Starbucks Case

One Response to Starbucks Case

• 

  Maria Cordoba on April 10, 2017 at 10:42 pm

  TEAM #1 Correct Answers:

  What lessons should be learned from the Chiapas project? What are the factors that produced the current results of the alliance between Starbucks and CI?
  Lessons learned from the Chiapas project:
  – Reputation- Social responsibility
  -Customer appeal- Customers reward that company is socially responsible
  -Sustainable Supply
  -High quality → premium brand
  -Continue to produce quality products
  Learning- environmental practices
  -Basis for expanding to similar initiatives
  Risk mitigation- prevent criticism, demonstrations

  Key factors in enabling success of SBX:
  -Hands on- worked directly with farmers (action oriented)
  -Value generation
  -Concrete goals
  -Success breed further success
  -Had similar goals- work related to their basic missions
  -Partnering experience- both companies had experience working with other co’s
  Top level support (management air cover)- SBX CEO eventually became a board member of CI
  -Managing the risk
  -SBX didn’t have to buy the coffee
  -CI could sell to anyone
  – SBX funds linked to specific responsibilites, time limited

  How valuable had the Starbucks-CI alliance been to both, and what should it’s future be?
  Value of the alliance:
  -For CI, the alliance meant the company had the means to continue operations.
  -Starbucks is a major supplier which they can leverage with others.
  -CI convinced Starbucks which meant that Starbucks knows coffee and at the same time CI knows conservacion which benefited Starbucks reputation.
  -CI helped to increase the quality control of the coffee
  -Starbucks encouraged CI’s farmer utilization practices.
  -There was a congruence of their philosophies
  -Starbucks paid premiums to farmers who adhere to CI’s guidelines

  Future of the alliance:
  The future will only tell, the companies have some conflicting goals which require management attention to manage it, monitor and drive success.

  How might the Fair Trade coffee operation be related to the shade-tree conservation coffee operation? How does SBX-CI relationship compare with relations with Fair Trade (FT) movements Global Exchange (GEX) / TransFair?
  -CI was collaborative – GEX was confrontational
  -GEX had no experience with collaboration
  -TransFair only interested in purchases/licenses: pushing Starbucks to buy products in large quantities
  GEX’s only focus
  -Not interested in collaboration
  -No way to integrate SBX’s desire to buy high quality coffee
  -SBX’s response was more charity that business relationship
  -SBX not committed to educating customers
  -SBX unsure it makes difference in customer behavior
  -Limited congruence of goals
  -SBX and CI’s goals overlapped and were better aligned than SBX and FT’s goals

  How should Starbucks and CI approach other roasters to adopt the sourcing guidelines?
  – Starbucks can continue their incentive system that will encourage other farmers to adhere to the same principles.
  -Both CI and Starbucks should keep communicating the benefits for the roasters in order to motivate and engage the prospective roasters.

  What is your assessment of the new coffee-purchasing guidelines? How should they be implemented?
  – Ensured environmental effectiveness
  -Inspired other suppliers to use the guidelines. These included:
  -Small farmers
  -Starbucks initiation in the incentive business which included:
  -Cash incentives for environmental change
  -This adds economic value to responsible practices
  -Sustainable coffee supply – the guidelines focus on cultivating high-quality coffee growers
  -Desire by Starbucks to make the guidelines industry wide by targeting retailers which included four giants like Nestle.
  -Not putting Starbucks at economic disadvantage of paying more for coffee

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