Starbucks - University of Notre Dameagervais/documents/Starbucks.pdfStarbucks By Vince Saladino,...
Transcript of Starbucks - University of Notre Dameagervais/documents/Starbucks.pdfStarbucks By Vince Saladino,...
History
1st Starbucks opened in 1971 in Seattle
1st International Starbucks opened in 1987 in Vancouver
By 1996, Starbucks was opening stores in Asia
Starbucks Today Internationally
Over 22,000 stores in 67 countries
Seoul is the most Starbucks-filled city
Canada, China, and Japan have the second, third, and fourth most Starbucks
20% of total revenue comes from abroad
Intermediate Input: Coffee Supply Chain
Mostly small-scale farms
About 60,000 total mills for 70,000 farms
“Import” takes place between Processor/Mill and Roaster
491 Million Pounds represented 2.6% of world coffee production in 2012
Coffee Sources
4 Regions: Central America, South America, East Africa, Southeast Asia
Tropical, mountainous regions of developing countries
Imports from 14 of top 15 Arabica exporters (India excluded)
“Ethically Sourced Coffee”
C.A.F.E. (Coffee and Farmer Equity) Practices -99% of coffee verified
Assess Product Quality, Economic Transparency, Social Responsibility, and Environment
Farmer Support Centers in 6 countries
Hacienda Alsacia – Costa Rica farm open-sourced agronomic research
Root Capital: $20 million in farmer loans
C.A.F.E. Practices vs. Fair Trade
Only 8.4% certified of Starbucks coffee sources fairtrade certified in 2014
Starbucks still largest buyer of fairtrade coffee in world
Kelsey Timmerman - Failed verification of C.A.F.E. practices in Colombia
Why invest in ethical sourcing?
What Does Starbucks Actually Trade Across Borders?
Starbucks, in a way, trades to obtain these various intermediate inputs
It does not, however, ship cups of coffee around the world
Thousands and thousands of chains make the coffee, hot chocolate, and tea on demand and sell to consumers
Although one can purchase coffee beans from Starbucks at one of these chains or via its website, these sales do not make up a majority of Starbucks’s revenue
Firm Side
● Starbucks Coffee Trading Company
● Lausanne, Switzerland
● Staffed by about 30 highly educated employees
● Manages Starbucks Farmer Support Centers located around the globe that specialize in agronomic training
● Oversees buying of, risk management for, and sustainability programs for coffee, cocoa, and tea
Consumer Side
Brand image associated with Starbucks products and Starbucks stores
Coffee is either fair trade or ethically sourced
C.A.F.E.
With few exceptions, customers know what they will get no matter which Starbucks they go to
Sense of familiarity
“The value added to a cup of Starbucks coffee is the safe, unhurried comfortable environment that is not home or the workplace. This has become its brand identification.”
Comfort of Home
Maintains favorite menu items
Familiarity
Names on the cups
Same insides
English + Language
“Home away from home”
–http://www.buzzfeed.com/jessicamisener/starbucks-menu-in-
Italy vs. Starbucks: Italians2017 Starbucks in Milan, Rome(?)
“Dumbed-down Italian-style coffee”
Howard Schulz was inspired by Milan
What happens if Italians reject Starbucks coffee?
What are the chances of this happening?
Italy vs. Starbucks: ‘Bucks
Specialized enough to succeed?
Headquarter services
Ambiance
Appeal to comfort
Travelers
Works Cited
http://www.statista.com/statistics/219513/starbucks-revenue-by-product-type/
http://www.forbes.com/sites/alicegwalton/2012/05/29/starbucks-hold-on-us-is-bigger-than-coffee-its-psychology/#75d241a21f50
http://www.wired.com/2016/03/starbucks-will-succeed-italy-not-really-selling-coffee/
http://www.starbucks.com/responsibility/sourcing/coffeehttp://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-newsArticle&ID=345686