Starbucks Essay -- Business, Supply Chain, Coffee Company

In a tot up chain, dispersion means the steps required to move and store a product from supplier stage to customer stage. It is an important driver for overall profitability of a company because it affects both the supply chain cost and the customer experience directly. (Chopra and Meindl, 2010, p68) A normal distribution network of hot chocolate bean distribution scheme is like this (Starbucks chocolate Company, p22)In order to enforce its exacting cocoa standards, Starbucks tries its best to catch the whole supply chain. The company works with growers in various countries to leverage green coffee beans, oversees the custom-roasting process for the companys various blends and single-origin coffees, and controls the distribution to retail stores in the U.S. and around the world. Starbucks engages in a wide range of distribution including partnership, its company-owned stores and license products. Since Starbucks is a well-known brand, they use the third party relationsh ips to attract opposite companies and expand their business. While licensed product part is not a large portion of the companys revenues (4% in 2008), these items are an intact part of familiarizing customers with the Starbucks name and developing brand loyalty. (Crowe Remle, 2010) Starbucks not alone sells coffee and some simple food to consumers, it also sells beans and ground coffee to businesses such as airlines, super market places, department stores, and ice-cream makers. In a complex distribution network, information technology helps a lot. Starbucks successfully integrates all sources of demand and matches it with the supply by using Oracles automated information system for manufacturing (GEMMS). The GEMMS system handles distribution planning, manufacturing scheduli... ...rbucks locations in 14 markets including Thailand, Korea, Beijing, Shanghai and Hong Kong. (Starbucks entry into China, p12). Starbucks also has a partnership with the Chinese government and local uni versities to grow coffee in Yunnan province. (Starbucks entry into China, p13) Starbucks also has its first entry into European coffee market. Starbucks has a partnership with Arla Foods as its licensed partner to manufacture, distribute and market the premium ice coffee products for supermarkets, convenience stores as well as Starbucks own coffee shops in Europe. Arla Food is one of the largest dairy companies in Europe and provides a highly developed distribution network for ready-to-drink products on key markets for Starbucks in Europe. As we see, Starbucks expands their distribution network by grammatical construction up partner relationship with other organizations overseas.