The other strategy that they have occasionally used is the buying out of leases of their competition (Wheelen & Hunger, 2012). Through such activities, they aim at making themselves more relevant in the market while at the same time killing the effect of these competitors to the market (Pahl, 2008). Starbucks Corporation has settled on majoring on the upper scale of the industry’ s market. This gives them the ability to base their productions and services on comfort instead of convenience (Pham-Gia, 2009). Such focus has helped them to focus on the quality of their product. The year 2013 was a busy year for Starbucks as the company’ s net revenues rose to 12.0% to which they totaled to $14.9 billion up from $13.9, which was an increase in sales.
In terms of cash flow, the company’ s registered an increase to $2.9 as compared to the financial year that had passed while its capital expenditures were $1.2 billion. According to Starbucks, the operational cash flow after deducting the capital expenditures generated in the fiscal year 2013 aimed at compensating its shareholders by using (Morningstar, 2014).
On the other hand, the company registered a 5% increase in transaction levels, which led to the expansion of Starbucks’ global sales in their stores to 7%. The growth in revenue percentage was significant for the company as Starbucks was able to fund the growth initiatives that it had introduced without seeking external funding. One of the key regions that attracted high profitability for Starbucks is the North American region with a percentage of up to 11, which also included a significant increase in-store sales. Based on this, Starbucks its CAP segment results from the company’ s rapid growth rate with the opening of stores in far regions such as China and Japan hence translating to a solid performance track.
Therefore, the expansion into far markets has served as an advantage to the company and also predicts is growth.
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