Strategic planning refers to adoption of all the policies regarding acquisition and disposal of resources required to meet the goal of the organisation. Hence it is a two step process firstly designing the goal or mission and secondly setting out the activities of the resources required by the organisation. Strategic planning is a broader concept. Financial planning is part of this strategic planning. Strategic planning is designed to achieve maximum profit by ensuring cost controls, inventory control, marketing strategy, human resource management, timely supply of inputs, payment to creditors, working capital management and many others.
Hence, we can say by strategic planning a company can achieve its financial goals. One of the strategic planning initiatives of Starbucks is to increase market share by opening of retail store in locations with high footfall and high visibility. This is achieved also through it licensing agreement by aiming at reaching all people where they work, travel, shop and dine. The product offered at each store would depend on customer preferences. In the U. S serving hot food would be primary focus. The company’s management discussion and analysis report describes that the company also committed to close 600 of its under-performing stores.
Of this 205 were closed in the fiscal year 2008 and the balance would be closed in fiscal year 2009. Further, the company closed 61 of its own operated stores in Australia. All these initiatives follow the strategic initiative of having stores in location with high footfall and high visibility only and therefore existing stores in any other location should be closed. The company has identified that closure of these stores would result in savings of $200m to $210m in the fiscal year 2009.
Starbucks Corporation, Form 10-K filed with US SEC for the fiscal year ended September 28, 2008
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