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Unit 1 - Exploring a Business P1 - Explain the features of 2 contrasting businesses
- Institution
- PEARSON (PEARSON)
Ownership info, advantages and disadvantages, aims and objectives, and reasons for business success.
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P1. Explain the features of two contrasting businessesBusiness 1 (Profit Making) - Starbucks
Starbucks first originated from America, as a coffee company
and coffeehouse chain. Starbucks has stated that their main
purpose is “To establish Starbucks as the premier purveyor of
the finest coffee in the world while maintaining our
uncompromising principles while we grow.”, and "To inspire and
nurture the human spirit — one person, one cup and one
neighborhood at a time.". Their overall goal is making profit
through sales of the company. The profit of Starbucks in 2018
was $24.72 billion, which then increased by $1.79 billion in
2019, resulting in $26.51 billion. The number of employees stated currently present in 2019
was 346,000, an estimated amount of 17% increase from 2018, as it is widely known that
Starbucks focuses on their employees and the benefits they accomplish from their work.
Ownership
Starbucks is a public limited company; they sell and trade their shares to the public and
audience in order to raise capital/revenue and have limited liability.
Advantages and Disadvantages
One advantage of a public limited company is the ability of raising revenue/capital through
external shares/investors that may want to have a share/invest in the company. In
comparison to private limited companies, public limited companies such as Starbucks, are
able to gain more capital, allowing them to have more funds to fulfill their needs as a
business known worldwide. Another advantage may be that, as shares are spread through
many investors, any risk is spread out to every investor, allowing potential for growth and
expansion, to pursue products and projects, and most importantly pay off debts.
However, some disadvantages such as an owner losing control over their own business, due
to a shareholder/investor has bought a large number of shares. This may cause the owner to
focus most of their attention to ease the expectations of shareholders/ investors, instead of
helping the growth of the company. This may cause many delays in the expansion of the
company, which was the original plan of the company. Another disadvantage may be the
strict regulations brought in by the London Stock Exchange, staying on date with these
regulations is very hard as it requires you to check them on a daily basis, and you must
adhere to their strict conversations and requirements. This may also result in a delay of the
businesses idea of forming a public limited company, as they require various legal
requirements every day.
, Type of Liability & Impact on Starbucks
PLC - Public Limited Company, the company would benefit from liabilities as it is a small
company. This means that if the company/business we’re to be in debt, the owners,
members and partners wouldn’t be at risk of the assets being taken as a statement of
repaying their debt or as a payoff for the debt.
The debts would be paid off with the purchase of stock the business offers, the stock is also
seen as an asset of the company. Other assets such as equipment and machinery are also
known to be assets of the company, these can be repossessed in cases of the company’s
insolvency.
Size & Scope
As previously mentioned, in 2019, Starbucks had a number of 346,00 employees worldwide,
working in over 30,000 locations in more than 30 countries, including China, Japan and the
US being the highest amount of stores located in. In 2019, Starbucks revenue was noted to
a total of $26.52 billion, and the amount of revenue has increased over years, from
2016-2019, and I can conclude that Starbucks is a large international business.
Starbucks was originally founded in 1971, by Gordon Bowker, Zen Siegel & Jerry Baldwin, n
Seattle, United States. During this period, coffee sales decreased, however sales of
speciality coffees increased. The original founders of Starbucks opened 6 stores in Seattle
and this attracted the attention of many. The first expansion located outside the US was in
Japan, Starbucks was quickly becoming an international coffee house, many people were
noticing the large amount of attention the coffee house was receiving.
Starbucks Sectors
Out of all 3 sectors (this being primary, secondary and tertiary) Starbucks has managed to
place themselves in all 3 sectors successfully.
- Primary
Own land owned, to grown crops such as coffee beans
- Secondary
Purchasing ingredients such as sugar, milk and many others, for the produce of products
such as lattes, americanos, flat coffees and many more.
- Tertiary
Through the purchase of ingredients, this gives the employees opportunities such as offers
of goods and services to sell to the customers.
Starbucks is also a part of the private sector, it is owned and controlled by groups of
individuals rather than the government. One of Starbucks purposes would be to make a
profit through their sales, meaning that Starbucks is a profit making business.
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