Vertical Integration in Starbucks

REPORTING - Commodity risks and their volatile impact on profit and loss - Starbucks have a big exposure to dairy—to milk and didn’t have any means of fixing price with their suppliers. When it comes to coffee, Starbucks’ coffee trading group, which buys coffee worldwide, executes the risk management. Starbucks measure their

In addition to the trade-offs Howard Schultz and Starbucks made. Another consists of the company’s management deciding to invest a significant amount of capital to provide the highest quality coffee products for their customers. Providing quality coffee requires extreme dedication and

Starbucks has created a competitive advantage with their product quality by setting themselves apart from their competitors. “The Company has stayed with the upper-scale of the coffee market, competing on comfort rather than convenience, which is the case with its closest competitors, McDonald’s and Dunkin Donuts” (Mourdoukoutas, Panos). Consumers believe they are receiving a better product and experience when they purchase from a Starbucks as opposed to another large food service company that may sell coffee.

It’s a known fact that Starbucks is one of the leading brand in the market.When we analyse the market we find that Mcdonald 's and Dunkin are the competitors in the same product segment. So comparing Starbucks with these competitors will throw light on its grey areas, process and competitive edge in the market.

In Globalization era, more and more businesses seeking to expand their activities abroad. The expansion may create the opportunities for them to grow in other countries. Two major ways in which a company can exploit their resources is through organic and inorganic growth (Davis, n.d).

To ensure brand richness, Starbucks bring the best ingredients and quality control, they also assure that all the employees are constantly involved and be aware of its mission and vision.

The purpose of this letter is to propose the idea of opening a Roasting Facility in Toronto, ON Canada. This can be a very important investing opportunity for Starbucks, with over 800 Starbucks Coffee locations throughout Canada: having a plant there will benefit the company in many ways.

Starbucks’s has been able to surpass its rivals and continue being one of the premier roaster and retailers of specialty coffee in the world since its inception in 1985. Such an accomplishment has been sustainable due to a concrete company strategy. When Starbucks’s first debuted back in 1985 it was the first coffee shop to bring specialty coffees to the mass market in the United States. Along with only purchasing and roasting top quality coffee beans they designed their strategy in a way which gave the customer the ability to customize their drinks to meet each person’s individual preference. They also included free Wi-Fi in all of their stores, which in turn increased an already competitive advantage even more by not only offering customers

Starbuck’s had a specific strategy when it came to opening new locations. They believed more in licensing locations as opposed to franchising new stores because of the lack of control that comes with franchising. Starbucks also wanted to enter more international markets realizing that these new markets could increase revenues drastically. All of these things helped Starbucks as a rapidly expanding company.

Furthermore, Starbucks always involves with its customers and the community, providing customers with everything they want, and being continuously loyal to the customers while providing products that are good quality. Moreover, Starbucks also makes sure that the provided products are good at the beginning, rather than provides low quality products and makes improvement in the future. In order to do this, Starbucks gets the best ingredients possible and trains its partners properly so that is can prevent any defects in the products. To ensure that all products are with good quality, Starbucks always listens to feedbacks from its partners and its customers in order to better the process in which the products are made and the end result itself (Sandhu, M., Singh, R., Ratra, R. et

Starbucks is a very successful company but, there are several weakness in its aspect. First of all Starbucks cannot estimate the price of its coffee and company’s profitability. This is because Starbucks have large dependency on supplies of coffee beans from out of country plantations. This is a commodity and factor that cannot be controlled by the

Efficiency is defined as the quantity of inputs it takes to produce an output. Coffee takes nothing more than coffee beans. Starbucks seeks the highest quality beans grown in Latin America, the Pacific Rim, and East Africa. They do not deal directly with the bean growers, but instead deal with exporters with whom by from also do not buy directly from the growers. Though Starbucks is more than capable of growing their own beans due the entry barriers being extremely low, they have elected not to. Instead provide their exporters with extensive training to insure excellent relationships and high quality in the beans they receive.

Starbucks is competing in an industry where marketing principles has to follow the differentiator strategy or they will lose market share. The company goal is to create high value for its customers, or the customers will simply find another place to spend their money. Starbucks marketing principles are the basis of the company's competitive advantage within the coffee industry. Starbucks products are associated with high quality, and the company dedicates itself to producing high quality products. Because of this association with high quality, Starbucks has been able to charge a higher price or premium for its products. As long as the company can protect its reputation for high quality and strong values, it will be able to maintain its premium prices.

When Starbucks started their target market were people who enjoyed coffee not just for an energy boost from the caffeine, but people who enjoyed sitting down and drinking a well-prepared cup. Upon visiting Italy and falling in love with the coffee bars and the experience that they offered, Schultz envisioned a place between your home and work where you could sit and enjoy your coffee. Starbucks wanted to control their coffee from “raw green beans to the steaming cup” this meant that they had to talk with their farmers to make sure the quality was up to their standards. They were getting coffee from different places around the world that had different characteristics that would attract the type of coffee drinkers they wanted and tasted good. When preparing the coffee they first would ground the roasted beans, this was one of the ways that they attracted people to drink their coffee because it was freshly grounded before brewing. They used manual coffee pots to brew their coffee, which is more time-consuming but showed how dedicated they were with the quality of their product unlike other big companies. Starbucks was priced as a premium cup of coffee compared to other coffee shops, because of the steps they took to make a high-quality cup of Joe from start to finish. They put a lot of time and effort making sure that the atmosphere of

The question is what exactly goes into the process from cocoa beans in a field to a steaming cup of delicious coffee. Starbucks has created an amazing strategy of Supply Chain Management that spans across almost nineteen countries, that means cocoa beans can come from one country while milk could come from an entirely different nation hundreds of miles away. Through this global resource span Starbucks can expand the company and reach more countries than ever before. Starbucks also makes sure that they supply the best ingredients to their coffee drinkers for a lower price. All raw materials are sent to roasting manufacturing and packaging plants. Starbucks itself has six roasting manufactories, which seems very few for such a big company, but they are using a very effective centralized system.