Authentic Assessments

They conduct a 20-30 minute in-person store visit to observe, analyze and evaluate operations. This is an opportunity for students to consider how Starbucks (and by extension, all companies, public or private, large or small) must have procedures in place to ensure that all economic transactions are properly recorded to protect their inventory and to prevent theft.

1. When a cashier makes a sale, what accounts are impacted and where does it appear on the financial statement(s)?

2. How do you think Starbucks ensures that all of their products sold are actually recorded in their Accounting records?  For example, could baristas pass beverages over the counter for free? Does there appear to be an accounting for "courtesy" (free) beverages?  Is there any way for cashiers to be able to make sales without recording it in the cash register?   

3. Is it possible for employees to eat and/or drink inventory without paying?  If so, how would this “theft” impact the financial statements? 

4. Did any of the baristas have to throw out inventory because they messed up the order?  How do you think this would impact (or be recorded in) the financial statements?

5. Can inventory be stolen by customers?  If so, what accounts would be impacted and on what financial statements?  Do you see any means for Starbucks to prevent or detect stolen inventory (for example, do they have cameras)? 

6. Do they have the “pick up” area for customers who have ordered and paid online?  If so, is there any way to prevent someone else from taking an order that is not theirs? 

7. Starbucks normally displays its refrigerated inventory openly. What items do you guess have the highest and lowest gross profit margin?  Are they promoting any of their inventory items differently (ie, are they giving prominent space and attention to higher margin items?) 

8. Identify a piece of equipment that you can easily look up after your visit (coffee machine, refrigerator, anything that you can find the brand); what was the cost for Starbucks to purchase the equipment?  If the equipment was being depreciated over a 5 year period with zero residual value, how much Depreciation expense would be recognized?  What would the Net Book Value be after year 1?  This is covered in Lesson 4 and if you pick this it counts as 2 of the 3 items to report (since it requires more work on your part).

They choose a situation with which they have first-hand familiarity, and may have been a major or minor actor in the situation or a witness. The situation should raise ethical and/or legal issues. Students systematically and critically analyze the situation using relevant concepts from the course, and reflect on its significance for them as business professionals. All topics are submitted for professor approval and adhere to specific criteria, as described below. Students structure their papers as follows:

2. • Context: Students describe the context within which the situation arose, including the industry, business practices, and other relevant factors, including team dynamics, personalities, etc. It should be detailed and rich enough to provide a clear sense of the ethical and/or legal dilemma(s) (500-1000 words max).
     
     

   • Analysis: Students analyze the dilemma using course readings. They apply methods of philosophical, psychological, and legal reasoning to the situation and examine the results of this application. Ultimately, what do they think is/was the ethical course of action given the situation? (2000-3000 words).
     
     

   • Resolution & Recommendation: Students should describe how the situation was actually resolved. How does the resolution relate to the analysis? If it was not actually resolved then what are the possible options and the pros and cons of each option? What significance does this dilemma and the response have for the student as a business professional? Finally, how might this dilemma/situation have been avoided or mitigated by better ethical design of the organization?

Criteria for review:

• Evaluation: good performance (hence a good grade) consists of systematically and critically analyzing the situation using relevant concepts and methods from the course, and reflecting on its significance for you as a business professional.

• 3000-4000 words not including footnotes (approx 8-12 pages)

• Cite at least 5 relevant sources from the course materials using footnotes

• Put course concepts in bold

The audit helps identify potential pitfalls or opportunities for development of the brand and to make actionable recommendations on how management could improve by setting priorities with respect to brand strategy development and implementation. Students complete the three main stages of a brand audit: inventory, exploratory, and recommendations. Students submit a progress report, final report, final in-class presentation, and peer evaluations.

3. • Stage 1: Inventory – Students complete a comprehensive summary of their selected firm’s marketing and branding programs. This includes the brand’s position relative to competitors (points of parity, points of difference), understanding the bases of brand equity, and the benefits associated with the brand. It is a basic overview of what currently “is.”
     
     

   • Stage 2: Exploratory – Students identify 1-3 of the biggest branding issues, problems, or potential threats facing the company. These issues should be concrete to ensure that tackling them, i.e., providing recommendations, is focused and doable. At the heart of the exploratory stage is empirical research. Students conduct qualitative research (e.g., interviews or focus groups) and quantitative research (i.e., a survey). They justify the method, explain the method, and present insights from the research (i.e., they shed light on the critical issues faced by the brand - e.g., points of parity vs. difference, true differentiation and its sustainability in the long run, issues of relevance and/or consistency).
     
     

     1. For qualitative research, students conduct either three one-on-one interviews or one 6-8 person focus group. 

     2. For quantitative research, students conduct a survey among a larger number (30+) of their target group. The goal is to learn about the brand associations, brand relationships, sources of equity, etc., possessed by the focal brand. 

Students use the insights from their research to formulate a positioning statement, six-word story, perceptual map, and brand platform (prism, house, etc.) to convey the brand’s ideal positioning with respect to its competitors.

• Stage 3: Recommendations – Based on findings from the inventory and exploratory stages, students develop recommendations on how the brand could be better managed and how to increase consumer engagement. Students are specific in their recommendations: focusing on both the what and how of what brands should consider doing. Recommendations are in line with and build upon previous analysis. Some things that students consider when devising recommendations are the types of initiatives discussed in class and/or mentioned by guest speakers.

Groups are expected to address business and industry analysis as well as deal structure and valuation. Students explain what factors, including business plan elements that would need to change so that an affirmative opinion (including a specific deal structure and valuation) would be offered on a contingent basis.  The requirements are as follows:

4. • Written Report – The report should not exceed 20 double-spaced typed pages with normal margins, excluding exhibits, tables, figures, appendices, and references. The name of the firm analyzed, the names of the team members responsible for the report preparation, the date, and the course number should be on the front page.
     
     

   • Exhibits – Exhibits should contain specific types of analyses, such as financial ratio analyses, breakeven charts, decision tree analyses, organization charts, etc. In general, exhibits should contain any information that is relevant, but would take up too much space if included in the body of the paper. Exhibits should not be used as strictly an extension of textual material.
     
     

   • References – Footnotes should be used to acknowledge sources quoted in the text. The bibliography should list all the sources referenced or quoted in the body of the text in alphabetical order by author.