Analysis Of Starbucks Supply Chain Company

Starbucks is an American coffee company and coffeehouse chain which founded in Seattle and Washington from 1971, Starbucks already operated more than 20000 locations worldwide. (Starbucks Coffee Company, 2016) As one of the bestselling coffeehouse chain, Starbucks need to find a long term corporation supplier to provide coffee beans. Costa Rican coffee beans are considered among the best in the world. (Kummer, 2003)

Starbucks Corporation, generally known, as Starbucks Coffee is the leading retailer and a brand of world’s forte coffee in the world, with more than 15,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, wherever in this world where premium quality coffee is in demand. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 20737 stores in 63 countries and territories, including 11910 in the United States, 1496 in China, 1442 in Canada, 1052 in Japan and 772 in the United Kingdom. The first Starbucks was open in 1970. The name was inspired from Herman Melville’s Moby Dick, a definitive American novel regarding the 19th century whaling industry. The nautical name matches seamlessly for a store that imports the world’s finest coffees to the cold thirsty people of Seattle. In May 1998, Starbucks have finally successfully entered the European market through its acquirement of 65 Coffee Company stores initially originated from Seattle in the UK. Both companies shared a common culture, focusing on a great commitment to customized coffee, similar company values and a mutual respect.

In the inventories section, they are directed at the lower of cost (primarily moving average cost) or market. Starbucks records inventory reserves for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts. According to trends, inventory reserves are based on inventory obsolescence, historical experience and application of the specific identification method. As of September 27, 2015 and September 28, 2014, inventory reserves were $33.8 million and $31.2 million, respectively. We see that the carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer).

Today, Starbucks coffee an American global coffee company has 21,160 stores in 63 countries. Coffee shop that scored top rating for customer satisfaction in 2008 American customer satisfaction index. With its practices, Starbucks take advantage in the five stages in consumer purchase decision making process. Next, Starbucks’ marketing strategy

Accounting helps to measure an organizations activities, process data into reports, and translate the results to decision makers. Financial statements and reports help to present the company to the public in financial terms. The information on these data statements can used to evaluate the company through vertical and horizontal analysis. Vertical analysis is the proportional analysis of a financial statement. Normally, vertical analysis is done with a financial statement over a period of time. When using vertical analysis, a line item on a financial statement is listed as a percentage of another item (Harrison, 2015). A horizontal analysis is the comparison of information or ratios over a series of reporting periods. Horizontal analysis helps investors and analysts to control how a company has grown over time. Analysts and investors could use horizontal analysis to compare a company's growth rates in relation to its competitors and industry.

Starbucks has always taken exceptional care in keeping its brand value.  In fact, Starbucks prides itself in its brand, particularly the power it has to keep its customer base strong. Before analyzing this loyal customer base it is best to consider the particular characteristics of the brand that has led to Starbucks having such devoted patrons.

The company that I am writing about is Starbucks, the international coffee shop chain. The company's financial statements for this analysis are from the FY2011 Annual Report and 10-K. The company has 10787 stores in the United States, of which 38% are franchised and the remainder are company-owned. The franchise model is more common when the company operates internationally. There are 6216 Starbucks stores internationally and of these 63% are franchises, with just 37% company-owned. The franchise model for international expansion has been utilized to help Starbucks expand quickly in foreign countries and to mitigate foreign political risk and to ensure that the product/service offering is tailored to local tastes (Thompson, 2012). The company is now in the process of buying back some overseas franchise stores in order to retain more profits for itself (Franchise Press, 2011). This paper will take a look at the company's most recent annual report to analyze the financial statements.

1.Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion.

International Beans, Inc. (IBI) is a processor and distributor of a variety of blends of coffee. The company buys green (unprocessed) coffee beans from around the world and roasts, blends, and packages them for resale. IBI offers a large variety of different coffees that it sells to gourmet shops in one-kilogram bags. The major cost of the coffee is raw materials in the form of unprocessed coffee beans. However, the company’s predominately automated roasting, blending, and packing processes require a substantial amount of manufacturing overhead.

centralized system allows Starbucks to run a very effective supply chain and have direct input on their

The Starbucks Company is a purveyor of gourmet coffee that was founded in 1971 at Seattle’s Pike Place Market (Retrieved March 10, 2015, from http://www.starbucks.com/about-us/company-information). At that time Starbucks was a single storefront that offered premium, fresh roasted whole bean coffees. Since opening that single store Starbucks has grown to an international presence with branding that is recognizable worldwide. In addition, Starbucks has increased their product line beyond hot and cold coffee beverages to include hot and cold teas, packaged whole bean and ground coffees, high quality, fresh foods and coffee making equipment and supplies. Starbucks operates a total of 19,767 company operated and licensed stores and operates in 62 countries. In addition to the Starbucks’ brand the company also owns and operates other well-known brands such as Teavana and Seattle’s Best Coffee. (Retrieved March 10, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF)

Starbucks inbound logistics comprises of the firm’s quality control specialist in selecting top-quality Arabia coffee beans from suppliers that maintain a sustainable approach. Starbucks supports ethical sourcing by operating “responsible purchasing practices, farmer support…” (Starbucks, 2016) also corporate social responsibility (CSR). Additionally, their tactic is utilizing the “Coffee and Farmer Equity (C.A.F.E.) Practices” (Starbucks, 2016), wherein this approach is the first set of sustainability benchmarks in the coffee industry and is certified by third-party logistics professionals. The C.A.F.E. Practices has assisted Starbucks in relation to generating a “long-term supply of high-quality coffee” (Starbucks, 2016) and influencing the lives of the farmers and their communities. Furthermore, Starbucks utilizes economies of scales in their inbound logistics activities by developing outstanding supply chain procedures by using C.A.F.E. and also includes collaborating internationally with managers discussing strategic alliances through suppliers for their products. Starbucks have recently

To support this statement, I would like to present Starbucks ' supply chain reorganization started in late 2008. The initials first step was to simplify a complex structure in four essential supply chain functions. Every supply chain job fell in plan, source, make, and deliver. If someone involved in production planning or replenishment or new product, was part of the planning department. Sourcing functions split between coffee and "non-coffee" procurement. At that time Starbucks spent in the average US $600 million on coffee a year and total US

Starbucks then reorganized their supply chain – developing new cost-effective models, relooking into suppliers and reconsidering expenditures by ingredient instead of purchase price (Cooke, 2010). The supply chain was streamlined into 4 categories: Plan, Source, Make and Deliver, adopting a simplified system where coffee beans were manufactured in the same region where they are sold (Starbucks, 2012b, November 30). This was modeled by existing

These days Starbucks owns more than 18,000 stores in 62 countries and is the premier roaster and retailer of exclusive coffee in the world. Back in 1971, when the first Starbucks opened, the company already had two intentions to give to people every single day till now: share specialty coffee with friends and help to make the world a little better.