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In 2005, Starbucks Corporation, the world's largest specialty coffee retailer, had annual revenue of $6.4 billion. Due to its high growth rate, the company is looking into the security of having enough supply of high-quality coffee beans to sustain the business. In its quest to ensure a sustainable supply of their high-grade coffee, the company partnered with Conservation International in developing a program called the Coffee and Farmer Equity Practices (CAFE Practices).
Hau Lee, Stacy Duda, Lashawn James, Zeryn MacKwani, Raul Munoz, David Volk
Harvard Business Review (GS54-PDF-ENG)
May 01, 2007
Case questions answered:
- What type of information system do you suggest for Starbucks Corporation to help them gain economic transparency?
- How can Starbucks effectively communicate the revised requirements and practices to farmers, suppliers, and other members of the industry?
- How do you analyze the impact of the social responsibilities taken by Starbucks on its business?
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Starbucks Corporation: Building a Sustainable Supply Chain Case Answers
1. What type of information system do you suggest for Starbucks Corporation to help them gain economic transparency?
Some members of the supply chain of Starbucks Corporation had a very poor information system which made it difficult to gain economic transparency.
As part of its obligation to be transparent, suppliers had to show financial openness with respect to the money paid to farmers. Suppliers were evaluated for a variety of environmental and social factors when the initial requirements were met.
All suppliers were valued not only for their performance but also for the strength of their agricultural supply network.
Farmers have been rewarded for coffee cultivation and processing techniques that save land, water, and energy while reducing their impact on the environment. CAFE’s policy also urged farmers to ensure that workers’ wages meet or exceed the minimum legal requirements set by local and national legislation.
2. How can Starbucks effectively communicate the revised requirements and practices to farmers, suppliers, and other members of the industry?
Anybody who scores above 60 is considered as a preferred supplier for Starbucks Corporation. And if anybody scores above…
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