Strategic Plan Initiative
Starbucks Strategic Initiative
FIN/370
Starbuck Strategic Initiative
Starbucks is a fast growing coffee distributor around the globe. Starbucks is challenged to manage its business with strategic initiatives. This paper will discuss the relationship between strategic and financial planning efforts of the Seattle-based barista and initiatives outlined in the latest annual report. Also, how these initiatives affect the organization’s financial planning and what risks are associated with the initiatives will be reviewed. Understandably, in the highly competitive market of supplying customers with the best coffee products calls for calculated strategic and financial planning.
Strategic Vs. Financial Planning Starbucks began as a lone coffee shop in Seattle, Washington; just 40 years later, Starbucks is now a leading competitor of coffee confections around the world (Starbucks, 2012). Because the ultimate goal is to be the best supplier of good coffee to coffee enthusiasts, having strategic and financial plans in place is crucial, since one is the basis for the other. Strategic planning is the guide for which all financial planning will follow suit. A “strategic plan defines, in very general terms, how the firm plans to make money in the future” (Titman, Keown, & Marin, 2011, p. 564). The strategic plan is the backdrop that drives and guides financial planning. “Financial planning is all about allocating finite resources -- such as money, employees and equipment -- over time, to reach the broad goals set out in strategic planning. To do so involves measuring current performance against past data and trends for the future” (Boone, 2013, para. 3). There are four key components to developing a financial plan which engages many different players. The four steps are: collect historical financial data, identify trends, adjust projections, and revise estimates (Titman, Keown, & Marin, p. 564, 2011). But strategists cannot forget that financial
FIN/370
Starbuck Strategic Initiative
Starbucks is a fast growing coffee distributor around the globe. Starbucks is challenged to manage its business with strategic initiatives. This paper will discuss the relationship between strategic and financial planning efforts of the Seattle-based barista and initiatives outlined in the latest annual report. Also, how these initiatives affect the organization’s financial planning and what risks are associated with the initiatives will be reviewed. Understandably, in the highly competitive market of supplying customers with the best coffee products calls for calculated strategic and financial planning.
Strategic Vs. Financial Planning Starbucks began as a lone coffee shop in Seattle, Washington; just 40 years later, Starbucks is now a leading competitor of coffee confections around the world (Starbucks, 2012). Because the ultimate goal is to be the best supplier of good coffee to coffee enthusiasts, having strategic and financial plans in place is crucial, since one is the basis for the other. Strategic planning is the guide for which all financial planning will follow suit. A “strategic plan defines, in very general terms, how the firm plans to make money in the future” (Titman, Keown, & Marin, 2011, p. 564). The strategic plan is the backdrop that drives and guides financial planning. “Financial planning is all about allocating finite resources -- such as money, employees and equipment -- over time, to reach the broad goals set out in strategic planning. To do so involves measuring current performance against past data and trends for the future” (Boone, 2013, para. 3). There are four key components to developing a financial plan which engages many different players. The four steps are: collect historical financial data, identify trends, adjust projections, and revise estimates (Titman, Keown, & Marin, p. 564, 2011). But strategists cannot forget that financial
References: Boone, B. (2013). What’s the difference between strategic and financial planning? Retrieved from http://money.howstuffworks.com/personal-finance/financial-planning/strategic-and-financial-planning.htm Dobbs, R. & Rehm, W. (2005, August). The value of share buybacks. McKinsey Quarterly. Retrieved from http://www.mckinseyquarterly.com/The_value_of_share_buybacks_1630 Starbucks Corporation Fiscal Year 2011 Annual Report. (2012). Retrieved from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome Titman, S., Keown, A.J., & Marin, J.D. (2011). Financial management: Principles and applications (11th ed.). Retrieved from University of Phoenix eBook Collection database.