Strategic Initiative and Financial Planning

Starbucks: Strategic Initiative and Financial Planning

Team A

Ryan Brennan, Yemisi Hester, John Morales, Lisa Pattie, Pauline Pollard, Anna Windust

FIN/370

February 17, 2014

Professor Jessica Sexton

Starbucks: Strategic Initiative and Financial Planning

Two types of planning that are often used by organizations are strategic planning and financial planning. Although they are distinct in their roles, they are closely intertwined, and must be properly used together to accomplish organizational goals. Strategic planning focuses on an organization’s business plan and its objectives, while financial planning focuses on how finances will be used to meet those objectives while making a profit. According to Cantoria (2011), “Corporate entities combine financial analysis & strategic planning to survive a highly competitive & volatile economy. Studies about the relationship between strategic & financial planning disclose that efficient integration allows prioritizing of projects according to viability and growth” (par. 1). Team A will introduce a strategic planning initiative while identifying an existing initiative addressed in Starbucks Annual Report, explain how the initiative will affect costs and sales, and outline the risks associated with the initiative and the financial effects that may ensue.

Strategic Planning Initiative

The strategic planning initiative that this paper focuses on is to create a drink that will increase the market share by 15% over the next year in the Pacific Northwest region; similar to the Pumpkin Spice Latte's (PSL) success for the fall season. The firm has strengths, weaknesses, opportunities, and threats that need to be addressed within this initiative. One of Starbucks’ strengths is that they are known for the high quality of the product it produces and has a very strong following of consumers whom look forward to the PSL season. A weakness is the high price of the drinks in an economy...