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Distribution Strategy for Starbucks Coffee Company

Distribution

Starbuck Company imports coffee beans from farmers in different countries to its roasting factories in US. Coffee cherries from the farmer are taken to the mills for processing to beans. These mills belong to a cooperative society formed by farmers mostly in small scale farming, large farms own mills or by middlemen who buy cherries from the farmers. After conversion to beans the product is then exported, through government coffee boards in that particular country or from private exporters to, US. Here it is inspected and stored in warehouses until it is shipped to the Starbucks roasting factories in Kent, Washington; York, Pennsylvania; and Carson Valley, Nevada (Starbucks, 2009)

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In the roasting factories, beans are roasted and blended to specialty coffee brands sold by Starbucks. This is done to maintain a consistent flavor characteristic of Starbucks coffee brands. Special packaging is also done to guarantee quality and freshness and then shipped to Starbucks stores worldwide and directly to the consumer through supermarkets.

Franchise operations are an avenue for Starbucks products such as airports, bookstores and college campuses. The company has an agreement with Albertsons food chain to operate Starbucks coffee bars in its supermarkets where other company products are sold and Kraft Foods Inc among others.

By September 2001, the company had 5,500 accounts to its name through which it supplied coffee as whole beans as well as ground coffee. The main customers for these products are office coffee distributors as well as food service companies located in institutions (Starbucks, 2009).

The company also sells whole beans and ground coffees to office coffee distributors, institutional foodservice companies, where it had approximately 5,500 accounts by September 2001.

Warehouse club chains where Starbuck products are distributed by Kraft Food Inc and a joint venture with Pepsi-cola Company where the company develops and distributes ready-to-drink coffee based products such as Frappucino Coffee drink.

Starbucks also operate their own retail stores in high streets in major cities of the world with 16,120 retail stores in 49 countries. These stores are involved in the production and sale of bottled frappuccino coffee drink, supply of whole bean coffees in supermarkets, a range of premium ice creams, Tazo teas as well as Othos water. The products are sold in Starbucks’ retail stores and also to the supermarkets and large stores all over the world (Starbucks, 2009).

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Logistics

Starbuck out sources its transport logistics services for its products to the stores and the wholesalers and the coffee from the countries where it is grown. These services are inclusive of warehousing and delivery. Example is in Canada where HFS North America exclusively handles its logistics. The logistics services companies then use the road, rail, sea or air transport to this end.

Physical facility

Starbucks has its headquarters are located in Seattle, Washington at the Starbucks Center where operations such as marketing, finance, store development, supply chain management and information technology are carried out. The factory facilities are located in the US in Kent, Washington; York, Pennsylvania; and Carson Valley, Nevada.

The Starbuck coffee stores are located in prime streets in major cities of the world. The stores are decorated in brown color scheme and leathery chairs, neatly fitted between cubbyholes are bookshelves and traditional furniture. There are also community notice boards. Outside the stores is the company logo, which is designed into a mermaid curved from bronze over the words “Fresh roasted coffee”. However, stores are designed according to the influences of the community and locality (Burgess, 2009).

Inside the shops also is the entertainment and merchandise sections where music, films, gifts with Starbuck logo, coffee making machines among others are sold.

Competitive advantage

Starbuck has competitive advantage over small independent coffee stores in the UK market. It bought Seattle Coffee Company and used the increased resources and influence to get prime locations (Starbucks, 2009).

Starbuck has no competitive advantage with Costa Coffee and Caffé Nero in the market this is because they are lacking in unique and quality coffee the other two are offering quality and distinct taste coffee. The customers are accusing it of being “brand fatigue” (Burgess, 2009).

Starbuck has no competitive advantage over MacDonald and Dunkin due to the competitors’ use of low cost. They sell their quality coffee cappuccino at much lower prices than Starbucks (Seib, 2009).

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Reference

Burgess, K. (2009). Starbucks adds local flavor to stores in bid to win back customers. New York Times Online. Web.

Seib, C. (2009). Starbucks says more customers visit and spend more. New York Times Online. Web.

Starbucks. (2009). Facts about Starbucks Coffee Company. Starbucks Coffee Company. Web.

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StudyCorgi. (2021, November 11). Distribution Strategy for Starbucks Coffee Company. Retrieved from https://studycorgi.com/distribution-strategy-for-starbucks-coffee-company/

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StudyCorgi. (2021, November 11). Distribution Strategy for Starbucks Coffee Company. https://studycorgi.com/distribution-strategy-for-starbucks-coffee-company/

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"Distribution Strategy for Starbucks Coffee Company." StudyCorgi, 11 Nov. 2021, studycorgi.com/distribution-strategy-for-starbucks-coffee-company/.

1. StudyCorgi. "Distribution Strategy for Starbucks Coffee Company." November 11, 2021. https://studycorgi.com/distribution-strategy-for-starbucks-coffee-company/.


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StudyCorgi. 2021. "Distribution Strategy for Starbucks Coffee Company." November 11, 2021. https://studycorgi.com/distribution-strategy-for-starbucks-coffee-company/.

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StudyCorgi. (2021) 'Distribution Strategy for Starbucks Coffee Company'. 11 November.

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