What could affect Starbucks stock?
Starbucks stock: price and price analysis before buying
Are you planning to invest part of your capital in the American stock exchange and trade Starbucks stock? First, take some time to read the following information that will help you analyze the security. This overview also gives you the real-time price of the security as well as an analysis of the historical prices.
Factors that can affect the price of this asset:
Particular attention should be paid to Starbucks' expansion strategy in emerging markets.
The same applies to everything that contributes to the diversification of the Group's activities, as this is also important for a good analysis.
You also need to monitor all strategic alliances and partnerships that Starbucks enters into. In this context, it is particularly important whether they can improve their presence in certain markets and ensure a higher market share. This applies above all to alliances with retailers and manufacturers of consumer goods.
Direct and indirect competition is also an important factor. Accordingly, one should pay attention to large restaurant chains, provided that they offer similar products at lower prices.
Last but not least, Starbucks' communications campaigns are also important, especially those aimed at changing consumer habits and countering the trend towards favoring small local stores. In doing so, one should not lose sight of current socio-cultural trends in general.
General information about the Starbucks company
The American group Starbucks operates the coffee shops of the same name. The majority of the turnover comes from the operation of these coffee shops, the rest is achieved with the worldwide sale of licenses. In addition, Starbucks positions itself with the sale of coffee, beverages and other food to companies.
Starbucks generates most of its sales in the United States.
The activities of the Starbucks concern two different industries, namely the roasting and production of coffee and the fast food sector. A sound analysis of the stock price of this security should therefore include competition in both businesses. Below is some information about this.
In terms of coffee roasting, Starbucks ranks fifth worldwide in terms of sales. In front of it are the large corporation Nestlé and the companies Mondēlez, Douwe Egberts and J.M. Smucker. Behind Starbucks are Strauss, Tchibo, UCC Coffee and Keurig Green Montain.
As far as the fast food sector is concerned, the McDonald's and Subway are in the first two places in the world rankings.
Here is some information about Starbucks' key partners.
In 2014, Starbucks merged with the Selecta group to offer Selecta's European corporate customers the Starbucks range of coffees.
In 2015, Starbucks partnered with Spotify. Spotify users who have a premium subscription receive free drinks and have a say in what music is broadcast in Starbucks restaurants.
Also in 2015, Starbucks signed a partnership agreement with the Casino Group's subsidiary, Casino Restauration, to open Starbucks cafes in the Group's major hypermarkets in France. A similar agreement has existed since the same year with another French retail chain, namely Monoprix. In this case too, Starbucks has the option of opening its cafés at Monoprix.
For the most successful trading strategy possible for Starbucks stock price, you should be clear about whether this company will be able to continue its growth in the years to come. In this context, you should know where the Group's strengths and weaknesses lie and weigh them up against each other. Let's start by listing the key strengths that Starbucks currently has.
Corporate image is definitely one of Starbucks' most important assets. The company has succeeded in making the brand known and popular on an international level. Today it's one of the most recognized brands in the world, which makes it easier for Starbucks to get where you want to go.
The number of customers is also increasing year after year. A new customer quickly becomes a loyal customer, and the Group naturally benefits from this stability.
Since the Starbucks company has always relied on an international expansion strategy, it has oriented the supply chain internationally and can therefore count on suppliers all over the world. This makes it possible to design the processes efficiently. The geographically intelligently distributed suppliers are also carefully selected in order to guarantee fast and regular deliveries and to keep transport costs under control.
With the establishment or takeover of subsidiaries such as Ethos Water and Best Coffee, Starbucks is pursuing a diversification strategy that can be seen as a further strength. This diversification helps to limit the risks that could arise in the event of problems with the main business.
Starbucks' numerous positive points are reassuring as they suggest the stock's price appreciation will continue into the future. But it is important to also look at the other side of the coin, namely the company's weaknesses. The following is a summary of the most important weak points.
As part of its pricing policy, Starbucks relies on high prices, which must undoubtedly be viewed as a major weak point. The high prices give the company higher margins, but make the products unaffordable for certain customer groups. In this respect, Starbucks only addresses a small part of the potential target group and thus awards market shares.
The fact that Starbucks uses standardized and generally valid processes for the manufacture of the products could prove to be a handicap for future development. If Starbucks wants to gain a foothold in certain regions but is unable to adapt to the cultural specifics of those markets, it can create difficulties.
Starbucks became famous for its original products, but since these are not protected by patents, they can be copied relatively easily. Competitors benefit from the fact that they offer comparable products at lower prices, which means that the American company is losing high market shares. Some competitors even go so far as to copy the atmosphere of Starbucks coffee shops in order to attract customers. Incidentally, comparable chains are already emerging all over the world.
frequently asked Questions
The currently known financial results published by Starbucks relate to fiscal year 2019. In that year, Starbucks had sales of $ 26,509 million. Net income for the same year was $ 3,599 million. It should be added that the market capitalization of the Starbucks group at the end of 2019 was $ 103,763 million.
As a public company, Starbucks is required to be accountable to its shareholders. In this respect, the company regularly publishes summaries of important strategy meetings and information on strategic growth plans. Both this and other financial, economic and stock market data about Starbucks can be viewed on the company's website in the Investor Relations section.
It is inadvisable to rely on a single analysis if you are trying to anticipate Starbucks stock performance as well as possible. By applying multiple analyzes (technical analysis, fundamental analysis, financial analysis, industry analysis and competitor analysis) in a complementary manner, the chances of getting a feel for the possible trend of this security in the short or long term are greater.
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