The third question of our presentation is how Starbucks gain competitive advantage in the industry

through its supply Chain?

In order to understand this, we need to do value chain analysis of Starbucks.

This includes both primary and support activities. Firstly let’s start with the primary activities os
Starbucks. First we have Inbound logistics.

The inbound logistics for Starbucks refers to selecting the finest quality of coffee beans from the
company appointed coffee producers in Latin America, Africa and Asia. the green or unroasted
beans are procured directly from the farms by the Starbucks buyers. These are transported to the
storage sites after which the beans are roasted and packaged. These are now ready to be sent to
the distribution centers

Operations
Starbucks operates in 65 countries either in the form of direct stores operated by the company or
as licensed stores. According to its annual report, the company generated 79% of the total
revenue during fiscal year 2013 from its company operated stores while the licensed stores
accounted for 9% of the revenue.
Outbound Logistics

Customers can purchase Starbucks products from company-operated and licensed stores. Online
sales channel is also utilized by Starbucks for certain range of products such as packaged coffee,
tea, drinkware and drink-related equipment. In addition, a very limited range of Starbucks products
such as 3-in-1 coffees in sachets can be purchased from a set of leading supermarket chains such
as Wal-Mart, Tesco

Marketing and Sales

Starbucks invests in superior quality products and high level of customer services than aggressive
marketing. However, need based marketing activities are carried out by the company during new
products launches in the form of sampling in areas around the stores.

Service. Superior customer services are the core source of Starbuck competitive advantage and this
particular primary activity adds an enormous value to the brand image. Starbucks baristas are
always genially polite and greet regular customers by their names. Occasionally, regular customer
may get their regular coffee free of charge at the discretion of baristas as good gesture and such
acts increase the perception of the service quality to a considerable extent.

Infrastructure
Starbucks has a strong infrastructure. Its well designed and pleasing stores are
complemented with great customer service provided by the dedicated team of employees /

Human Resource Management.

Starbucks employees are motivated through generous benefits and incentives. The company is known
for taking care of its workforce and this is perhaps the reason for a low turnover of employees, which
indicates great human resource management.

Technology Development
Starbucks is very well known for use of technology. Many customers use Starbucks stores as meeting
place because of the free and unlimited wifi. The company ialso launched mystarbucksidea.force.com as
a platform where customers can ask questions, give suggestions and openly express opinions and share
experiences. Starbucks also uses Apple’s iBeacon System wherein customers can order their drink
through the Starbucks phone app and get a notification when they walk in the store.

Procurement
 At Starbucks procurement has received a lot of attention. The brand has set strict
rules related to the selection of its suppliers and product quality. In terms of
procurement, Starbucks has always focused on sourcing its material from
suppliers that guarantee quality and follow ethical practices.