Question 11 (demand). For Starbucks, price increases throughout the company's history have already deterred the most price sensitive customers, leaving a loyal, higher-income consumer base that perceives these coffee beverages as an affordable luxury. Since their loyal following is not especially price sensitive, Starbucks coffee maintains a fairly _and a small price increase can have a huge _impact on their margins without decreasing demand for beverages. a. Inelastic demand curve; positive. b. Elastic demand curve; negative. c Horizontal demand curve, neutral. d. Vertical demand curve; detrimental. Question 12 (Competition). Starbucks's primary competitors for coffee beverage sales are: Hint: what type of businesses? Question 13 (Employees). For Starbucks, based on 2014 data, approximately what percent of total worldwide employees are employed outside the United States? Question 14 (Risk). For Starbucks, one of the risk factors mentioned in the report is. Read about Risk Factors in their Annual Report. Question 15. Based on Starbucks's 2014 Annual Report, which of the following statement is correct? 2. Under the licensing/franchising arrangement, Starbucks receives a reduced share of the total store revenues, but this is more than offset by the reduction in its share of costs as these are primarily incurred by the licensee/franchisee. b. Starbucks share of revenue in its EMEA segment is more than the Americas segment. Incidents involving food-bome illnesses, food tampering or food contamination cannot harm Starbucks's business in a significant way. d. None of the statements are correct. Question 16 (current yield). Suppose Starbucks issued some corporate bonds with a face value of $1,050 per bond. Suppose you purchased one bond and paid $900 for it. Assume you get $75 annual coupon payment. What is the Current Yield for your bond? Note: Just like some of the other questions, this is a hypothetical question and the answer is not in the Annual Report! Question 17 (Business Ethics). All organizations, large and small, including Starbucks must comply with the new law known as_ This bill or law was enacted in 2002 as a reaction to major corporate and accounting scandals involving Enron. WorldCom, Tyco, and other companies. Hint: The law was passed because of the unethical accounting practices some companies were involved with. Question 18 (Human Resource Management). Based on Starbucks's Annual Report, we don't have enough information on the company's staffing practices and policies. Let's assume each segment of Starbucks Corporation manages human resource issues on a local basis. A local employee heads a subsidiary because headquarters' managers are not considered to have adequate local knowledge. In human resource management literature, this approach is known as the Question 19 (company outlook). Which statement is correct? (a) Starbucks posted an operating loss in FY2013 and the main reason for that is due to a litigation charge of approximately $2.8 billion to Kraft Foods forterminating an agreement with them. This charge is treated as an extraordinary event and therefore should be discounted from the overall healthy operational performance of Starbucks. (b) Starbucks does not have growth opportunities in Tea and Fresh Juice products mix, so no need to waste resources to build up these products along the same line of their core coffee products. (c) Coffee beans are a significant input into the Starbucks value chain and the market prices of high quality coffee beans have been quite stable in recent years. So, there is no urgency to adopt an effective hedging strategy to lock-in prices and control future costs. (d) None of the statements are correct. Question 20. Which of the following statement is correct? (a) Starbucks has made some key acquisitions such as Teavana (Tea products), Bay Breads (premium bread products), Evolution Fresh (fresh juice products), etc. to use the diversification strategy. (b) Starbucks has a significant geographical presence across the globe and maintains a 6.7% market share in the United States and has operations in 9 countries. (c) The emerging markets of Brazil, India, China, South Africa, and Mexico have a growing middle-class population but yet to show significant demand for coffee as a daily beverage. (d) None of the statements are correct. Question 21. Suppose Starbucks makes all pastries, muffins, and cookies in-house rather than buying these items from a bakery supplier. This strategy is known as what? Question 22. Starbucks stock is traded in which stock market and what is the stock ticker symbol? Question 23. Earnings per share (EPS) in 2013 decreased to $0.01 compared to 2014 and 2012 when the EPS were $2.75 and $1.83, respectively. What was the reason behind this sudden drop in EPS in 2013? Question 24. Starbucks is not a typical example of monopolistic competition when it comes to advertising expenses. Why? a. Compared to other companies of the same size, Starbucks spends very little on advertising b. Compared to other companies of the same size, Starbucks spends a lot on advertising. c. Starbucks equates marginal revenue with marginal cost to maximize profits. d. None of the choices are correct. Question 25. (Corporate Social Responsibility). A brief statement about the company's global responsibility and commitment can be found on which page of the report