Starbucks
It is recommended that Starbucks acquires Caribou Coffee (CBOU). Caribou is a direct competitor to Starbucks, which is the appeal. Caribou's existing locations can be either closed out or converted to Starbucks locations. Caribou is a strong regional brand with 541 coffeehouses (MSN Moneycentral, 2012). The company has a very similar business model to Starbucks, but with less size and arguably less business sophistication. Caribou is, nonetheless, a successful company that is now turning a profit ($35.22 million in FY2011) after many years of losses.
Caribou stock is currently trading at $16.93 per share, giving the company a market capitalization of $352.96 million. The offer for Caribou will need to be higher. An acquisition premium of 10% is reasonable (McClure, 2012), however, because there is only limited opportunity for synergies to add value to Caribou, and because Caribou stock is already trading near its all-time high. A 10% premium would give a purchase price $388 million.
Starbucks has $2.273 billion in cash, so it could use cash to pay for the purchase. Another option is to use shares for the purchase, although the company does not have any treasury stock on its books. In either case, Starbucks can easily make this purchase with equity. In addition, there are considerations...
Starbucks Coffee Marketing Plan Industry Overview Competitive Landscape Target Markets Product Price Promotion Marketing Strategy Starbucks is a global coffee powerhouse that has had a success record that nearly any company would die for. It has never undertaken much a traditional route in regards to marketing and advertising. Starbucks specialty is using word of mouth, tribal, and viral social formats to promote its products and services. It is recommended in the wake of global populist movements that Starbucks further
STARBUCK'S STRATEGY AND INTERNAL INITIATIVES FOR PROFITABLE GROWTH Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth Strengths Weaknesses Opportunities Threats Michael Porter's 5 Forces Model Industry Competition Threat of New Entrants Buyer's Bargaining Power Bargaining Power of Suppliers Formulate Strategic Marketing Improve Standing of Stock Market Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth As Starbucks was expanding, another emphasis was set on hiring talented leadership in managing the huge momentum
However, the company has in general enjoyed success overseas and as a result international sales now account for 27% of operating income (2010 Starbucks Annual Report). The international division remains a key source for growth at Starbucks, in particular the Chinese market, where Starbucks has enjoyed considerable success and now sits at over 500 stores. The company struggled in the mid-2000s due to two main factors. The first was the
There are other coffee chains in the country, but none of them are American, so Starbucks has an edge there. However, in more fashionable areas of Beijing there are Chinese coffee shops that offer their own take on a relaxing coffee shop experience. Starbucks must position not only against foreign competition and traditional Chinese tea culture, but against the inevitability of a Chinese-grown competitor. As CEO, I would recommend
1. Introduction Firms may be successful by satisfying customer needs, but their ultimate accountability for financial performance is to the owners of the firm. Actions undertaken by quoted firm will usually have the direct, or indirect, aim of generating revenues and profits for the firm, and therefore the owners (Tarraf, 2012). When investors assess a potential investment they will look at the financial performance of a firm, assessing the past performance,
These refer to the characteristics of the political and regulatory environment (P), the economic environment (E), the socio-cultural environment and finally, the technological environment. The analysis of the climate in which an organization activates is also known as the PEST analysis. 4.1 Company Product Line Starbucks offers a wide selection of coffee-based beverages, with both caffeine and without caffeine. Aside their coffee beverages, they also offer whole-bean coffees, food items and coffee-related
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