways in which the once strong company has gone wrong. The firms strategies, external influences and the role of competitors are all considered. The bibliography cites 4 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEstarwrong.rtf
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Unformatted sample text from the term paper:
than 10,000 outlets globally. The sale of coffee has advantages for the company, the gourmet coffee market is currently growth market, despite the stagnation and decline within the mass coffee
market. However, Starbucks is facing some potential difficulties, revenues have been increasing but profit margins and efficiency margins are indicating a decline over the last two years. The net profit
margin for 20081 (measured as earnings before tax) was only 4.4%, compared to 11.2% in 2007. Other measures that shareholders are interested in are also sowing a decline, such as
the return on equity falling from 29.81% in 2007 to 13.21% in 2008, and the return on assets falls to 5.73% in 2008 compared to 13.77% in 2007 (Starbucks, 2008).
This indicates that there are some problems, especially when it is considered that this is accompanied by increase sin the store numbers at the beginning if the year this is
a strong indicator of a fall off in the level of business. The question is, with these results, and the apparently well differentiated and established business model, where has
Starbucks gone wrong? The firm, founded by Schultz was based in a vision; In a recent press release he stated that he had
a vision 25 years ago, that "that a store can offer a welcoming experience for customers, be part of their community, and become a warm "third place" that is part
of their lives everyday - and that it can provide a truly superior cup of coffee" (Schultz, 2008). This was a vision for the company, and drove Schultz forward in
the way he develop Starbucks in the company. The vision is Starbucks is even greater than the initial vision of its founder 25 years ago. It is to "establish
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