There are predominantly four segments within the coffee industry like wholesale, Coffee roasting,

In-home retail market, and Out-of-home market. These segments affect the factors of
macroeconomics and value chain of the industry and results in some impacts like Gross Value (GVA)
impacts, Output impacts, Employee compensation impacts, and Employment impacts.

Analysis:
The key feature of the Starbuck’s supply chain lies with the roasting centres and there are around 6
roasting centres around the world which prepares coffee beans. They have also announced to build
a new roasting centre in China (Starbucks, 2020).

Figure 1: Basic Supply chain of Starbucks Corporation

The supply chain actually starts with plantation and then followed by processing in roasting centres
and finally through the logistics to the coffee shops and stores. Eventually, the corporation grew
tremendously so do the supply chain issues such as supply chain costs and operating costs. As a
result, in 2008 the Starbucks corporation took some major initiatives in changing the supply chain.
They planned for reorganizing and transforming the existing supply chain by establishing three key
objectives. The three key objects are to recognize the organization of the supply chain, cost
reduction to serve the stores and execution improvement, and laying the foundation for the future
supply chain. These objectives are set in reference to the qualitative analysis and supply chain cost
assessment done by the corporation (James, 2010). This made sure that the supply chain activities
and distribution stages fall in one of the functional groups of Plan, Source, Make, and Deliver. After
this segregation the functional groups are assessed for cost reductions. These are again followed by
sustainable principles to carry the same to the future supply chain strength.
 Figure 2: Distribution Flow Chart

Eventually, the corporation also set to escalate some brand goals of letting only ethically sourced
goods to be sold through limiting the supply chain. This technique is aimed to lift the corporation in
an ethical way and to prompt the sustainability in the Starbuck’s products. They drove this concept
through some established activities set by Coffee and Farmer Equity standards (C.A.F.E) and Coffee
Sourcing Guidelines that includes covering quality, economic accountability and transparency,
corporate social responsibility, and leadership in environmental activities ( Thomasnet.com, 2019).
Afterall, they grew to be one of the best ethically certified coffee and sustainable food and beverage
corporations. Later to strengthen the supply chain and boost the sustainability factors Starbuck
launched a traceability pilot program to empower for small-scale farmers by sharing real-time
knowledge over coffee bean production.

Starbucks involves and undertook many sustainability activities to regulate the Corporate Social
Responsibility of the company. The key activities that the company includes are waste reduction and
recycling, energy conservation, green building, responsibly grown coffee, ethically sourced coca and
tea, supporting the community and farmers, and ethos water funding. Starbucks is one of the top
companies in the industries in terms of organized Corporate Social Responsibility and it is actively
involved in combining the activities linked to the triple bottom line (social, environmental and
economic perspectives) (Harnrungchalotorn, and Phayonlerd, 2019). Furthermore, they involved
some business ethics to the supply chain which have boosted the company to the next extent. The
company will follow three basic ethics like treating the suppliers equally regardless of the scale of
the supplier (Major suppliers and Minor sup[pliers), empowering supplier to create better
relationships, and train and educate the supplier to understand the business and work with much
efficiency (Pratap, 2019).
Afterall, other reports like (UKessays.com, 2018) say that Starbucks is also facing many other issues
due to its inadequate marketing strategy on advertising it products. As Starbucks only purchase the
coffee beans with premium quality the cost on a cup of coffee is also high and this refers to the
competitor’s advantage. The current financial crisis in the world economy is forcing the corporation
to shut down many coffee shops.

Moreover, the Starbuck’s generic business strategy is mainly based on their generic value chain
which is a congregation of different major and support activities. As an overview of the Starbuck’s
value chain it consists of primary activities include inbound logistics which represents the
procurement of coffee beans, operations that refers to the business dealings around the world,
outbound logistics like delivery to the stores and shops. Other primary activities include Marketing
sales and service which refers to the operations like market development strategies, lead
generation, and customer service and satisfaction (Thesisleader.com, 2020).

Figure 3: Starbuck's Value Chain.

The primary activities are always addressed by the support activities such as firm infrastructure that
represents the store infrastructure and other infrastructural insights, human resource management
that refers to the employees of the company, technology development that refers to usage of
innovative technology to reduce time and efforts, procurement that refers to the importing and
acquiring different products and components from the suppliers. Overall, the business strategy of
the corporation is designed in respect to the competitive advantage and its scope with a pure
emphasis on marketing strategies of the company through the management of differentiation and
cost of the leadership.

However, the company follow a generic approach to maintain the business strategy but according to
(Fundera, 2017), the company can follow the business strategy that includes customer service,
consistency and quality of both product and service as key objectives can provide with better and
optimization of the business.

SWOT Analysis:
The internal and external factors that have been considered in this SWOT analysis can give a glimpse
of the company’s performance and lay a structure to get the recommendations out of the analysis.

Strengths Weakness
  Fame and brand image
 Established global supply chain with
many developed nations involved and a
huge retail distribution system
 Moderate diversification
 Best quality
 diversified product list
 extensive supplier relationships
 Huge capital funding capabilities
 Employee motivation and social value
Opportunities
 Expansion in developing markets
 Franchising and collaborating with other
firms
 International business expansion
 Extending the brand name to new
products lines and business areas
 Integrating and diversification of the
product range to different food items
 Most of the products have generalized
standards
 Dependence on single source of
business/income
 Prices are relatively higher compared to
the other coffee companies
 Strong dependence on suppliers
 Sales only in stores
 Uncontrolled expansion
Threats
 Competition that refers to coffee
providers with less cost
 Imitation
 Coffeehouse movements independently
 Competitors who are exhibiting huge
capital funding capabilities such as Costa
coffee, McDonald’s and Dunkin Donuts
 Economic terms are making the
consumers to pay higher prices
unwillingly
 Threats over customer satisfaction
 National and International political
exploitations may affect business
expansion
 Globally the coffee industry is
approaching a saturation stage