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One benefit + an evaluation

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The benefit of sales forecasting would be to avoid impact caused by demand change. This is due to the expected growth in sales globally and in China. Thus, Starbucks will need to hire more employees to cope with the workload to reduce the chances of Starbucks to be blindsided by the increase in demand. This results in Starbucks having enough manpower to help with the increased demand so there will be no shortage of staff during times of emergencies like a huge surge in demand due to a new drink being introduced. Customers will also be satisfied recieving their drink quickly without having to queue for a long time.

However, the use of sales forecasting might not be precise due to external factors like the social factor. Due to aging population, many elderlies do not consume Starbuck's beverages like the caramel Frappuccino due to its high sugar content. This results in reduced demand for Starbucks and can lead to a decrease in sales performance.

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one possible benefit is that Starbucks is able to minimise impacts caused by a sudden demand change. through sales forecasting, Starbucks is able to better prepare themselves to respond to changes rather seamlessly without much impact on their work which can be done through research and data on prior sales results. through data given they are better able to figure out on how to organiseamd prepare their resources accordingly in response to demand changes. As such through this, they are well equipped to adapt fast and able to reduce incurring expenses such as maintenance expense as they already know what, when and how to utilise their resources. An example could arise when Starbucks could hire more part time staff during school holiday month as there are likely more consumer available to buy from them. as such they are fully utilising their resources.

However, that being said. a limitation could be the data that Starbucks is using may be too outdated. if Starbucks depends on historical data too much, they may not be fully prepared as taste and preferences can change drastically over time. the data they used may not be relevant right now as much as they at the time of recording.. this would leave Starbucks unprepared and increase expenses through things such as hiring too much staff out of panic.

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One benefit of sales forecasting is that it allows Starbucks to think ahead about how it plans to monitor and track sales for the future. By doing so, the management of Starbucks can make decisions on their strategies like ensuring they have enough stock to meet the rise in demand of between 5% to 7% for their drinks and for the pastries they offer, through this, customer satisfaction will be obtained as they get what they want and this can also increase customer loyalty

Although Sales forecasting would help the decision making process of Starbucks, It would also be hard for it to be completely accurate due to external factors such as politics, the country's economy and even social trends. Although the prediction currently, is that the sales in China is projected to rise 4% to 6% in the last three quarters, If there is a sudden change in social trends like being more cautious of their health, they would rather purchase healthy drinks like fruit juices rather than what Starbucks offers which is mostly coffee based drinks.

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One benefit of sales forecasting is that Starbucks can avoid impacts caused by increased demand, which is having insufficient resources such as manpower and stocks. Starbucks used sales forecasting to forecast that China would have an increase in sales from 4 to 6%, thus management can hire more staff and stock up on inventory such as syrups and cups. This way, Starbucks will not be blindsided and will be more prepared when the demand change actually occurs, thus reducing inefficiency in operations and increased customer satisfaction as they would be able to adapt faster to the change.

However, as time passes, consumer preferences constantly change due to new trends or even changes in the economy which would lead to a change in spending habits where people might choose more affordable options as compared to starbucks. Thus, it is hard to gauge accurately the exact change in sales.

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An accurate sales forecast would allow the marketing department to know how many products to sell and distribute. Beyond marketing, the operations department would know the quantity to produce and the quantity of raw materials to purchase to support production. Also, the Human Resources department would be able to predict future employee needs more accurately. Lastly, the finance department would be able to project costs and profits, and determine how much money is required to support the operations of the business. Hence, benefiting the whole business.

However, it is difficult to predict consumer preference. Sales forecasting may use some form of projection about future demand analysed through consumer preferences, and opinions and attitudes. This may be hard to gauge, since consumer tastes and preferences constantly vary

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one benefit of sales forecasting is that it allows Bizs to plan in advance. Sales forecasting ensures that a biz thinks ahead about how it plans to monitor and track sales beyond current period. In the context of Starbucks, they uses customer loyalty card, mobile apps and websites to understand better what type of coffee their customers like, what time and where does customer usually buy their coffee at. This allows Starbucks to understand better of their customer needs as they are able to visualise better using primary data. Therefore Starbucks are able to think n plan ahead to avoid possible mistakes and smooth sales.

One limitation of sales forecasting to Starbucks is that the impact of external influences, for example with ref to economic factors, Starbucks cannot control if the economy is doing well anot, so if suddenly there is a recession, as Starbucks coffee are usually more expensive as compared to coffees in neighbourhood coffeeshop or canned coffee, this means that consumer would rather switch to a cheaper alternative of Starbucks coffee. This implies that sales performance of Starbucks can be unexpectedly affected and hence they shld implement a combine of strategies w sales forecasting to improve sales performance.

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To avoid problems brought about by demand fluctuations, sales forecasting can be very helpful. This is achievable because there are expected sales increases all over the world and in China. Therefore, Starbucks has to budget for additional employees to balance the additional work in an effort to not be blindsided by the spike of demand. Consequently, Starbucks has adequate personnel to deal with the increased demand and there will be no emergencies staffing wise when there is a high demand surge because a new drink has just been introduced. Customers will also be pleased with the possibility of being served and leaving without spending too much time waiting in line to get their drinks.

However, external social factors may influence how accurate sales predictions are. A change that affects capture of elder customers is the aging population. Many elderly people do not take Starbucks beverages like the caramel Frappuccino because of high sugar levels. This causes a reduction in demand which has the ability to underperform sales for Starbucks, and cause further reduction in sales revenue and hence net profit.

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One benefit for sales forecasting is that it allows for advanced planning. This can help starbucks ensure that they have enough ingredients and resources to meet the demands in the current period, and ensure that they have sufficient resources. During this period, starbucks can also take note of consumer trends and potentially come up with new products to meet customer's changing taste and preferences. This will benefit starbucks as they will be able to find ways to grow their business, and also take this opportunity to compete with other businesses in the same industries like CBTL through the introduction of new products that meet customer's taste and preferences, which can attract customers and increase their sales.

Sales forecasting may also not be accurate due to social factors. Health conscious consumers may not enjoy starbuck's drinks due to the amount of calories and sugar in it, which causes a decrease in demand for such drinks.

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The benefit is that it allows advance planning for the business as it ensures the business to monitor and track sales beyond the current period. In which they can then allocate resources effectively through the advance planning, this allows the business to operate more efficiently as the resources are allocated to the places in which needs it.

however the business may be still blind sinded by sudden changes in the economy such as sudden recessions, as advance planning does not take into account of sudden changes thus it may affect the business negatively

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Benefit: Sales forecasting helps Starbuck’s financial department by allowing it to predict future demand for its products, enabling them to create more accurate budgets where funds can be allocated. For example Starbucks analysed historical sales trends and customer foot traffic to determine where new stores would be most profitable. By accurately predicting future revenue, the finance team was able to allocate funds efficiently, ensuring that investments were directed toward high-potential areas while avoiding over-expansion in low-demand markets.

Eval: Though sales forecasting can be beneficial to Starbucks, the impact of external factors such as Covid 19 influences their sales performance when lockdowns and remote work drastically reduced customer foot traffic, sales plummeted beyond what forecasts had predicted. This led to a financial strain, as Starbucks had already committed significant funds to new store openings and operational costs based on pre-pandemic projections.

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One benefit is Starbucks can plan in advance. Sales forecasting ensures that Starbucks thinks ahead about how they plan to monitor and track sales beyond the current period. For example Starbucks can use previous sales data and trends to see how well drinks like matcha is being sold and if customers like the drink. If people go to Starbucks to buy matcha regularly, Starbucks can plan and decide how much matcha powder they need to stock up on. However, if not many people buy matcha at Starbucks, Starbucks do not need to stock up that many matcha powder. Starbucks can also use the data to decide how they want to publicise their new matcha drink. When the new drink is marketed well, more people will want to try the drink which will increase Starbucks profit growth.

With advance planning, Starbucks can allocate the right amount of resources to each shops and will not overspend funds unnecessarily. This means that Starbucks can use the remaining funds to promote new drinks. However, Starbucks may face difficulties using old data as customers taste and preferences will change over time. If Starbucks do not have enough ingredients to make the drink, customers will be dissatisfied with Starbucks services.

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Sales forecasting helps Starbucks in advance planning this means that through sales forecasting Starbucks ensures the business thinks ahead about how it plans to monitor and track sales beyond the current period. For example, if Starbucks have been tracking the precious sales that Christmas themed drinks attract a larger sales volume during December, Starbucks can use this information and follow up with good business strategies for the upcoming months , for example developing Chinese new year themed drinks during February and January period. This process helps Starbucks generate high amount of sales for their drinks monthly as they are able to plan ahead and use marketing tactics to their advantage. However as a multinational company Starbucks have to be mindful that all other outlets from other regions may not produce the same sales result thus Starbucks should not forecast sales base on one region and instead monitor other regions as well to ensure that their marketing tactics are feasible

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One benefit of sales forecasting is that it benefits the whole business. Sales forecasting would benefit Starbucks since it would allow the marketing department of Starbucks to predict how many products they would need and how much supplies they would need to support production. Sales forecasting would also allow starbucks to predict how many drinks and food products they will sell which allow them to prepare their supplies accordingly sales forecasting would also help Starbucks market products such as their seasonal drinks and newer products

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One benefit of sales forecasting to Starbucks is that it benefits the whole business. Sales forecasting refers to predicting future sales levels and sales trends through the use of statistical methods.Thus the operations department of Starbucks would know the quantity to produce and the quantity of raw materials such as coffee beans,milk,etc to purchase to support production. Also the human resource department would be able to predict future employee needs more accurately.For example, in certain season so there could be a higher demand for a specific coffee drink and Starbucks can prepare the needed resources for that.

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Sales forecasting benefits the whole business. An accurate sales forecast would let the marketing department know the amount of products to sell and distribute, such that they are able to plan accordingly to the quantity. This is so that they would have a gauge of how big their target audience is and cater to their tastes and preferences. Beyond marketing, the operations department would know the quantity to produce and quantity of raw materials to buy to support production and sales. This is to avoid overproduction of goods like coffees and cakes and reduce waste of resources like coffee beans and ingredients to bake cakes.

However, sales forecasting is dependent on historical data or past results to predict sales of coffee for Starbucks in the future. This may not be too helpful because sales results in the past are not always indicative of future sales results. This is due to dynamic market conditions. Trends tend to change over time and the management has to take note of what consumers really need the most. For instance, just because a past popular flavour like matcha may have generated high sales, does not mean that it would continue to do so in the future. Starbucks still have to upgrade their current products like coming up with a strawberry matcha coffee to keep enticing customers.

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Sales forecast would also help Starbucks to minimise any impacts caused by a demand change. For example, if the management of Starbucks realise that there are certain seasons where sales are usually higher, such as during Christmas, they can be prepared by hiring more employees so that there would not be a shortage of staff during peak periods. Sales forecasting based on prior sales results and management experience reduce the chances of Starbucks being blindsided by a surge or drop in demand. This would help Starbucks to reduce their costs, by not over purchasing its inventory during periods where there is not much demand, and possibly increasing their profits during seasonal periods of high demand with the employees that they hire beforehand.

However, it is difficult for Starbucks to predict consumer preference as consumer’s tastes and preferences always vary. There are always different trends popping up almost every week such as the dalgona coffee trend or the matcha trend. If Starbucks were to use the current trend to attract customers by creating a new drinks, there might already be a new trend by the time they come out with the new drink and it might not attract consumers anymore. This might make it difficult for Starbucks to attract more consumers and earn more profits as their projection of future demand may be incorrect.