Starbucks is a coffeehouse company that has a chain of more than 25,000 coffeehouses. It has thrived over the years mainly because of the quality of their product and the customer experience they give. The corporation’s mission is “to inspire and nurture the human spirit- one person, one cup and one neighborhood at a time” (Schultz, 2009) . The first Starbucks store was in Seattle, Washington in the year 1971 and that is its headquarters as of now. Starbucks serves a wide variety of teas, pastries and what they are famously known for, coffee. They roast whole bean coffee and they do it so well that they made dark roasted coffee very popular. Like any other company, Starbucks’ Cash flow mainly comes from operations, financing and investments.
Quality assurance in operations in the company stand as the main income earner. The coffeehouse has ensured maintenance of top notch customer service and the quality of their coffee keeps their customers very loyal. This way, no matter how the economy cycle of the hosting state is, Starbucks continues to increase their cash flow. The company offers a very comfortable environment, internet access and product customization encouraging customers to choose Starbucks stores as everyday destinations (Michelli, 2006) .
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Branding and focus has kept Starbucks cooperation on a steady rise in terms of cash flow. The corporation brands itself as a beverage shop with a typical coffeehouse experience, an idea that Howard Schultz, the company’s chairman, borrowed from Italian coffee bars. This appeals to customers seeking quality experience. The company serves customers with relatively high income, who are willing to pay more for premium products and service.
Financing of Starbucks has generally increased over the years. Starbucks has shown great financial capacity when it comes to investment and right entrepreneurial moves hence rarely turned down by investors and donors. Besides right economical moves, the cooperation’s management has ensured quality is upheld in all stores no matter the location (Michelli, 2006) . This has led to a great belief in the company by financers.
How does investment affect the cash flow in Starbucks cooperation? The company has an owner-operator model. This implicates that the company has to spend a lot in terms of capital as it has to spend on kitchen equipment and their stores. This means that in order to start a new branch, there are great expenses incurred. High capital means a higher cash flow boosted by financers. This also ensures less expenses in terms of operational costs as rental and equipment costs are incurred (Schultz, 2009) .
The company also participates in environment preservation activities by making their business more environmentally friendly. For example, the company reduced the size of their paper napkins and garbage bags, it replaced their “dipper wells” used for cleaning utensils, which consumed a lot of water to metered faucets with push buttons, a water saving system. Starbucks started using recycled paper for their cups (Michelli, 2006) . These environmental friendly steps taken by Starbucks are a show of good faith which encourages investors and customers as well and consequently high cash flow.
Over the last several years, Starbucks has continued to expand, obtain more stores and buy bigger shares of its partly owned stores. In 2008, they purchased the Clover Brewing System manufacturer and began to test fresh-pressed coffee then created a website (Schultz, 2009) . This was a step in technological advancement that every company needs in this era to succeed. The company also introduced free Wi-Fi internet access for their loyal customers. In 2009, the company created a mobile app. A store serving beer and wine was opened Brooklyn in 2014 and in 2018, this year, Starbucks announced its consideration to use blockchain technology to connect coffee drinkers with coffee farmers which would be financially advantageous.
References
Michelli, J. (2006). The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary. McGraw-Hilll Education.
Schultz, H. (2009). Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time. Hachette Books.
