The influence of information technologies on the financial statements of modern organizations cannot be ignored (Boone & Kurtz, 2013). Starbucks, like all other business organizations, has been faced with changes in its external technological environment. This has necessitated the organization to institutionalize a culture of innovation in order to achieve growth.
How Technological Decisions Influence the Financial Statement of Starbucks
Growth and changes in technologies have presented the management with numerous opportunities as well as threats that must be taken into account for positive alternations to be realized. Some of these include the increasing mobile purchases, technology transfers to coffee farmers, and the increased availability of coffee machines for home use. In addition, the leveraged use of mobile applications has prompt Starbucks to cooperate with others like minded players in the technological sector, thereby integrating additional features. This has facilitated the process of purchasing for clients while aligning loyalty of customers through the enhanced reward program that encourages clients to earn cumulative points every time they make purchases. Though using mobile apps to make orders and payments is convenient for both clients and business owners, it also reduces the need for extra manpower in the outlets. Eventually, this serves as a cost cutting tool that promotes the business save on labor expenses. Furthermore, it reduces accidental and deliberate errors that are made in transactions by staff, thereby saving on revenue leakages. This is an ever growing field that will extend its impact on the multitude of the outlets as technologies continue to advance, and Starbucks continues to embrace the same (Geereddy, 2016).
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Developing the policy aimed at improving or expending the mobile apps and other linked services should be one of the management’s initial duties that will help the organization gain increased revenues. In this field, the management and efficiency of the supply chain is one of the proven business enhancers since it ensures quality and product accessibility. With the availability of improved technologies for making payments to farmers, the organization has the opportunity to invest in efficiency based technologies that streamline the supply chain. Adopting mobile apps can benefit the brand in creating the system of discount coupons that will stimulate further increase in the organization’s revenue. Currently, Wi-Fi has grown to become one of the most vital aspects of the internet. Many organizations rely on the services it provides, and therefore, they reap considerable advantages from the convenient environment that it suggests. The decision to install Wi-Fi in all outlets can be a major business boost because staff and customers would be able to proceed with their work when they need to. This provides a technological advantage for the clients alongside acting as a value addition for the brand. When the average customer experience is enhanced and improved, the succeeding aim is the growth in customer volumes, increased revenues, and subsequent rise in profitability levels. This is the decision that positively impacts the financial statements because it intensifies installation and internet expenses, while increasing numbers on the income statement (Dudovskiy, 2015).
Reporting of a company’s financial position is crucial to Starbucks stakeholders who must be informed immediately. Financial statements are critical to the management of an organization because they are valuable in making decisions regarding investments, buying, selling, growth, expansion, and redundancy among others. The advanced technologies have influenced the manner in which this information can be passed from one party to another, namely among stakeholders, shareholders, regulatory agencies, and the media. Unlike in the past, when such information was communicated in meetings, the current state of affairs allows applying teleconferencing, text based communication, and even shared audio and video clips to transfer data. Such clips are also shared to media houses and online sites to allow more people to access the information easily.
On an everyday basis, or even on a more frequent basis as stipulated by the management, various branches are able to share financial information to the central collection point. This may be a regional or the country head office that has a central collection station. Instead of exchanging physical documents between departments, there is real time interchange of information that guarantees accuracy and punctuality. The following data shows Starbucks share prices on October 28th 2016, as listed on the NASDAQ.
How Socio-Cultural Decisions Influence the Financial Statement of Starbucks
Based on the analysis conducted on Starbucks, numerous social conditions and trends have continued to influence the business as well as its customers over time. Some of these include the growing coffee-drinking culture, the increased consciousness in regards to health, and the ever-raising middle class due to the flourishing economy that leads to the rise in disposable income. In accordance with these opportunities presented by the socio-cultural factors, the Starbuck’s management must make decisions that would take advantage of the situation. These solutions will eventually affect the Starbuck’s financial statements.
First of all, comprehending the needs of both existing and target markets is the ultimate requirement (Sofat, & Hiro, 2015). Starbucks has largely considered the differences in age of their customers. With the presence of products such as juices for children who are discouraged of taking coffee, Starbucks has ensured parents feeling comfortable visiting them. Such strategy helps to increase sales, and provides positive financial statements as well.
Market diversity is a significant factor that stimulates the growth and the development of the industry. Under the company’s international strategy, Starbucks may make a consideration of the tastes and preferences of several global communities by incorporating other products like tea and fresh juices. There are lots of people whose religious, health and cultural beliefs do not allow them to consume caffeine, but they would be greatly honored to enjoy the ambience offered by the Starbucks brand. Decisions like this will certainly influence the financial statements that will grow from the increased clientele base.
Other factors that impact the socio-cultural environment in which financial institutions are involved include regulations relating to the language that is used in publications and broadcasts. This determinant may mean that some interested stakeholders may be disregarded in terms of the information if it is not communicated in the language that they understand. For this reason, the management must perform all steps, such as, for example, translating the financial information into any major languages, considering all stakeholders.
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The branding of the companies goods is unique and colorful. This attracts customers since the slogan and color combinations draw attention. The use of slang and offensive music is discouraged due to the focus on the diverse market where everyone has his/her own preferences. The common language and friendly music are highly recommended in advertising.
Depending on the location of a site, it is necessary to observe the norms and beliefs of the society. Volti (2013) explains how the values of a society interfere with the changes of the economy. It is hard to convince a deeply cultured society to adopt changes, but with persistence and by use of offers and free samples, it will gradually make people discover a product and pursue it in future.
The more the new outlets open, the more employment opportunities appear. Starbucks has created jobs for a multitude of people. Their advertising platform that involves people since they begin to consume goods has also created positions. They give incentives, retirement benefits, and cards where one earns points on use. This, according to Samson & Daft (2012), encourages customers to shop so that they receive points that are redeemable for gifts and shopping.
The authority regulations of the company operations depend on the type of government. This means that if the existing government believes in democracy, it will be easier for the business to operate around the state. A company’s financial statement is, therefore, a direct reflection of its performance. Thus, Starbucks leadership team must ensure the organization meets all the requirements in order to achieve success.
In conclusion, Starbucks as one of the major companies in America specializing in production of coffee and other snacks has to rely heavily on technologies. Moreover, it has enhanced the communication with shareholders and stakeholders. Emerging technologies have helped to facilitate the work of the company. Supporting the point that the customers are always right, their needs and preferences are the priority to Starbucks, which largely considers their tastes, as well as differences in age, religion and other spheres.