Business Analysis : Starbucks Cafe Practices

Costa Rica now provided raw material for Starbucks which accounted for about 15 percent of the total coffee beans Starbucks needed every year. Costa Rica as one of the raw material suppliers plays an important role in global value chain. Coffee has played a pivotal role in the development of Costa Rica. It has shaped social, cultural and political institutions and is still one of country’s major agricultural exports. (Anywhere, 2016) The global value chain in this coffee industry can be described that Starbucks, the centre in this coffee global value chain, purchasing raw materials (coffee beans) from coffee farms in Costa Rica, reprocessing and reproducing in retail shops, selling the finished products (various kinds of coffee) to customers in the world.

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.

Starbucks desire as the leader in the specialty coffee industry is to be acknowledged for its responsibility to coffee farmers and their families to improve their well-being. The corporation’s primary stakeholders are broad organizations such as, coffee trade associations, suppliers, and groups with interest in sustainable coffee production. Including non-profit groups focused on human rights, social justice, and environmental issues. Other stakeholders include governmental agencies such as, U. S. AID (Starbucks Corporation, 2010).

* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco

Green Mountain Coffee Roasters has become a force to reckon with in the specialty coffee industry, with incredible growth in the last ten years, due in large part to its commitment to customers, employees, and social responsibility. This paper will concentrate on the financial records reviewed and will analyze (a) GMCR’s annual report and 10-K; (b) industry information, including key economic factors, life cycle, evaluation of factors for success, key business risks, accounting considerations, legal and regulatory concerns, and social concerns; (c) the company’s financial

The first Starbucks opened in 1971, making the company 44 years old. In 2015 they were named the most ethical company by Ethisphere. Starbucks issues a book called “Standards of Business Conduct” to every employee when they start work. It outlines all of their policies and how an employee needs to act. They also required to go to trainings for compliance and ethics and are encouraged to report any issues or situations that emerge. They are also proud members of the ECOA (Ethics & Compliance Officer Association) and the Northwest Ethics Network. Starbucks is also a part of a plethora of organizations that give back to the local community and the world. All of Starbucks products like coffee and tea are fair trade, meaning that fair prices are paid for goods to developing countries. Economic transparency is also required in the company meaning that suppliers have to submit evidence of payment made throughout the supply chain to insure that a fair price is given to the farmer. Starbucks also has third-party verifiers who help to protect the rights of workers and their safety. They also comply with the minimum wage requirements and forbid child and forced labor. Third-party verifiers also protect the management of waste and water quality along with the conservation of water and energy. All of this is considered ethical because it protects both the employee and the customer, along with the

Starbucks Corporation is a multinational coffee conglomerate that opened their first store in Seattle’s Pike Place Market in Seattle, Washington in 1971. Over the course of the next 40 years, Starbucks has grown in leaps and bounds in not only opening more stores domestically and internationally but also in selling a variety of some of the world’s best coffee and tea blends available. The selling of Starbucks products does not only happen in their stores, it also happens in grocery, convenient, and specialty stores across the world. With the growth of the Starbucks Corporation came the responsibility of ethical and financial compliance to their organization, their shareholders, and the multitude of government agencies they deal with

First, Starbucks believes that the quality of its coffee products always needs to be perfect. Starbucks took quality control to a new level. When the freshness of coffee bean shipments is in question, Starbucks donates those beans to charity by the thousands of pounds. In addition to this measure of excellence, Starbucks helped incorporate a new coffeehouse

Approaching Coffee and Farmer Equity (C.A.F.E) Practices, Starbucks pays for the farmers through the proof of total expenditure, which ensure that those farmers earn profits, providing them loans. Then, its labor force is facilitated in their works while improving safety, fairness and working conditions. Moreover, Starbucks tries to be a leader in terms of environment when reducing the water used in its supply process, saving energy, researching in renewable energy. Those are the best practices in ethical sourcing to ensure for an ethical supply chain (http://www.starbucks.com/responsibility/sourcing/coffee)

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

T able of Contents   1. 2. Introduction Company Analysis 2.1 Foundation and Development 2.2 Internationalization 2.3 Products and Services 2.4 Recognition and Awards 3. Ethical Sourcing 3.1 C.A.F.E. Practices 3.2 Coffee Purchasing 3.3 Farmer Support 3.4 Forest Carbon Programs 4. Green Store Design 4.1 Energy Conservation 4.2 Renewable Energy 4.3 Water Conservation 4.4 LEED® certification and Green Building 5. Recycling 5.1 Reusable Cups 5.2 Store Recycling 6. Corporate Social Responsibility 6.1 Community Initiatives 6.2 Youth Action Grants 7. 8. 9. Conclusion Appendix Bibliography .. ... . .. 3 4 4 4 4 5 6 6 6 ... 7 .. 7 .. 8 8 . 8 9 9 10 10 10 12 12 12 14 15 16

Furthermore, Starbucks take extra steps to make sure that all the farmers are working safe and good conditions. Starbucks works together with the global environmental and human right group to develop standards and regulation to ensure

Starbucks is renowned for its morality due to their innovative sustainability and environmental policies and operations. They strive to go beyond mandated regulations by implementing ethics as part of their core practices. However, no matter how flawless their code of ethics is; they, too, face ethical issues and commit unethical acts. First, they are responsible for putting small, local coffee shops out of business which creates a uniform retail culture throughout cities. Second, they advertise to provide 100% fair trade coffee when it is not truly 100% fairly traded. Third, they use hormone added milk that is detrimental to the human body as well as the environment. Fourth, they set unrealistic, unattainable recycling goals, so they were unachievable; in turn, their trustworthiness is hindered and their reputation is tarnished. Lastly, it was revealed that Starbucks discovered ways to avoid paying taxes in the UK. To this day, Starbucks continues to be recognized as an ethical company. Although sometimes controversial, they are innovatively striving to positively change the ways of society and business operations.

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

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.