Project Investment

Project Investments

* Assignment 2: LASA 2

* M5_A2_Vargas_J.doc

Jose A. Vargas

Argosy University

Dr. Larry Sallee

June 8, 2013

Project Investments

Starbucks Coffee Company (NASDAQ:SBUX) and specifically its acquisition of Bay Bread and La Boulange was chosen as the new product to be analyzed. Starbucks is the industry leader in the roasting of the highest-quality Arabica coffee in the world with stores globally and the premier roaster and retailer. In order for Starbucks needs to sustain the competitive advantage, management must remain innovative, knowledgeable of the market, and open to new initiatives.

This LASA assignment is intended to:

1. Identify a new product or service—either recently rolled out or about to be rolled out—in your organization or in an organization that interests you.

2. Discuss how the organization financed the initiative and why it was perceived to be advantageous.

3. Analyze each of the investment components of the analysis.

4. Present an alternative financial approach or option that either costs less or reduces the

risk.

In response to its customers’ demands for a greater amount of healthy and delicious food options, Starbucks Coffee Company has made public that it has entered into an unequivocal understanding to purchase Bay Bread, LLC and its bakery La Boulange® brand, which is based in San Francisco, California, including the employment of its founder, the widely acclaimed French baker, Pascal Rigo. In the same manner in which Starbucks brought the Italian espresso bar romance to the United States and North American consumers, this accomplishment and Pascal’s transformational and visionary leadership, together with Starbucks, will bring the artistic quality of the French bakery for the first time to its customers in the USA (news.starbucks.com, 2013).

La Boulange® bakery and Pascal are known for masterfully crafting authentic French pastries and breads from scratch using the...