Unformatted text preview: g: You need to understand how the activities you pursue will be affected by the finance function, such as the firm’s
cash and credit management policies; the role of ethics in promoting a sound corporate image; and the role the financial markets play in the firm’s ability to raise capital for new projects.
Operations: You need to understand the organization of the
firm and of the finance function in particular; why maximizing
profit is not the main goal of the firm; the role of financial institutions and markets in providing funds for the firm’s production
capacity; and the agency problem and the role of ethics. STARBUCKS
HOT AND STRONG
ometimes it seems that there’s a Starbucks
on every corner—and now in supermarkets and hospitals, too. The company that revolutionized the way we think about coffee now
has over 4,800 retail locations worldwide and
15 million customers lining up for lattes and
other concoctions each week.
The chain’s success is tied to somewhat
unusual business strategies. Its mission statement emphasizes creating a better work environment for employees first, then satisfying customers and promoting good corporate citizenship
within its communities. For example, Starbucks was one of the first companies to offer part-time
employees health benefits and equity (ownership). The goal is to create an experience that builds
trust with the customer. Profits are among the last of the company’s guiding principles.
Starbucks’ bond with employees and customers has translated into sales and earnings as
strong as its coffee. Annual sales growth from 1997 to 2000 ranged from 28 to almost 40 percent,
and annual growth in earnings per share ranged from about 12 to 81 percent. A share of Starbucks’ stock purchased in November 1996 increased in value by 17 percent over the five years
ended November 2001. That compares favorably with the 15 percent gain realized by its industry
peers and the 7 percent gain for companies in the Standard &...
View Full Document
- Fall '13
- Finance, Corporation, Types of business entity