Integrated Make-to-stock Model

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The Supply Chain Model

Integrated Make-to-stock Model

Benefits are:

Tracks demand in real time

Helps modify production plans and schedules

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C.A.F.E Practices

• Strong brand recognition

• Joint ventures with Pepsi, Kraft, and Unilever 

• Need to increase advertising

4. SALES, MARKETING AND DISTRIBUTION STRATEGY

• Digital software to assist with design of stores 
(cuts down costs and time)

• Software for managers for scheduling

• Partnership with AT&T for WIFI 

• Partnership with ITunes
6. INFORMATION TECHNOLOGY STRATEGY

•Strong compensation including medical benefits and stock options

•They value their employees by calling them partners and treating them as such

•Leads to high morale and motivation

•High degree of training

•Organizational values disseminated throughout the organization

•Strong 'partner' incentive/recognition programs.

•Blanket expansion strategy has lead to closure of many stores 

•Encourage 'partners' be straightforward with managers
5. HUMAN RESOURCE STRATEGY (CONTINUED)

•2007 – Huge addition to long-term debt

•2008 - Restructuring costs implemented 

•2009 - Paid off all short term debt 

2009-2010 - Continuous improvement each quarter
7. FINANCIAL STRATEGY

OVERALL PERFORMANCE EVALUATION SCORE

*Based on average calculations from seven key functional areas
What is the nature of Starbucks competitive advantage?
1. Strong marketing and distribution via several joint ventures (RESOURCE BUNDLE)

2. Brand recognition (INTANGIBLE RESOURCE)

3. High ranking employer with highly trained "partners" (CAPABILITY)

4. Supply chain (RESOURCE and CAPABILITY)

5.Diverse Selection of products (CAPABILITIES)
What are the main strategic issues that Starbucks management needs to address in order to sustain the company’s growth and improve financial performance?
FB1 #1: Slow Aggressive Expansion Strategy

FBI #2: Increase Advertising Efforts 

FBI #3: High Price Points

FBI #4: Expand Production Facility to China
5. HUMAN RESOURCE STRATEGY
Deliver
Source
Make
Coffee and Farming Equity
Environmental sustainability
Better predict supply shortages

...