In a supply chain, distribution means the steps required to move and store a product from supplier stage to customer stage. It is an important driver for overall profitability of a company because it affects both the supply chain cost and the customer experience directly. (Chopra and Meindl, 2010, p68) A typical distribution network of coffee distribution system is like this (Starbucks Coffee Company, p22): In order to enforce its exacting coffee standards, Starbucks tries its best to control the whole supply chain. The company works with growers in various countries to purchase green coffee beans, oversees the custom-roasting process for the company's various blends and single-origin coffees, and controls the distribution to retail stores in the U.S. and around the world. Starbucks engages in a wide range of distribution including partnership, its company-owned stores and licensed products. Since Starbucks is a well-known brand, they use the third party relationships to attract other companies and expand their business. While licensed product part is not a large portion of the company’s revenues (4% in 2008), these items are an integral part of familiarizing customers with the Starbucks name and developing brand loyalty. (Crowe Remle, 2010) Starbucks not only sells coffee and some simple food to consumers, it also sells beans and ground coffee to businesses such as airlines, supermarkets, department stores, and ice-cream makers. In a complex distribution network, information technology helps a lot. Starbucks successfully integrates all sources of demand and matches it with the supply by using Oracle’s automated information system for manufacturing (GEMMS). The GEMMS system handles distribution planning, manufacturing scheduli... ... middle of paper ... ...rbucks locations in 14 markets including Thailand, Korea, Beijing, Shanghai and Hong Kong. (Starbucks entry into China, p12). Starbucks also has a partnership with the Chinese government and local universities to grow coffee in Yunnan province. (Starbucks entry into China, p13) Starbucks also has its first entry into European coffee market. Starbucks has a partnership with Arla Foods as its licensed partner to manufacture, distribute and market the premium ice coffee products for supermarkets, convenience stores as well as Starbucks’ own coffee shops in Europe. Arla Food is one of the largest dairy companies in Europe and provides a highly developed distribution network for ready-to-drink products on key markets for Starbucks in Europe. As we see, Starbucks expands their distribution network by building up partner relationship with other organizations overseas.
Many people start his or her day with a cup of coffee. Coffee franchisees are growing around the world with coffee being one of the most popular drinks. A Colombia franchisee Juan Valdez is a growing franchisee in the United States specializing in coffee.
Starbucks is the world’s largest specialty coffee retailer, Starbucks has more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products. Starbucks Corporation was founded in 1985 and is based in Seattle, Washington. (Bramhall)
Coffee is a growing part of people’s daily lives. Just before the 9-5 weekdays, and even during the 9-5, it is common for the working class to drink a cup of coffee. To support this accustomed part of our culture, it involves a complex supply chain that allows those coffee beans to turn into a cup that can be consumed. This paper is structured on how Starbucks, the top coffee supplier in the world, can supply its stores, from raw materials to manufacturing, right to the start of someone’s day.
Starbucks by now has an continuing connection to Sweden: CEO Howard Schultz beforehand worked alongside Hammarplast, “a Swedish housewares firm that marketed coffee makers” (Subhadra and Dutta, 2003). It was as working for this firm that Schultz early came to be cognizant of Starbucks, who was a main client of Hammarplast at the time. A connection like this might be functional for marketing and branding intentions if Starbucks selected to go in the Swedish market. Sweden is additionally quite an affluent state, and long word associate of the EU, making it probable that the residents will have disposable income to expend on coffees and supplementary beverages. Though, as the state has been appealing to external investment for a long era of period, the coffee marketplace could be exceedingly competitive, alongside continuing firms possessing momentous levels of marketplace power.
Since 1971, Starbucks Corporation has grown from a small coffee-roasting shop in Seattle to one of the largest chains of coffeehouses internationally, with nearly 21,00 stores worldwide. Starbucks originated as a coffee store selling coffee beans and coffee makers, and hoping to inspire people to brew their own fresh coffee. Today, Starbucks is one of the premier specialty coffee roasters in the world and carries beverages, snacks and consumer products. Starbucks Corporation owns a variety of coffee brands, tea brands, Ethos bottle water, pre-made drinks and Tazo Tea Company.
Starbucks is one of the largest coffee franchises in the world. With over 26,000 stores in 64 countries, the company has the right to brag about this. One of the problems which Starbucks is currently being faced with is the brand being watered down by over expansion and a too diverse product mix. With McDonalds and Dunkin Donuts entering into the specialty coffee market, Starbucks needs to alter the path which it is going in order to remain competitive in this industry.
It is a well-known fact that Starbucks is expensive, and it is not only coffee the company sell but status. In today 's developing countries Starbucks represents a status symbol that separates the rich consumers from the masses especially in the continent of Asia. A cup of Starbucks cappuccino coffee costs more than 6 dollars in China and is even more expensive in other developing countries in Asia, but the same cup of coffee may only cost half that price in the US. The American coffee and chain company of Starbucks Corporation sets an example and explanation of how global hospitality companies can implement price discrimination.
Starbucks purchases beans from Latin America, Africa, and Asia and roasts high-quality whole bean coffees and sells them, along with handcrafted coffee, ready-to-drink beverages, tea beverages and a variety of fresh food items, through company-operated retail stores. They sell coffee and tea products and license trademarks through other channels such as licensed retail stores. In addition to the flagship Starbucks brand, the portfolio includes brands such as Tazo Tea, Seattle’s Best Coffee. The main objective of Starbucks is to maintain its standing as one of the most recognized and respected brands in the world.
Since its founding, Starbucks has become a staple in the United States and a customary sight globally. Besides the association of Starbucks with coffee, the next familiarity is the company’s pride in being efficient in social responsibility. According to the Starbucks Heritage Statement, they still root its actions on CEO Howard Schultz’s visualization for the company, “Every day, we go to work hoping to do two things: share great coffee with our friends and help make the world a little better. It was true when we first opened in 1971, and it’s just as true today.” Today, the three core aspects of social responsibility that Starbucks focuses on as reported by their most recent Global Responsibility Report from 2012, are ethical sourcing, environmental impact and fostering strong communities in the areas they work in. Though many of the company’s stakeholders and consumers praise Starbucks for the undoubtable responsibilities in some areas, they tend to overlook the fallouts in other aspects of the company’s social responsibilities.
Comparing my own life to Michael in the book How Starbucks Saved My Life has some direct comparisons to what I read. A brief summary of Michaels life: Michael Gates Gill, in his fifties that had it all. Loving family, outstanding job with a six-figure salary, and a nice house in the suburbs. What more can you ask for? Well starting out the book it talks about his wonderful life but then getting around his sixties, he lost everything he had other then his Ivy League education and the though of his entitlement.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
Preliminary Starbucks – one of the fastest growing companies in the US and in the world - has built its position on the market by connecting with its customers, and creating a “third place” beside home and work, where people can relax and enjoy themselves. It was the motto of Starbucks’ owner Howard Schultz and, mostly thanks to his philosophy, the company has become the biggest coffee drink retailer in the world. However, within the new customer satisfaction report, there are shown some concerns, that the company has lost the connection with customers and it must be taken some steps to help Starbucks to go back on the right path regarding customer satisfaction. I will briefly summarize and examine issues facing Starbucks. Starting from there, I will pick the most important issue and study it from different positions.
Strong distribution network should be made in order to ensure accessibility of the product. Various factors should also be kept in mind while designing a distribution strategy which includes the shelf life of the product, its characteristics and location of the store where the product is available. Strong relations with retailer are to be made because as discussed earlier retailer is the one who influences the buying decisions the most.