Starbucks 's Coffee Market By Selling Expensive And High Quality Coffee Essay

Starbucks 's Coffee Market By Selling Expensive And High Quality Coffee Essay

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Starbucks is a premium coffee retailer, which started in 1971. It is established in 70 countries all over the world. Starbucks has revolutionized the coffee market by selling expensive and high quality coffee. It has marketed itself as a third place between home and work. They select the locations in such a way that Starbucks is on their way to work and while coming back home from work.

Starbucks purchases beans from Latin America, Africa, and Asia and roasts high-quality whole bean coffees and sells them, along with handcrafted coffee, ready-to-drink beverages, tea beverages and a variety of fresh food items, through company-operated retail stores. They sell coffee and tea products and license trademarks through other channels such as licensed retail stores. In addition to the flagship Starbucks brand, the portfolio includes brands such as Tazo Tea, Seattle’s Best Coffee.

The main objective of Starbucks is to maintain standing as one of the most recognized and respected brands in the world. To achieve this goal, they plan to continue disciplined expansion of retail and licensed store base, primarily focused on global growth. In addition, by leveraging the experience gained through the traditional store model, they offer consumers new coffee products in multiple forms, across new categories, and through diverse channels.

Starbucks Corporation have been exponentially growing in terms of sales and profit. Between 2006 and 2015, the company has its net profit margin double, while its revenues have increased by nearly 150%. The number of stores has gradually increased from 2003 to 2008. From 2008 to 2010, Starbucks mainly focused on improving their Supply Chain and Operations which resulted high supply chain expenditure. This le...


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...by smaller warehouses called central distribution centers (CDCs). Starbucks uses 33 such CDCs in the United States, seven in the Asia/Pacific region, five in Canada, and three in Europe; currently, all but one are operated by third-party logistics companies. The CDCs carry dairy products, baked goods, and paper items like cups and napkins. Frequent deliveries are made to Starbucks’ own retail stores and other retail stores that sell their product via dedicated truck fleet which combine coffee with other items.

Delivery was the major concern during the downfall of Starbucks during 2008. To address this concern Starbucks developed a simplified system to assess a 3PL’s performance. Vendors are assessed on scores of 0 to 1. If a shipment arrives late or with any missing items, then the 3PL would be given 0. Alternatively, if the delivery is correct a score of 1 is given.

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