Starbucks Coffee Supply Chain
1. Introduction
Globalization is “the integration of economies around the world through the movement of goods, services and capital across borders” and is a dynamic process through which companies, corporations and organizations leverage their strengths, magnify their reach, and decrease costs by outsourcing multiple business processes (IMF Staff, 2008). The globalization of Starbucks’ supply chain played a crucial role in attaining organizational success, having a significant impact on its business operations. This report aims to analyze the challenges that globalization presents in a constantly evolving market, and evaluate the solutions that Starbucks has implemented to manage these challenges.
2. Background
Starbucks started out as a small coffee retailer in Seattle, Washington in 1971, growing exponentially over the next 4 decades. With over 17,000 stores across 55 countries today, Starbucks stands as the leading specialty coffee retailer in the world and is one of the top 5 international coffee buyers (C.A.F.E. Practices, 2012). In 2012, Starbucks sold 4 billion cups, or 428 million pounds of coffee (Munson, 2013). Since then, Starbucks has diversified to offer a variety of food and beverage options, including over 87,000 drink combinations, sandwiches and an array of commercial products (Eco-management for Food, 2012).
Starbucks’ incredible growth (See Appendix A) in a short span of time required expansion of its global supply chain in order to cope with the demand. Due to the extensive diversification of Starbucks products, this report will focus solely on the globalization of Starbucks’ coffee bean supply chain.
Starbucks’ global supply chain of coffee is divided into 3 main steps: production, packaging, and distribution. These steps were strategically engineered for cost cutting, operational efficiency and profits. Production, or coffee cultivation occurs in countries across the equatorial belt to capitalize on optimal climate condition, while
Globalization is “the integration of economies around the world through the movement of goods, services and capital across borders” and is a dynamic process through which companies, corporations and organizations leverage their strengths, magnify their reach, and decrease costs by outsourcing multiple business processes (IMF Staff, 2008). The globalization of Starbucks’ supply chain played a crucial role in attaining organizational success, having a significant impact on its business operations. This report aims to analyze the challenges that globalization presents in a constantly evolving market, and evaluate the solutions that Starbucks has implemented to manage these challenges.
2. Background
Starbucks started out as a small coffee retailer in Seattle, Washington in 1971, growing exponentially over the next 4 decades. With over 17,000 stores across 55 countries today, Starbucks stands as the leading specialty coffee retailer in the world and is one of the top 5 international coffee buyers (C.A.F.E. Practices, 2012). In 2012, Starbucks sold 4 billion cups, or 428 million pounds of coffee (Munson, 2013). Since then, Starbucks has diversified to offer a variety of food and beverage options, including over 87,000 drink combinations, sandwiches and an array of commercial products (Eco-management for Food, 2012).
Starbucks’ incredible growth (See Appendix A) in a short span of time required expansion of its global supply chain in order to cope with the demand. Due to the extensive diversification of Starbucks products, this report will focus solely on the globalization of Starbucks’ coffee bean supply chain.
Starbucks’ global supply chain of coffee is divided into 3 main steps: production, packaging, and distribution. These steps were strategically engineered for cost cutting, operational efficiency and profits. Production, or coffee cultivation occurs in countries across the equatorial belt to capitalize on optimal climate condition, while
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