Premium Essay

Starbucks Value Chain

In: Business and Management

Submitted By sheen18
Words 310
Pages 2
Inbound Logistics: - The inbound logistics mainly involve company agents who choose coffee bean producers mainly in African continent and communication regarding the standards related to the quality of coffee beans and finally establishing the strategic relationships with the suppliers and organizing the supply chain management. Starbucks doesn’t outsource the procurement to maintain its high quality of standards right from the selection of coffee beans.
Operations: - Starbucks operates in 65 countries either as direct stores or as licensed stores Currently Starbucks has approximately 21000 stores internationally which includes Starbucks Coffee, Teavana, Seattle’s Best Coffee and Evolution Fresh Retails. The company has generated approximately 79% of its revenue from its direct stores and 9% from the licensed stores during year 2013.
Outbound Logistics: - Starbucks generally sells its product through its stores without any intermediates. However, the company has launched a new range of single origin coffee which will be sold through some leading retailers in the U.S.; these are Guatemala Laguna de Ayarza, Rwanda Rift Valley and Timor Mount Ramelau.
Sales and Marketing: - Starbucks does not heavily invest in marketing and advertising. Its marketing strategy relies on word of mouth achieved through the high quality of products and high level of customer services. However, need-based marketing activities are carried out during the launch of new products which is generally in the form of sampling in areas around the stores.
Customer Service: - Starbucks aims to provide superior level of customer services at its stores. The company staff is trained to deliver highest levels of customer services which are in sync with Starbucks retail objective “to be the leading retailer and brand of coffee in each of our target markets by selling the finest quality coffee and related…...

Similar Documents

Premium Essay

Value Chain Management of Starbucks

...Title: Value Chain Management Name: Yu Yat Ho Fish Topic: Starbucks–Human Resources Management Sub-Title: Employee Relation TABLE OF CONTENT 1. Executive Summary………………………………………………………………………………P.3 2. Introduction a. Company background……………………………………………………………………..P.4-5 b. Company Mission and Principle………………………………………………………P.5-7 c. Benchmark……………………………………………………………………………………..P.7-8 3. What is Value Chain Management?..........................................................P.9-11 a. Corporate Strategy………………………………………………………………………….P.12 b. Business Strategy…………………………………………………………………………….P.13 c. Functional Strategy …………………………………………………………………………P.13-14 4. Implementation of Human Resource Strategy by Employee Relation Practice a. Model of Communication………………………………………………………………..P.16-20 b. Employee Involvement…………………………………………………………………….P.20-26 5. Influence of Starbucks Human Resource Management to: a. Customers………………………………………………………………………………………..P.27-28 b. Business Process……………………………………………………………………………….P.29-30 6. Conclusion…………………………………………………………………………………………P.31 7. Appendix……………………………………………………………………………………………P.32-33 8. Bibliography………………………………………………………………………………………P.34-36. 1. Executive Summary What made Starbucks one of the most extraordinary companies in the world? I suggest that their core people-driven philosophies play a great part of it. The success of Starbucks is driven by the......

Words: 4968 - Pages: 20

Premium Essay

Starbbuj

...Introduction Value chain analysis is useful for new producers, including poor producers and poor countries trying to enter the global market in a way that will provide for sustainable income growth. The value chain analysis also is useful as an analytical tool in understanding environmental policy which provides for the efficient allocation of resources within the domestic economy. Company Background Starbucks started in 1971 when three academics: English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker, opened a store called Starbucks Coffee, Tea, and Spice in Seattle. These three partners shared a love for fine coffees and exotic teas and believed they could build a clientele in Seattle much like that in the San Francisco. Each invested $1,350 and borrowed $5,000 from a bank to open the Pikes Place store. The company began its first operations by providing coffee to restaurants and espresso bars, by the mid-80s, the director of retail operations and marketing, Howard Schultz introduced the idea of coffee house to the company’s founders. In 1991, Starbucks began to gain ground and by end of the decade, the company had grown significantly. The 1990s was considered to be the company’s turning point toward becoming a giant company. However, it was at the beginning of the millennium that the Starbucks through the introduction of “Starbucks Experience” that its “miracle” occurred. The coffee store grew in leaps since the year 2000. On the first......

Words: 2163 - Pages: 9

Premium Essay

Case Analysis: Forecasting and Planning

... Introduction This paper will analyze a case analysis focused on Starbucks’ supply chain. Starbucks’ business model and supply chain strategy will be reviewed. Also, the global supply chain challenges the company faces will be analyzed. Further, the importance of aggregate planning and demand forecasting to Starbucks’ supply chain will be discussed. Finally, ways in which Starbucks utilizes pricing promotions to influence demand will be highlighted. Starbucks’ Business Model & Supply Chain Strategy Starbucks is a global coffee chain with over 21,000 outlets in 60 countries. The company is built on its brand which demands an experience and service above all other coffee chains. Until recently, Starbucks retained full ownership and control of its outlets. Franchising is relatively new transition for the organization. Yet, Starbucks takes a different approach to franchising than other large organizations like Dominos or Subway. Starbucks is extremely selective about who they franchise to. They take steps to ensure everyone they partner with will operate in sync with Starbucks’ culture and brand emphasis, as well as align with their environmental sustainability commitment. (Curtis, 2015) The fact that Starbucks was able to grow into a global organization with over 21,000 outlets speaks to the strength of their supply chain. Their supply chain strategy is built on a make to stock model which focuses on utilizing real time demand to......

Words: 1125 - Pages: 5

Premium Essay

Starbucks

...Introduction 1.1 Purpose of report The economic impact of Starbucks on the UK economy June 2013 The objective of this report is to investigate the economic contribution of Starbucks to the UK economy. This contribution is quantified in terms of impacts from:  The operation of Starbucks in the UK;  The supply chain effects created by Starbucks purchases of inputs from elsewhere in the UK economy.  The consumer expenditure of Starbucks’ staff and those employed directly in its supply chain spending their wage income. The report also discusses aspects of Starbucks UK operations that are likely to play a more diffuse role in supporting the performance of the overall economy and the localities in which Starbucks has a presence. The report comprises six chapters as follows:  Chapter 2 focuses on the economic contribution to value added and the number of people employed by Starbucks operations in the UK.  Chapter 3 explores the impacts on the economy, again in terms of value added and employment that Starbucks purchases from its UK supply chain creates and its staffs’ spending their wage income.  Chapter 4 aggregates these operational, supply chain and wage consumption effects to provide an overall quantification of the impact on the UK economy from Starbucks activities.  Chapter 5 discusses the wider, ‘catalytic’ contributions that Starbucks makes to the UK economy. First, the report provides an overview of Starbucks operations in the UK and an introduction to......

Words: 706 - Pages: 3

Premium Essay

Business

...Introduction STARBUCKS Coffee Company is a global coffee company and a coffeehouse chain headquartered in Washington, the US and the company has generated a consolidated revenues of $14.9 billion during 2013 with more than 200,000 partners, referred to as employees. Value Chain analysis of STARBUCKS The business management concept of the value chain was introduced and described by Michael Porter in his popular book "Competitive Advantage: Creating and Sustaining Superior Performance" in 1985. A value chain is a series of activities or processes which aims at creating and adding value to an article (product) at every step during the production process. Let’s take the example of STARBUCKS to understand this better. The STARBUCKS journey began with a single store in Seattle in the year 1971 to become one of the most recognized brands globally. STARBUCKS mission is, per its web site, “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Inbound Logistics The inbound logistics for STARBUCKS refers to selecting the finest quality of coffee beans by the company appointed coffee buyers from coffee producers in Latin America, Africa and Asia. In the case of STARBUCKS, the green or unroasted beans are procured directly from the farms by the STARBUCKS buyers. These are transported to the storage sites after which the beans are roasted and packaged. These are now ready to be sent to the distribution centers few of which are company owned...

Words: 772 - Pages: 4

Premium Essay

Starbucks-Strategic Analysis

...VIII. APPENDIXES 31 EXECUTIVE SUMMARY: Starbucks Corporation, currently the global leader in the coffee business, started off as a coffee bean roaster and retailer in 1971 in Seattle. Since then the firm has established 20,891 stores across 64 countries under the leadership of Howard Schultz. In the last decade, Starbucks has resorted to aggressive expansion making it the leader on the coffee shop market. However, increased domestic competition, recession and rise of commodity prices have led them to shut down 128 stores in 2013. Hence, arises the need for a novel marketing plan. An analysis of the current situation reveals that Starbucks’ biggest strengths are its brand image and store appeal. However, Starbucks’ reliance on the U.S markets for its revenue is highly unsafe in the long run. Hence it is advisable to venture into other markets and thus diversify its risk. It is also evident that one of the major reasons for the decline in sales is the low price offered by its competitors. Hence, in order to attract customers, this marketing plan suggests extending Starbucks beyond its cozy indoor environment using an offensive strategy and protecting its coffee shop business using a defensive one. This marketing plan suggests making Starbucks products available on the go. It segments its customers into two divisions, those that visit the coffee shop houses and those who prefer relishing these products at their comfort. Starbuck should continue to develop new products for...

Words: 7292 - Pages: 30

Premium Essay

Starbucks Supply Chain

...chosen: Starbucks [pic] 1. Brief introduction to the company and its supply chain. Company Profile In 1971, a humble coffee house was opened in Seattle by three person- Jerry Baldwin (English teacher), Zev Siegel (History teacher) and Gordon Bowker (writer). The coffee house was named “Starbucks Coffee, Tea, and Spice”, inspired by the Melville’s Classic Novel “Moby Dick”. The original logo of Starbucks was a two-tailed mermaid circled by the name “Starbucks Coffee Tea Spices”. The company expended slowly and by 1980s, it had a roasting plant and 4 retail stores. In 1987, the owners decided to sell the business. Howard Schultz bought the company and became the president and CEO. Since then, Schultz brought in the experienced person, Howard Behar and Orin Smith to build the company. (1) By 1991, the company had over 100 stores and went listed in 1992. By 2011, Starbucks Corporation has 17,009 stores; 8870 owned stores and 8139 licensed stores. As of December 28, 2014, the total stores worldwide reached 21,878 in 66 countries. Products of Services Starbucks offers variety of premium products that customers can enjoy in the stores, at home, at office and on the go. The products offered are categorized into Coffee, Handcrafted Beverages, Merchandise, Fresh Food and Consumer products. In Coffee category, there are more than 30 blends and single-origin premium coffees offered. In Handcrafted Beverages category, Starbucks provides...

Words: 3613 - Pages: 15

Premium Essay

Starbucks

...Starbucks Introduction and Operations 1 The first Starbucks opened in 1971 as a single store in Seattle’s historic Pike Place Market. It offered some of the world’s finest fresh-roasted whole bean coffees. The name Starbucks was inspired by Herman Melville2 Novel, Moby Dick, and evoked the seafaring tradition of the early coffee traders. In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) first walked into a Starbucks store. He was impressed by the drink and joined the company a year later. He travelled to Italy in 1983, and became captivated with Italian coffee bars and coffee experience. He planned to bring the Italian coffeehouse tradition back to the United States. From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection. Starbucks has more than 15,000 stores in 50 countries and is the premier roaster and retailer of specialty coffee in the world with the mission to inspire and nurture the human spirit. Starbucks purchases and roasts high-quality whole bean coffees, has an inviting atmosphere and offers a selection of premium teas, fine pastries, sandwiches, salads and other treats. Starbucks entered the European market in May 1998 through its acquisition of 65 Seattle Coffee Company stores in the UK. Starbucks company-wide diversity strategy focuses on four areas: partners, customers, suppliers and......

Words: 1941 - Pages: 8

Premium Essay

Boeing Company Swot Analysis

...Starbucks case report Xiaoteng Gao, Xiao Liu, Ping Cai, Mengqiong He, Yuheng Chen 1. What factors accounted for the extraordinary success of Starbucks in the early 1990s? In the early 1982, the inspiring experience of Milan’s coffee culture and espresso bars’ role in Italians’ everyday social lives motivated Howard Schult to convince the company to set up an espresso bar in the corner of its shop which became the prototype for his long-term vision and also foreshadowed the success of Starbucks. After Schult taking over the company, he took all measures to take the company public by opening new stores, increasing the variety of coffee beverage, positioning the main customers, raising money and etc. He also tried his best to have created Starbucks’ experiential brand strategy and value in the process of the coffee drinking experience. In summary, we can conclude that the success of Starbucks in the early 1990’s can be attributed to Howard Schultz’s vision of the Starbucks brand which placed value in the process of the coffee drinking experience. And there are seven main factors accounting for the extraordinary success of Starbucks in the early 1990s as follows: a. Coffee itself: Starbucks kept full control of quality of its products to be the highest-quality coffee in the world by souring from qualified channels, controlling as much of the supply chain as possible, working directly with growers of origin to purchase green beans and overseeing the custom-roasting......

Words: 4065 - Pages: 17

Premium Essay

Sbux

...Table of Contents Introduction 3 1.1 Brief Company Overview 3 1.2 Speciality Coffee Industry and Starbucks Coffee Supply Chain 3 1.4 Problem Definition 4 Literature Review 4 2.1 Current Situation of Starbucks and Older Supply Chain Method 4 2.2 Supply Chain Visibility 5 2.5 C.A.F.E (Coffee and Farmer Equity Practices) Practices 6 Findings 7 3.1 Starbucks’ Operations 7 3.1.1. Material Flow 7 3.1.2 Purchasing System 9 Discussion and Analysis 10 4.1 Starbucks’ 3PLs Strategy 10 4.2 Value Change Analysis 10 Conclusion 11 Appendix A 15 Appendix B 16 Appendix C 17 Appendix D 18 Appendix E 19 Appendix F 20 Appendix G 21 Appendix H 22 Appendix I 23   Introduction 1.1 Brief Company Overview Starbucks is the world’s #1 speciality coffee retailer with more than 20,000 stores n 65 countries (See Appendix G). It operates an estimate of 8,800 of its shops, while licensing and franchises operate the remainder of the stores. The company also owns Seattle’s Best Coffee, Torrefazione Italia coffee brands, Teavana, Tazo, Evolution Fresh, and La Boulange (SCC 2014). Starbucks offers consumers various products including: coffee, handcrafted beverages, merchandise, fresh food, and consumer products of coffee and tea and ready-to-drink (RTD) goods (SCC). 1.2 Speciality Coffee Industry and Starbucks Coffee Supply Chain The speciality coffee industry has seen drastic growth with increase in sales between the 1980s and 1990s. A great number of coffee......

Words: 3399 - Pages: 14

Premium Essay

Starbucks Branding Report

...Brand Management Brand Value Chain - The below diagram is a typical model of brand value chain. It follows the process of developing a brand. There are two lines in this model, first line shows the various stages of developing the value of company and the second line consists of the multipliers which strengthen the relationship between the stages. Generally there are four value stages and three multipliers in a brand value chain model but for explaining the case of Starbucks we have excluded the fourth stage and the subsequent multiplier. Marketing Program Investor Customer Mind-set Market Performance Marketplace Conditions Multiplier Program Quality Multiplier Value Stages Multipliers * Product * Location * Advertising * Employee * Clarity * Distinctiveness * Relevance * Consistency * Price Premiums * Price Elastics * Market Share * Expansion Success * Cost Structure * Profitability * Awareness * Attitude * Association * Attachment * Activity * Competitive Reactions * Channel Support * Customer Size & Profile Marketing Program Investor Customer Mind-set Market Performance Marketplace Conditions Multiplier Program Quality Multiplier Value Stages Multipliers * Product * Location * Advertising * Employee * Clarity * Distinctiveness * Relevance * Consistency * Price Premiums * Price Elastics * Market Share ......

Words: 2894 - Pages: 12

Premium Essay

Not Just a Cup of Joe: Starbucks’ a Successful Organizational Culture

...Not Just a Cup of Joe: Starbucks’ A Successful Organizational Culture The Starbucks story began in 1971 in Seattle’s Pike Place Market, selling high-quality dark-roasted coffee in small batches. The bean roaster and retail store was originally started by three partners, Jerry Baldwin, Zev Siegel, and Gordon Bowker. The three later sold the company to Howard Schultz in 1987. Howard Schultz had a strategy and a vision for the company that established its as one of the major corporate success stories of the late 20th century. The vision of founder Howard Schultz was inspired by Italian coffee bars/beverage retailer. Having experienced the espresso and coffeehouse culture of Italy, he envisioned developing and evolving a similar coffeehouse culture in the United States. He wanted to build a environment a brand that would create relationships. Our Starbucks Mission Statement: “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Starbucks, Our Heritage). Starbucks believes that communicating culture, values, and best practices through its people and being connected to community and the environment will insure the a successful organizational culture. A successful organizational culture is based on adaptability, involvement, clear vision, and consistency. Starbucks has each of these attributes and implements them in every aspect of its relationship model. Preliminary research shows that organizational Warner 2 culture is related to...

Words: 763 - Pages: 4

Premium Essay

Starbucks

...description of the Starbucks Coffee Corporation. This paper will also discuss the six components of Starbucks organization’s supply chain. This paper will also discuss the potential problems with the supply chains and what could be used to prevent the problems. This paper will show control chart with the global operational processes. Lastly, this paper will address the importance of quality management and measurement. Starbucks Coffee Corporation Starbucks Corporation is one of the best examples of a global organization that deliver services and goods all around the world. Starbucks Coffee began in 1971 in Seattle’s Pike Place Market. Starbucks is the largest coffee company and coffeehouse global. Starbucks name derived from character in the Moby Dick book the first mate and the logo is Greek mythology twin-tailed siren. With more than “23,187 Starbuck stores in 64 countries, including 12,973 in the United States, 1,897 in China, 1,088 in Japan and 927 in the United Kingdom” (Starbucks Company Statistic, 2014). By “one person, one cup and one neighborhood,” Starbuck mission is “to inspire and nurture the human spirit” (Starbucks Company Profile, 2014). I am not a coffee drinker but ever since Starbucks been around I am drinking coffee. I never knew about Frappuccino’s, Lattes or Expresso’s. My favorite drink is Sugar Free Caramel Macchiato with couple splashes of French Vanilla syrup coffee or the Vanilla Bean Frappuccino. Let’s not forget about Starbucks other......

Words: 950 - Pages: 4

Premium Essay

Value Chain Analysis

...Value Chain and its impact on Business Strategy Michael Porter presented the value chain concept as the whole series of activities that create and build value in his 1985 book Competitive Advantage (NetMBA, 2010). Porter developed the five forces model that many businesses and organizations utilize to address how well they can compete in the marketplace (Harvard Business School Press, 2005). In his book, Porter suggests that activities within an organization add value to the service and products that the company produces. These activities should be running at the highest level if the organization expects to gain competitive advantage over its competitors. If the organization is run efficiently, the value obtained should exceed the costs of running them. He suggests there are primary and support activities that make up the value chain concept. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities help the primary function and include procurement, technology development, human resources management, and firm infrastructure (Porter, 1985). To establish a successful product for an organization, a value must be included in each activity that the product life cycle. A successful organization contains all the required functional departments to perform these activities, and effective communication is necessary to synchronize the activities of these functional units efficiently. Technology Impacts a......

Words: 1040 - Pages: 5

Premium Essay

Starbucks in the Us. Strategies and Core Competencies

...Exercise A - Starbucks in US: strategies and core competencies GROUP 6 Exercise A - Starbucks in US: strategies and core competencies GROUP 6 Thijs Bavelaar - 091698 Carlijn Swagemakers - 120014 Sam Verlaat - 111449 Bas Vliegen - 122959 Thijs Bavelaar - 091698 Carlijn Swagemakers - 120014 Sam Verlaat - 111449 Bas Vliegen - 122959 Executive summary Within this report the Starbuck’s Corporation is being analyzed, in this way the company can be positioned on how they are performing within the competitive set. Through research Starbucks’ core competencies are found, and on elaborated. Those competencies are researched in the competitive set with the main competitors of Starbucks’ as well, via basic benchmarking there has been determined where Starbucks is within the market. Table of Contents Introduction 4 Core competencies 5 Key competitors 9 Competitive advantages 11 Communication within organization 12 Competency - strategy matrix 13 Conclusion and recommendations 14 Bibliography 15 Appendices 19 Appendix 1: Value chain analysis 19 Appendix 2: SWOT analysis 22 Appendix 3: Functional analysis 25 Appendix 4: VRIO analysis 26 Introduction The purpose of this paper is to analyze both Starbucks’ strategies and core competencies, and use this analysis to assess the degree of synergy between the two. First, the core competencies of Starbucks, specified to the US, are identified and presented with the use of a value chain......

Words: 6083 - Pages: 25