The first paragraph should describe how the environmental dynamic $($from the list above$)$ could change the industry. The second paragraph should describe how the company$$s strength $($derived from prior readings or research on the company$)$ can be used to meet this dynamic in a positive way that benefits both society and the company. In the third paragraph, please discuss a couple of the initial up$-$front costs you believe are necessary to get the project up and running and what you believe to be the benefits received when the project is operational.

Starbucks Information:

Company$-$operated Stores:

Revenue from company$-$operated stores accounted for $81\%$ of total net revenues during fiscal $2019.$ Our retail objective is to be the leading retailer and brand of coffee and tea in each of our target markets by selling the finest quality coffee, tea and related products, as well as complementary food offerings, and by providing each customer with a unique Starbucks Experience. The Starbucks Experience is built upon superior customer service and a seamless digital experience as well as clean and well$-$maintained stores that reflect the personalities of the communities in which they operate, thereby building a high degree of customer loyalty.

Our strategy for expanding our global retail business is to increase our market share in a disciplined manner, by selectively opening additional stores in new and existing markets, as well as increasing sales in existing stores, to support our long$-$term strategic objective to maintain Starbucks standing as one of the most recognized and respected brands in the world. Store growth in specific existing markets will vary due to many factors, including expected financial returns, the maturity of the market, economic conditions, consumer behavior and local business practices.

Licensed $($or Franchised$)$ Stores:

Licensed stores generally have a lower gross margin and a higher operating margin than company$-$operated stores. Under the licensed model, Starbucks receives a margin on branded products and supplies sold to the licensed store operator along with a royalty on retail sales. Licensees are responsible for operating costs and capital investments which more than offset the lower revenues we receive under the licensed store model.

In our licensed store operations, we leverage the expertise of our local partners and share our operating and store development experience. Licensees provide improved, and at times the only, access to desirable retail space. Most licensees are prominent retailers with in$-$depth market knowledge and access. As part of these arrangements, we sell coffee, tea, food and related products to licensees for resale to customers and receive royalties and license fees from the licensees. We also sell certain equipment, such as coffee brewers and espresso machines, to our licensees for use in their operations. Employees working in licensed retail locations are required to follow our detailed store operating procedures and attend training classes similar to those given to employees in company$-$operated stores. In a limited number of international markets, we also use traditional franchising and include these stores in the results of operations from our other licensed stores.