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Marketing you need to understand how the activities

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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 KEEPING 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 &...
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