Effectiveness is a meaure that displays the management’s effort to position a company in realtion to its competitors. The revenue or sales figures give a good indication about the effectiveness of an organization. Identified through analysis Starbucks has three primary competitors, which are McDonalds, Dunkin Donuts and Nestle. Sales figures for Starbucks were compared to McDonalds and Nestle. However, Dunkin Donuts does not have publically declared financial statements and its sales figures do not constitute the analysis provided. The newer speciality coffee retailers such as Coffee Caribaeu have not been compared to Starbucks since their sales figures were not in only thousands of dollars, whereas, Starbucks and its primary competitors identified have sales in millions of dollars. It was ascertained that new entrants do not form a comparable basis to Starbucks.
Starbucks remained a revenue growth rate of above 20% from years 2004 up till 2007. However, it attained only a growth of 10% in its revenue in year 2008. Whereas, McDonalds showed a mixed trend with registering a growth rate in revenue of 7%, 9%,6% and 3% in years 2005, 2006, 2007&2008 respectively. Similarly, Nestle registered a growth rate of 8%, 8%, 9% & 2% in years 2005,2006,2007 & 2008. It can be seen that growth in revenues of all the companies took a plunge in 2008. The industry average for years 2005,2006,2007&2008 was computed to be 8%, 9%, 9% & 3% respectively.
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