Starbucks Financial Decisions
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Starbucks Financial Decisions
Financial decisions in any business firm are always important decisions that must be taken into deep and well-laid plans for its success. Financial decisions are related to the management of the company in different ways. Starbucks is one of the companies and has to focus on its decisions made on finances to be successful as any other business firm’s main goal. These decisions include decisions on investment, financing, and dividend decisions (Lee& Shin2018).
Investing Decision
This type of financial decision aids in managing how funds invested in a firm are invested in various assets. It can either be short term or long term decisions. Long term decisions on a new store usually involve large amounts of capital invested that are irreversible. Short-term, on the other hand, is the investment that affects the daily working of a firm. A poorly laid down budgeting capital affects the profitability and liquidity of a firm hence affecting its management.
Financing Decision
The financing decision is mainly concerned with the amount of finance the firm will raise from various funds like preference shares, loans from banks, or debentures. This helps the Starbucks management team decide the banks that would partner with them to get loans or those with favorable rates. A dividend decision is the other kind of financial decision that a new store requires for its success. This kind of decision is concerned with how the store’s profits are distributed to shareholders (Lee & Shin 2018). This ensures that the management distributes the profits in such a manner that does not lead to losses.
Starbucks is one of the successful stores that has always been on the top. This is usually due to the huge amounts that are put aside only for marketing their products. Starbucks markets its products through various media, making its products recognizable and popular (Lee & Shin 2018). The consistent advertising and marketing through various social platforms make Starbucks brand successful even when starting a new store, which is always expensive.
Reference
Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(1), 35-46.