Global Analysis Of Starbucks And Starbucks

Recently people have become more and more conscious of what they put into their bodies and where it comes from. An unprecedented amount of information is now readily available to most Americans with the advent of the Internet. This has resulted in a great increase in transparency of the many aspects of imported products. Consequently, programs have been established to help ensure that these products are produced in more ethical and humane ways. To many Americans, the Fair Trade labeled bags of coffee they purchase that give them the energy they need to go about their day in addition to being a socially conscious decision but to many it is a means for survival and an escape from a cycle of debt that traps many similar non-Fair Trade growers generation after generation

Starbucks had been rank as one of the World’s most principled companies around the world (Ethisphere, 2013). As the people are holding the corporation to the highest ethical and social responsibility, these are becoming the expectation of their consumers. Having all these responsibilities in mind, Starbucks is striving to enact its own Corporate Social Responsibility, guidelines for bettering stakeholders in its communities (Starbucks, 2013). Today the company not only focusing on the communities they are operating, but trying to make a huge impact globally. By doing so they are working with Non-governmental organization. Starbucks had been focusing on social responsibility since in 2009; one of the areas the company had been focusing is the Fair-Trade coffee selling. (Reis, 2009).

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).

In chapter seven, it was stated that the coffee shop company do not completely buy from the small-time farmers. In case regarding towards Rwanda, a developing area where Starbucks supposedly performs fair trade, it was discovered that Starbucks buy their coffee beans from bigger plantations and the middle man, who buys coffee beans from small-time farmers usually scamming them (216). This creation of image of Starbucks being a good corporate business in helping the small time farmers earn more income is contracted by Simon’s findings, and shows that the coffee company is actually taking advantage of the small time farmers, when Starbucks buys from the middle man or the big plantation owners, it pay less for the coffee beans than they do if Starbucks purchases beans from small-time farmers. The greed of Starbucks at the expense of the individual farmers is unethical, yet the coffee shop company markets the contradiction.

When you buy a cup of coffee in Starbucks every morning to keep you awake through the day, do you ever think of the origins of these coffee beans? How much of those three dollars you pay in Starbucks goes to the Farmers? Personally, I’m not a coffee-drinker. But somehow I realize the big sign in front of Java City in the Reitz Union Food Court, which says “Certified Fair Trade Coffee.” I’m surprised how few students know what it means. Currently, farmers in Brazil and Vietnam grow the majority of coffee beans.

Coffee is estimated to be a $20 billion industry, its impacts reaching almost every corner of the earth. As coffee spread around the world and demand for the bean grew, an industry popped up that led to current day unethical and unsustainable practices surrounding the production and marketing of the bean. Vast consumption of coffee is what continues the drive to cultivate and produce the drink. The production of coffee affects the environmental ethics of many communities, but through changing the markets and commodities surrounding coffee, negative impacts of its production have turned around drastically.

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.

Fair Trade Coffee Fair Trade promotes socially and environmentally sustainable techniques and long-term relationships between producers, traders and consumers The world coffee industry is in crisis. A flood of cheap, lower-quality coffee beans have pushed world market prices down to a 30-year low. Many now earn less for their crop than it cost them to grow. Many coffee farmers around the world receive market payments that are lower than the costs of production, forcing them into a cycle of poverty and debtWithout urgent action, 25 million coffee growers' face ruin.

Thus, Starbucks exploits the situation brought about through globalisation, as their "Workers earn two cents a pound for picking berries," says Eric Hahn of the Chicago-based U.S./Guatemala Labor Education Project, whilst ”Starbucks turns around and sells a pound of Guatemalan coffee beans for nine dollars” (Zielinski, 1995). However, Alex Singleton, a fellow at the Adam Smith Institute claimed that 'Starbucks has done more to lift coffee farmers out of poverty than almost anyone else - including Oxfam and the do-gooders,’ (Davis, 2008). Believing that "the answer to development is not large amounts of foreign aid [rather] it’s getting these countries to engage in the global market, and Starbucks helps that’ (Davis, 2008). Certainly, Starbucks has provided work for farmers living in poverty. Although, Starbucks relationship with the farmers was solely developed for the purpose of exploiting and using these farmers and their workers to gain maximum profit by paying $0.57 per pound of coffee sold to the farmers, that’s 2.2 per cent of the $26 per pound it sells for in the United States (Davis, 2008). Thus, not only are Starbucks exploiting the poverty stricken farmers of Guatemala through underpaying them, but they are also forced to work in virtual slave conditions in an unsafe and unsanitary environment. Hence, Starbucks uses the Globalised world to

Starbucks Inc is an international coffee house chain that is based in Seattle Washington, United States.

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

This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.

1. What factors in the global environment provide opportunities or threats for Starbucks? How do Starbuck’s strengths and weaknesses match up to its opportunities and threats?