starnicls

Coffee industry is a promising industry with low entry barriers. In coffee industry, besides the long and complicated value chain, it also has long product cycle and long production cycle since that the producing area is always located in remote and distant farms in undeveloped countries. Speaking of the coffee market, customers are more prefer to specific coffee than mix coffee, and independent coffee shop than beverage shop. Therefore, companies in coffee industry compete mainly on the quality of coffee bean and their add-value services.
Exhibit 1：Primary Activities of Starbucks’ Value Chain
Inbound Logistics Coffee bean producers mainly in African continent
Built up efficient supply chain management system
Production/
Operations Purchases and roasts high-quality whole bean coffees
Currently operating in 39 countries around the world with more than 13,000 stores and over 145,000 partners (employees)
Outbound
Logistics Retail Business Organization this involves selling of its products through its stores without any intermediates.
Specialty sales and marketing this involves selling their product to other places
Direct response: This involves handling order from the Internet or the mails and delivering.
Marketing/
Merchandising Product Promotion: Limited Price Variation; Limited Edition & Collaborative Product; Peripheral Product
Customer Loyalty: MSR card
Brand Recognition: Minimal Advertisement (based on word-of-mouth promotion)
Service/Store Operations Location: Prime location & Near Cinema
“Starbucks Experience”
Exhibit 2：Supply Activities of Starbucks’ Value Chain
Firm Infrastructure Business structures are well designed
HR Management Employee Engagement, Training, Good benefits
Technology Development Innovative mobile phone application
Procurement Procures its products from a diverse group of supplier
According to firm value chain graphics, Starbucks value chain system can be grouped into two categories: The primary