Reasons Why Starbucks Still Shines, Despite Market Shortcomings
Grabbing morning joes and afternoon pick-ups are essential parts of the day for millions of people worldwide, providing an excuse to step outside, take a short walk and rejuvenate. How different would our twenty-first century lives be if there were no such thing as coffee to buzz and energize us? To coffee lovers, this hypothetical thought may be a frightening one. The desire — even need — for caffeine is what attract the crowds and make coffee such a huge business. In almost any civilized place today, a cup of coffee is never too far away and in urban environments, it’s hard to walk for five minutes without seeing a vendor. In Manhattan, there may be multiple coffee shops or coffee carts on a single block. But all cups of coffee and coffeehouses are not created equal. The industry’s reigning king, Starbucks, has consistently managed to stay on top in the popularity contest. How do they do it? Here’s a hint: A large chunk of the company’s recipe for success can be found outside of the cup. Starbucks has received its fair share of backlash in the wake of recent shortcomings for projected third quarter earnings. When it came out that the company is still growing, but that profits per share were 2 cents less than projected for the quarter, stocks plummeted by 11% on July 27th in after hours trade. But this extreme reaction to to Starbucks’ shortfall might just be an extreme overreaction. Every public company will inevitably have its ups and downs, so the big picture is important to keep in mind. Over the past year Starbucks’ trend is one of growth, despite a few sharp downturns — this recent one being the steepest. According to Forbes Markets Reporter Agustino Fontevecchia, too much optimism about Starbucks’ expansion in China set shareholders up for disappointment. The world economy showed that it couldn’t handle as much as investors expected in stocks across the board this quarter, so the decreased...
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