Professional Documents
Culture Documents
Outline
STARBUCKS
I.
Inbound logistics:
a) Modernized Information Systems:
i. Using this system Starbucks ensures that the flow of
information is efficient. Locally, each branch controls the
amount of goods needed using a fully integrated database,
which allows Starbucks to maintain a very efficient inventory.
The use of such technology enables Starbucks to monitor the
growing demand in real-time.
b) Distribution Centers:
i. Each distribution center uses the same database and
information system to fulfill all branches requirements and
keep the global roasting centers informed through a real-time
demand updates. Giving Starbucks supply chain added
flexibility and making it able to address peaks in demand with
agility.
ii. Depending on the region, the stores are supplied by either large
regional DCs or by smaller warehouses called central
distribution centers (CDCs).
c) Reliable Logistic/Supply Partners:
i. Maintaining great business relationships with suppliers, is key
for Starbucks. Having a healthy relation adds value to its whole
PAGE 1
PAGE 2
PAGE 3
III.
IV.
Procurement:
a) Starbucks strategy for supply chain involves diversification of
suppliers to ensure stability of supply. The company agents travel
across continents seeking high grade raw materials in addition to
establishing strategic partnerships with all of
Starbucks global
suppliers.
V.
Operations Management:
a) Optimizing Capacity: Starbucks designs its processes to meet
fluctuation in demand, therefore, optimizing its global capacity and
PAGE 4
VII.
Marketing Strategies:
a) Getting personal with customers: Starbucks uses this strategy by
having all their employees ask for customers names while making
their order. This initiative has helped the company gain new
customers as well as retain its current ones.
PAGE 5
b) Adding value: The company offers free WiFi to all its customers and
that in fact has enhanced Starbucks sales and increased the demand
for its goods. Since a lot of people hit the coffee shop seeking internet
access while on the road or travelling in a new city.
c) Great word of mouth: word-of-mouth recommendations are a
cornerstone of Starbucks marketing strategy. The focus on this
strategy helps Starbucks minimize its marketing budget in new shops
for example to as little as 1% of the usual total marketing spending.
d) Great offers: The offers are usually focused around new products and
done in a very engaging but understated way, which often makes a
customer feel like theyre in on something that not everyone else
knows about.
VIII.
Manufacturing:
a) Frequent factory assessments: This strategy has been a key part for
Starbucks. Since they started the program in 2006, they continued to
work with more than 70 factories on programs to improve standards
and in 2013 they assessed 86 factories and found that 22 of them failed
to meet their standards. Even though Starbucks approach is to work
with suppliers to correct the issues, there are times when they halt
business due to the nature of the issues and until adequate resolution
takes place. While Starbucks was able to implement improvement
PAGE 6
Innovation:
a) Starbucks Mobile App: Starbucks has recently leveraged the use of
mobile applications and has an investment partnership with Square, a
mobile payments app that is integrated with its Starbucks app. This
creates an ease of use process for customers, aligns customer loyalty
through reward programs. Starbucks has already set the bar in the
industry with this advancement and according to different sources
about 10% of its transactions in the US have been made using mobile
applications.
b) New Distribution Channels: Starbucks introduced a beta version of a
delivery system called Mobile Pour. This presents a great opportunity
for the future by expanding their end product distribution systems
and could drive more revenue if the implementation is successful.
c) Full-scale coffee production: Starbucks purchased a farm in Costa Rica
used for research to learn more about a dangerous fungus. This move,
however, will allow the company to meet increased demand and gain
massive competitive advantage over other coffee manufacturers.
PAGE 7