Financial Analysis and Funding Plan - Starbucks Cont..

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I have attached the other papers you have written this term pertaining to Starbucks and the business idea to incorporate lounges there. Please be sure to have no less than 5 scholarly citation sources.

In Milestone Four, you will submit a financial analysis and funding plan, which includes your analysis of the projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point. Be sure to include a budget, an assessment of assets and liabilities, your anticipated sources of funding, and the associated costs of attaining that capital as part of your analysis. Support your analysis with relevant primary and secondary data in an appendix, specifying any relevant assumptions and limitations. You should include, among other support, sales forecasts, cash flow statements, income projections, and any other relevant calculations or financial reports. Critical Elements: Analyze the projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point.  Include the following as part of your analysis: o Budget o Assessment of assets and liabilities o Anticipated sources of funding o Associated costs of attaining that capital  Include relevant proforma financial reports: o Sales forecasts o Cash flow statements o Income projections o All other relevant reports specific to your concept or idea Guidelines for Submission: Your draft must contain all of the elements listed above. It should be 5 to 8 pages in length (excluding the title page, references, and appendices) using 12-point Times New Roman font, with one-inch margins. You may include summary pictures, charts, graphs, or other explanatory diagrams as needed to successfully explain the concept and implementation, but should use appendices for detailed supporting documentation. Your paper should follow APA guidelines. You must include at least 5 scholarly sources. Cite your sources within the text of your paper and on the reference page.

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MBA 705 Milestone Four Guidelines and Rubric Overview: For the capstone assessment, you will create a business implementation plan and audiovisual presentation for the product, service, or idea you have been developing throughout your MBA coursework. In Milestone Four, you will submit a financial analysis and funding plan, which includes your analysis of the projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point. Be sure to include a budget, an assessment of assets and liabilities, your anticipated sources of funding, and the associated costs of attaining that capital as part of your analysis. Support your analysis with relevant primary and secondary data in an appendix, specifying any relevant assumptions and limitations. You should include, among other support, sales forecasts, cash flow statements, income projections, and any other relevant calculations or financial reports. Critical Elements:  Analyze the projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point.  Include the following as part of your analysis: o Budget o Assessment of assets and liabilities o Anticipated sources of funding o Associated costs of attaining that capital  Include relevant proforma financial reports: o Sales forecasts o Cash flow statements o Income projections o All other relevant reports specific to your concept or idea Guidelines for Submission: Your draft must contain all of the elements listed above. It should be 5 to 8 pages in length (excluding the title page, references, and appendices) using 12-point Times New Roman font, with one-inch margins. You may include summary pictures, charts, graphs, or other explanatory diagrams as needed to successfully explain the concept and implementation, but should use appendices for detailed supporting documentation. Your paper should follow APA guidelines. You must include at least 5 scholarly sources. Cite your sources within the text of your paper and on the reference page. Critical Elements Main Elements Critical Thinking Financial Analysis Proficient (100%) Includes most of the main elements Provides logical conclusions and defends with examples Provides an analysis of projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point Not Proficient (0%) Does not include any of the main elements Does not provide logical conclusions Does not provides an analysis of projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point Value 20 20 15 Analysis Parts Financial Reports Articulation of Response Provides a budget, an assessment of assets and liabilities, anticipated sources of funding, and the associated costs of attaining that capital as part of the analysis Provides proforma financial reports including sales forecasts, cash flow statements, income projections, and other relevant reports specific to concept or idea Submission does not have critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas Does not provide a budget, an assessment of assets and liabilities, anticipated sources of funding, and the associated costs of attaining that capital as part of the analysis Does not provide proforma financial reports 15 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas Total 15 15 100% 1 Running Head: MBA 705 Milestone One MBA 705 Milestone One xx xx xx February 25, 2018 2 MBA 705 Milestone One Idea/Concept – Introduction of private lounges at Starbucks. Rationale Starbucks has built its brand to provide not only coffee and other food items but also an ambient environment where the customers can get to enjoy their time. Introducing private lounges gets to improve the ambiance provided by providing a private space for customers looking for a more private area for them to hang around. Starbucks also prides itself in providing a unique interaction for each of its customers. This often happens when customers get their drinks from the baristas and move onto the tables. However, having a private lounge will allow customers to get a private area where they can share private time with the company they are with. Having private lounges will be beneficial to Starbucks as it increases then niche clientele that is that will be available to Starbucks. It is mainly targeted at people looking to hold business meetings at a casual place as well as people getting together to enjoy quiet time while also enjoying the ambiance provided at Starbucks. The lounges are a good marketing concept for Starbucks as they help in bringing in large groups of people at the same time thus enhancing the number of sales. Problem Addressed Too many people and noise - Starbucks has grown over the years attracting more and more clients as a leader in the coffee cafe industry. The company has however been able to maintain their ambiance and provide the customers with a good environment to have the coffee. However, one setback that the company faces is their nosiness in the cafes due to having many clients at one time. Other than that there is also a lot of movement as other clients get to pick their coffee or drinks and snacks to-go which may present a distraction for other clients. This is often not a 3 MBA 705 Milestone One problem for many clients however there are those who are looking for a quiet time or a space to do some of their work or hold meetings without interruptions. The private lounges help deal with this problem ensuring that clients can enjoy the services offered by Starbucks in an environment that is conducive to their needs. Opportunity Customer service- Private lounges offer a chance for customers to get direct customer service from the staff. This is a good opportunity for the company to increase customer loyalty as according to Jahanshahi, Gashti, Mirdamadi, Nawaser, and Khaksar (Jahanshahi, Gashti, Mirdamadi, Nawaser, & Khaksar, 2011), customer service is directly related to customer loyalty. As such it is more likely that Clients who get to enjoy the premium services offered at private lounges are more likely to become loyal to Starbucks. The loyalty is gained not only from the products provided but also from the satisfaction with the services offered. Starbucks already offers good customer service o clients. This is however detached as a point of contact is mainly through the baristas as one gets their order. The lounges thus provide a better chance for direct customer interaction. Premium clients - private lounges offer Starbucks an opportunity to take advantage of premium clients as different people look for areas where they can be able to enjoy delicacies and beverages that are used to without having to give up the brand. This is also an opportunity for the company as having private lunges will involve getting clients to pay more for the premium services which will eventually increase the sales made. As explained by Gustaffsson, Johnson, and Roos (Gustaffsson, Johnson, & Roos, 2006), companies should move from customer 4 MBA 705 Milestone One satisfaction to relationship development with the client, and the private lounges offer Starbucks a chance to engage in relationship development. Market The niche market targeted by private lounges is premium clients. This includes clients who are willing to pay extra to be able to access the private lounges as well as clients who are looking for additional services from Starbucks aside from those normally provided with one's order. It also targets business people who are not willing to operate from offices or official premises and people looking to have meetings and other consultations in a casual area. The lounges also target people looking for privacy and time alone from all the noise from other clients. It also mainly targets high-end clients who can be able to make Starbucks a meeting point and a place to spend time. The article on ‘Delivering value to customers’ expounds on the idea that to get clients to move from one service to another, the producer needs to provide them with surplus value (Golub et al., 2000). This is provided through the private lounges. The market target is clientele who need the surplus value provided. Competition The key features that set the service apart include; Privacy - the lounges provide a casual area that is also private which allows different people to enjoy the ambiance of Starbucks without the distractions of all the clients. More serene environment - the lounges are designed to provide a most serene environment for clients who further promotes the Starbucks brand. This includes a more cozy setting that allows for relaxation for people looking to spend more time at the Starbucks café. 5 MBA 705 Milestone One Complementary options for loyal customers - customers who frequent the private lounge will get to be able to get complimentary options as a reward for their loyalty. This is aimed at further increasing their loyalty as well as fostering a better relationship with them in future. Premium service - the private lounges will allow customers to be able to enjoy premium services such as personalized customer service where rather than getting their orders from the baristas they can get waiters who can personally serve them to the satisfaction. Other premium services will include faster Wi-Fi as opposed to Wi-Fi normally used which may slow down due to having many users at a time. Such improved offers are aimed to further the experience that is normally offered at Starbucks cafes for regular clients. Company Starbucks aims to provide the best quality coffee. The company is passionate about ethically sourcing the finest coffee beans as well as using great care in roasting them and in improving the lives of the people who grow them. The company also aims to engage, connect with fully and uplift the lives of its customers even if it is only for a few moments (Starbucks, 2018). Private lounges thus aim to increase the moments that are available between the client and the company representatives, i.e., the stuff to ensure that the company can further engage with the clients thus increasing the level of customer service offered. The company also uses its tools to provide customers with a sense of belonging and a haven where the customers can be able to break away from life worries. It aims to provide enjoyment for the different speeds of life and to provide a feeling of humanity. The private lounges will serve to further this purpose by ensuring that clients can enjoy their time spent at the store to the maximum due to the different premium services offered at the private lounges. 6 MBA 705 Milestone One Innovation Private lunges are innovative for Starbucks as they provide a chance for the chain store to provide premium services to high-end clients as well as other clients who are willing to pay for it. Most chain companies often focus on providing services to the regular customer. This normally allows the company to grow as this is a wide niche market. Private lounges are however innovative as they allow such companies to further expand their market reach to people who wouldn’t otherwise go to the stores or cafes without them. This can be used as a marketing tool for the company to be able to garner a larger percentage of the market. The café industry has also been affected by online retailing. Starbucks has been able to take advantage of this by introducing an online ordering and delivery service. The Starbucks app is mainly used and accounts for about a quarter of the company’s orders (Bhagwandin, 2017). This sector is growing, but it also means that fewer clients are frequenting the cafes than before. Private lounges for Starbucks are innovative in addressing this issue as they have provided a solution to attract more clients to the cafes. 7 MBA 705 Milestone One References Bhagwandin, S. (2017, November 19). Starbucks App UX Analysis: Coffee, Lattes, & Loyalty. Retrieved from Business 2 Community: https://www.business2community.com/mobileapps/starbucks-app-ux-analysis-coffee-lattes-loyalty-01957628 Golub, H., Henry, J., Forbis, J. L., Mehta, N. T., Lanning, M. J., Michaels, E. G., & Ohmae, K. (2000, June). Delivering Value to Customers. McKinsey Quarterly. Gustaffsson, A., Johnson, M. D., & Roos, I. (2006). The effects of customer satisfaction, relationship commitment dimensions, and triggers on customer retention. Journal of Marketing, 210-218. Jahanshahi, A. A., Gashti, M. A., Mirdamadi, S. A., Nawaser, K., & Khaksar, S. M. (2011). Study the Effect of Customer Service and Product Quality on Customer Satisfaction and Loyalty. International Journal of Humanities and Social Science, 253-260. Starbucks. (2018, January 20). Our Starbucks Mission Statement. Retrieved from Starbucks: https://www.starbucks.ca/about-us/company-information/mission-statement 1 Running Head: MBA 705 Milestone Two MBA 705 Milestone Two xx xx xx February 25, 2018 2 MBA 705 Milestone Two Physical and technological resources The physical resources required include; Lounge space - the space should be in a secluded area in the cafe where users can be able to get privacy away from the noise of the other customers. However, individual stores should ensure that space used to create private lounges does not leave the regular customers in spaces that are congested as this will diminish the company's brand name. The aim is to promote the company's brand name by improving the good ambiance and cool environment already provided at Starbucks. Lounge furniture - the furniture should be cozy and should help in creating a serene environment where clients can be able to relax and interact with each other. Lounge chairs with long back support are preferable as they help in creating a barrier between different customers hence ensuring privacy. The furniture should also be arranged in a manner that allows the different clients to be able to gain privacy from each other. This differs from the regular furniture as the regular setting is an open plan setting which has minimal privacy Environment – This concept is based on the basis of providing clients with a quiet place that has privacy where a person can unwind while having their order. The environment created needs to be quiet and not visible to prying eyes to present a feeling of serenity and tranquility. This can be promoted further through the use of different decorations and designs. The technological resources include; Wi-Fi setup - this concept involves setting up a Wi-Fi that differs from that used by the regular clients. There are no extra charges incurred with this regard as the Wi-Fi used is similar to that 3 MBA 705 Milestone Two used in the regular mode only that the private lounge gets a separate username to ensure that the clients can access faster Wi-Fi as there are few. This strategy is aimed at people looking to conduct official business at Starbucks as the Wi-Fi will be reliable regardless of traffic at the café at that time. The speed of Wi-Fi available is also a crucial factor as it clients prefer a place whether they are able to access online sources easily. This strategy can also be used as a marketing tool to get more people to be interested in the product. App resources - Starbucks has developed an app that allows customers to place their orders as well as to make their payments online. This has allowed for efficiency in order processing as the mode of payment is included in the app. The app is intuitive and easy-to-use with customizable customer options that allow the user to save orders that they like to favorites. It also has a reward system that is used to reward loyal customers (Hospitality Technology, 2016). All these features can also be customized to apply to private lounge uses to enable them to take advantage of the rewards system as well as the efficient ordering and payment system thus allowing them to enjoy the full service offered by Starbucks. Using the pre-existing app will be cost-effective for the company as opposed to creating a different app for the private lounge uses. Featuring the private lounges in the Starbucks app will also be beneficial as a marketing tool for clients who have not had a chance to visit the stores and see the private lounges available. They will also be able to see all the services offered at the private lounges from the apps which may increase the chances of visiting the cafes to be able to enjoy the new services. The number of app users has increased in general from previous years. There has also been a significant increase in the number of people using the Starbucks app thus increasing its efficiency as a marketing tool and operating tool for the new concept. This is shown in image I and II 4 MBA 705 Milestone Two Image I Source: (Meola, 2016) Image II Source: (Meola, 2016) 5 MBA 705 Milestone Two Implementation schedule Identification of private lounge services to be offered - The different cafes that will be offering private lounge services will participate in the identifications of the services to offer depending on the region located to ensure that services offered cater to the needs of that region. This will ensure that the different options chosen can be marketable to the clientele available in that area. Setup of private lounge booths - The individual cafes will be responsible for the setup of the private lounges. Starbucks cafes offer a feeling of ambiance to the clients. Different factors are normally considered with regard to the creation of ambiance in each cafe. Research in each cafe will be responsible for the creation of the private lounges to ensure that they are able to Customize the lounges such that the environment is serene based on client needs in the area. Wi-Fi setup - Each cafe has a different Wi-Fi setup which needs to be customized in order to include the new clients that'll be visiting the cafes. As such, each cafe will analyze to determine whether their Wi-Fi currently in use is sufficient to also cater for the private lounge or whether they require an increase or a revision of the wifi provisions to accommodate the private lounges. This will be based on their projections with regard to the number of new clients to be acquired through the private lodges. App setup - The app setup will be done through the Starbucks it department. The details to be included are; the cafe locations offering private lounges; the services offered in the respective cafe lounges; and the charges and modes of payment in the different private lounges. The overall Starbucks IT department is preferable as the app is used by people from different regions. The shared platform reduces costs for the company with regard to advertisement and marketing. 6 MBA 705 Milestone Two Project review process The estimated project setup time is three months where all the four processes; identification of private lounge services to be offered; setup of private lounge booths; Wi-Fi setup; and app set up, should be completed before the start of the use of the lounges. Individual cafes are to cater for the setup in their cafes. Indicators of success include a 20% increase in the number of clients who visit the different coffee cafes that have private lounges. Other than that there should also be a 15% increase in the total sales in the cafes within the first 3 months. The profit margin is projected to increase after the first three months by 10% in the cafes. The lounges aim to help increase the number of people visiting the cafes. As such the measure of success will be to look at the rate of traffic in the cafes to determine if there is an increase that is due to the lounges. Intrapreneurship Businesses often engage intrapreneurship ideas as it is an efficient way to deal with a bottom line. It is often aimed at increasing the market share and profits for the company, to assist in the recruitment and retainment of the best employees as well as the development of new products and services to increase sales for the company (Klemchuk, 2014). The development of private lounges at Starbucks cafe thus fits into this description as it helps in increasing the market share for the company which transforms into profits. It is also a development of a new product and service for the Starbucks company and in essence, helps in increasing sales for the company thus contributing to the bottom line. The concept of a Starbucks private lounge can be protected through the establishment of a wide internet presence. E-commerce is a large part of advertising and sales for the Starbucks Company 7 MBA 705 Milestone Two establishing an internet presence will be extremely valuable for the company as it will help in marketing the new service offered at the cafes. This will include the registration of a domain name, search engine optimization, and frequent monitoring for infringement. By establishing an internet presence, we will be able to establish or enhance the Starbucks brand name to include the service of private lounges and the serene environment that is offered as an accompaniment to the lounges. 8 MBA 705 Milestone Two References Hospitality Technology. (2016, April 15). Starbucks Redesigned Mobile App Features More Interaction and Personalization. Retrieved from Hospitality Technology: https://hospitalitytech.com/starbucks-redesigned-mobile-app-features-more-interactionand-personalization Klemchuk, D. (2014, July 15). Why Protecting Intellectual Property Is Crucial to Business Success on 5 Counts. Retrieved from Entrepreneur: https://www.entrepreneur.com/article/235467 Meola, A. (2016, June 13). Starbucks' loyalty program now holds more money than some banks. Retrieved from Business Insider: http://www.businessinsider.com/starbucks-loyaltyprogram-now-holds-more-money-than-some-banks-2016-6?IR=T Meola, A. (2016, April 4). Starbucks plans to spend even more to improve its mobile app. Retrieved from Business Insider: http://www.businessinsider.com/starbucks-mobile-appproves-successful-marketing-strategy-2016-4?IR=T Starbucks. (2018, January 20). Our Starbucks Mission Statement. Retrieved from Starbucks: https://www.starbucks.ca/about-us/company-information/mission-statement 1 Running Head: MBA 705 Milestone Three MBA 705 Milestone Three X 2 MBA 705 Milestone Three The introduction of private lounges at Starbucks is in line with the company's competences as it avails the company with an opportunity to offer more premium services to its clients. Starbucks has always aimed to provide clients with the best products and services, and the private lounges will ensure this commitment is met. Starbucks Core Competencies The core competence of Starbucks has been in its ability to offer a premium mix of high-quality products in particular snacks and beverages. This has enabled the company to leverage its different product differentiation strategies effectively. The brand name Starbucks is built on various factors; selling the best quality coffee and other products; ensuring each customer enjoys the unique Starbucks experience; providing clean and well-maintained stores that embody the culture of the community they are operating in; and providing supreme customer service. All these strategies are implemented to ensure customer satisfaction and customer loyalty (Geereddy, 2014). Other core competencies that are crucial to the Starbucks brand include the human resource values implemented by management as well as the efforts put into establishing strong external and internal relationships with the company's suppliers. The company also focuses on establishing and maintaining alliances and smart acquisitions that are aimed at fostering its strategy of organic of expansion into the international markets as well as strengthening its longterm objective to become the most respected brand in the world. Introducing private lounges at Starbucks fits into the company's core competencies in various ways. For starters, it helps in promoting the quality of products available at Starbucks and also ensures that the customers get to enjoy their unique Starbucks experience. Starbucks not only sells coffee and snacks; it uses the ambiance created in their stores to help promote these 3 MBA 705 Milestone Three products. The private lounges will thus help customers who are looking for privacy to be able to enjoy the premium customer experience available at Starbucks in an environment they feel comfortable in. This is mainly to accommodate clients who may feel that the open space where other tables are available is not comfortable for them. It is mainly targeted at people looking to hold business meetings at a casual place as well as people getting together to enjoy quiet time while also enjoying the ambiance provided at Starbucks. As such introducing private lounges get to improve the ambiance provided by providing a private space for customers looking for a more private area for them to hang around. In essence, the private lounges provide the variety concerning how different customers choose to enjoy the supreme customer experience that is available at Starbucks. Other than that Starbucks prides itself in the providence of clean and well-maintained stores that embody the culture of the community. The private lounges will further promote this by ensuring that they are designed to further depict the culture of the community and to accommodate the cultural diversity that is available in the different communities. Corporate Culture The best corporate culture to support new project idea for Starbucks - implementing private lunges for customers involves some features; 1. Employee based approach - the private lounges will provide interactions between customers and the staff who are mainly the low-level employees. As such the success of the project requires employees interacting with customers who have and share in the core values and the mission of the company. This requires management that is invested in ensuring the satisfaction of the employees. Starbucks is best suited for this as its organizational culture is based on servant 4 MBA 705 Milestone Three leadership. In this instance, the managers, leaders and the supervisors emphasize on supporting their subordinates to make sure that every employee in the company has a chance to grow. The employee first approach is mainly based on the management’s belief that employees who are cared for in turn care for their customers. This is especially necessary for the implementation of the private lounges as it is based on the providence of premium customer service to clients. Having employees who are well cared for will ensure that they can provide excellent customer service to their clients. 2. Relationship driven approach - one of the aims of implementing the new private lounges idea is to help in growing customer loyalty to Starbucks. To get repeat customers, it is essential for employees to be able to establish a relationship with the client. Starbucks culture supports the establishment of warm and friendly relationships. This is established in the different interactions observed between the employees (FERGUSON, 2017). This corporate culture has been seen to extend to the employee's interactions with clients. The emphasis on relationships is crucial to the implementation of private lounges as it helps in increasing customer satisfaction and ensuring customer loyalty as a bond is created between the company and the clients through the employees. 3. Communication and collaboration - Any role that involves the providence of direct customer service require efficient communications and collaboration among the workers. Suitable corporate culture has structures set in place that ensure this is possible and can be done efficiently. Starbucks has the ‘teams’ structure which is specially formulated to foster collaboration and communication. The teams’ structure is common to the low-level employees. It is used to organize the teams for delivery of goods and services to clients (MEYER, 2017 ). 5 MBA 705 Milestone Three Key Roles, Responsibilities, and Qualifications The team required for the implementation of the project include marketing personnel, finance personnel, human resource personnel, the design personnel and management Marketing personnel The private lounges at Starbucks are a new concept that needs to be marketed to the potential clients. The marketing department core responsibilities will be to identify the niche clientele and sell the idea to them. The niche market targeted by private lounges is premium clients. This includes clients who are willing to pay extra to be able to access the private lounges as well as clients who are looking for additional services from Starbucks aside from those normally provided with one’s order. This includes business personal looking for meeting areas and clients looking for privacy. Finance personnel The finance personnel is responsible for the profitability assessment. Their main role is to determine the number of lounges that will be profitable for the stores. The assessments are to be done in individual stores as the number of niche clientele available differs. The assessment will include an analysis of the costs of the new lounge areas and the potential returns for the stores based on projected income to be gained from the lounges. Human resources personnel The human resources personnel include the staff that will be responsible for providing customer service o clients who opt to use the lounges. This includes cleaning personnel and the waiting staff. Human resources personnel are crucial to the project as they provide the first point of 6 MBA 705 Milestone Three interaction with the clients at the lounges. The aim is to ensure the clients get to enjoy premium services all round. As such, the personnel needs to understand the core values and the mission of the company and the project to ensure the clients enjoy the premium customer experience. Gustaffsson, Johnson, and Roos explain the need for companies to move from customer satisfaction to relationship development (Gustaffsson, Johnson, & Roos, 2006). The human resources personnel will thus be focused on their main responsibility which will be establishing, building and maintaining a relationship with clients to encourage customer loyalty. The personnel will require members who can handle premium clients and provide premium services without overindulging the customers. Design personnel Starbucks has stores in many states all of which have varied cultures. The design department will be responsible for ensuring that the lounges are designed to promote cultural diversity. As the different stores operate within different cultures, the designs will be customized to the cultures that are part of the community the individual stores are at. This is not only aimed at promoting inclusivity among clients but also among employees. This will also foster relationship building among employees as well as clients as the ambiance created provides for the inclusion of all cultures. This requires a designer who is conversant with the cultures of the different communities and how they can be incorporated into the design. Café management As part of the café management, my role will be to ensure that the implementation of the lounges is efficient by ensuring a smooth process. This will include overseeing the construction and development of the lounges through contracting construction personnel, supervision of the 7 MBA 705 Milestone Three process, getting customer views and employee views and ensuring that issues raised concerning the project are looked into. Contingency Plan Human resources personnel – to deal with shortcomings with regard to staff handling clients opting for the lounges, training are to be done for all staff who are in direct contact with clients. The pieces of training will include concepts such as customer services as well as the different services to be offered to the new clients. This will also include how to handle difficult clients and all scenarios that may arise pertaining to clients who opt to sit in the lounges. This will ensure that, in cases where staff designated to serve clients in the private lounges are not available, other baristas can step in. Café management – The supervisory role of the management at the cafes is to be undertaken by the manager and the assistant manager. This will ensure that there is always personnel available to help in ‘in time' decisions that may be required which would otherwise bring the project to a halt. Design personnel – the design personnel should work closely with marketing, finance and café management to ensure that all aspects of the design meet marketing requirement and are approved by finance department to be cost-efficient. All personnel should keep detailed records to help in transition in case there is a change in the team composition. Detailed records will help new team members to easily take up the roles and continue with the project development. The contingency plan is designed to ensure that the project continues smoothly even with new team members should the team composition need to be modified. 8 MBA 705 Milestone Three References FERGUSON, E. (2017, January 31). Starbucks Coffee Company’s Organizational Culture. Retrieved from Panmore Institute: http://panmore.com/starbucks-coffee-companyorganizational-culture Geereddy, N. (2014). Strategic Analysis Of Starbucks Corporation. Scholar Harvard. Retrieved from https://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf Gustaffsson, A., Johnson, M. D., & Roos, I. (2006). The effects of customer satisfaction, relationship commitment dimensions, and triggers on customer retention. Journal of Marketing, 210-218. MEYER, P. (2017, JAN 31). Starbucks Coffee Company’s Organizational Structure. Retrieved from Panmore Institute: http://panmore.com/starbucks-coffee-company-organizationalstructure Starbucks. (2018, January 20). Our Starbucks Mission Statement. Retrieved from Starbucks: https://www.starbucks.ca/about-us/company-information/mission-statement
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Outline of the Paper
MBA 705 Milestone Four (Financial Analysis and Funding Plan)
A. Projected Costs
1. Initial cost of installation
2. Labor and Training
B. Revenue Streams
C. Net Present Value
D. Anticipated sources of funding
1. Asset financing
2. Profits from the previous year
3. Debt
E. Costs of funding
1. Retained profits
2. Asset financing
3. Debt
F. Proforma Financial reports


1
Running Head: MBA 705 Milestone Four

MBA 705 Milestone Four
Name
Instructor
Institution
Date

2
MBA 705 Milestone Four
Financial Analysis and Funding Plan
Projected Costs
The projected costs for the project include costs of the initial installation, labor as well as
training for the staff. Other costs include costs for internet provision and maintenance of the
private lounge areas.
The initial cost of installation – For this project, the initial cost of implementation is the highest.
It includes costs of lounge chairs and tables; Costs of new utensils to be used by clients visiting
the lounge areas; costs of construction or installation of the chairs; and costs of
designing/decorating the lounge areas.
The table below shows the initial costs for the implementation of the project. The costs are to be
incurred in the first month of implementation.
Items
Lounge chairs and tables
Utensils
Construction
Design/Decor

Costs
$50,000
$5000
$20,000
$10,000
$85000

Labor and Training – The private lounges to be offered to seek to differentiate Starbucks drinks
and beverages offerings by providing premium customer service. Rather than clients getting their
drinks, they get to be served the drinks and the snacks according to their liking. This is aimed at
attracting more clients and maintaining and improving the quality of customer loyalty. As such,
the private lounges will require baristas to serve the coffee and snacks as well as training for the

3
MBA 705 Milestone Four
staff. Each café requires three baristas to work in the private lounges. The table below shows the
costs about labor and training.
Item
Barrister per month
3 baristas total
Cost of training

costs
$3000
$9000
$8000

Other costs – Other costs include marketing costs. The new concept to be implemented requires
marketing to the different targeted groups to ensure that the niche market is aware of our product
offerings and the different benefits associated with using the private lounges. The ma...


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