Before deciding on what kind of investment that one would like to commit their money into, it's always advisable to investigate and know the facts that would make one assured of some returns. The investigation would of course mean to have a clear understanding of how the company one is planning to invest in has been doing in the past and to try and evaluate the possible future trends and know if the decision to invest is sound. For that reason, the report below looks at the opportunity of investing in the Starbucks Company. A clear description of the company and how it has been able to emerge as the worlds' largest coffee house company (Gould, 2007).
Starbucks Corporation is a well known international coffee and coffeehouse chain which is based in Seattle, Washington. It has grown to be the largest coffeehouse Company in the whole world with more than 17,800 stores distributed in more than 49 countries and about 11,000 of them based locally in United States. It is involved in selling drip brewed coffee, espresso drinks, hot and cold drinks, salads, coffee beans, Panini as well as hot and cold sandwiches. It has an entertainment and music division which is mostly concerned with the marketing of books, films and music. The company has got lots of its products which are season depending on the locality of a store. The company has seen a lot of growth from the years it was formed and became the local coffee bean roaster as well as its retailer. There has been a major rate on the way the stores are opened both locally and abroad. (Philip Kotler,Hermawan Kartajaya, 2004)
There are various reasons why Starbucks is a good investment idea that one can get. It's a company which is traded in the NASDAQ as common stock and its symbol is SBUX. There is a difference in trading in the NASDAQ and trading in the New York stock exchange. Whereas in the New York stock exchange where traders carry their buying and selling on the floor where the traders get to meet each other. The difference in trading in the NASDAQ is that, trading doesn't need a physical traders to get to the floor but computers that communicate with each other and deals take place just like that. (Michelli, 2004) This means that, if one wants to invest in the Starbucks, they would need to contact their stockbroker who would look up to the Company's symbol which would be used to invest your money through the market dealer. Another advantage of trading in the NASDAQ is the fact that one can be able to get the stock quoting services that enables a new investor as well as an old one know how their stock is performing.
One of the things that assure an investor of good earnings in the company is the high franchise value which leads to some excellent financial results. This is to mean that the company enjoys good consumer goodwill. This can be affirmed by a result from the revenues earned in 1997 which were $975,389,000 to amazing results in 2001 of $2,648,980,000. This should be a reason an investor would rely on for assurance of better outcomes. Another major thing that makes Starbuck future look even brighter is the fact that they have drawn more focus to retail sales.
The company is not just content in reaching its consumer through the established networks, but is planning to develop a wide range of products which would be available at the local groceries and any convenient mart. Starbuck has also shown a strong earning power by recording a profit of $217.3 million which was posted on the quarter 2 statement. That was a 28% per share. This was a great improvement from the 3% per share on the second quarter statement last year. These kinds of earning power are very promising reasons to make an investor buy its stock.
There's also another major reason why the Starbucks are expected to do very well. This is due to their enhanced stock outlook. The company expects to rise its share earnings to between $1.19 and $1.22 per share. This makes its dividend payment very attractive like a dividend paid in April of 10 cents a share. The current dividend yield is about 1% of the shares which makes it a nice bonus to give it a trial. The company's success has been attributed to the business and operations strategies which have been very successful. The management team is continuously modifying their strategies to ensure they are growing as planned.
The company has also adapted new technological improvements which include an automated point of sale that carries on scanning too. The scanners are able to read products that are being sold as well as the Starbucks card which is usually a pre paid balance for future purchases. The company is not only selling their beans at the groceries only, but have partnered with Dreyers in the selling of ice cream products and also with Pepsi in selling bottled Frappucino drinks. In addition to this they have the mail order services which are specific to business consumers. (Ackerman, 2003)
They are also offering the option to purchase their product online. They do provide office beverage service to large companies which are a complete service with complete brewing equipment and merchandise which have the Starbuck logos. They do offer deliveries to small companies which include ready to brew packages of coffee, some pastries and tea. Food services have become an option for restaurants, hotels, resorts, universities and a good number of established firms. The company strategizes on they will beat their competition in order to remain the consumers favorites.
Starbucks Corporation plans to build a consumer packaged goods organization. Its creating an infrastructure that will be able to combine the very best of starbucks marketing and promotional expertise using the best consumer packaged goods capability. It is developing a specialty operation which will strive to get the starbucks brands to the retail store environment in pursuit of reaching customers where they work, shop, travel and dine. There are also a number of retail stores which are located outside of North America, Australia, Thailand and the United Kingdom. During the fiscal year 2001, the company saw the establishment of more than 282 new international stores which were licensed.
By the end of that year, it had expanded to countries like Singapore, China, New Zealand, South Korea, Malaysia, the United Arab Emirates, Qatar, Kuwait, Bahrain, Hawaii, Switzerland, Israel, and Saudi Arabia and in Taiwan. In connection to the expansion of the international growth, the company is having initiatives which are related to increasing the customer's experience in the retail stores. This it plans to achieve through the process of implementing wireless internet access in the retail stores.
In summary, starbucks is a great company to invest into due to the fact that they are expanding to all the corners of the world and selling their goods at the best streets. Their products are of high quality with undisputed franchise value which makes the company enjoy a prestigious name and as a result, selling very well. Their continued rise in the share value makes it the more reason why investing in this company is not likely to frustrate an investor.