Starbucks Case Study

I. Company Profile

Starbucks is a #1 specialty coffee retailer in the United States. Worldwide, the company operates about 5,400 coffee shops in a variety of locations (office buildings, shopping centers, airport terminals, supermarkets). Outside of North America, Starbucks has 900 coffeehouses in 22 different markets. The first foreign coffee house was established in 1996 in Tokyo, Japan. By the end of 2001, the company will have approximately 400 stores in Japan, and a total of 815 stores in the Asia Pacific region. Starbucks has 32 stores in Britain, and over the last two years it has opened stores in Austria, Spain and Germany and has plans to expand into Greece and Italy. Stores in southern China and Macau are scheduled to open in late 2002. Starbucks is also exploring opportunities in Latin American, including in the countries of Argentina, Brazil, Chile, Colombia, Mexico, Peru, Puerto Rico and Venezuela.

At a Starbuck's retail coffee house customers can purchase coffee drinks and beans, pastries, and other food items and beverages, as well as mugs, coffeemakers, coffee grinders, and storage containers. The company also offers mail order and online shopping, sells its beans to restaurants, businesses, airlines, and hotels. Starbucks purchases its coffee beans from plantations in Africa, Southeast Asia, and the Americas. The company's objective is to make Starbucks the most recognized and respected coffee brand in the world.

II. Management of Overseas Environmental Issues

A. Management issues

Reporting structures, systems, and certifications

Starbucks foreign operations are organized in any of the following three ways: joint ventures, licenses, and company-owned operations. Starbucks operates the coffeehouses directly (or through a local subsidiary) or creates joint ventures with a company or group of individuals. This company or group develops and operates coffeehouses throughout a defined region.

Starbucks adopted its environmental mission in 1992. It has implemented is mission in four primary areas: environmental purchasing policies, waste reduction, energy conservation, and greenhouse gas emissions reduction. Starbucks employees are all trained about Starbucks environmental commitment. They are taught Starbucks core values, and they are continuously encouraged to think and act in respect to the environment. Starbucks has environmental policies and procedures in place that support the company’s commitment to environmental preservation.

Starbucks also has a Green Team that develops and implements Starbucks initiatives. a group of partners from North America who serve as a link to the retail stores on environmental initiatives such as waste reduction, energy and water conservation. Team members also provide critical feedback on measures that help the company minimize its environmental impact.

Starbucks has high operating standards for its suppliers. Suppliers get a Starbucks Supplier Handbook, which contains Starbucks environmental policies and goals and encourages the suppliers to adhere to them. Furthermore, Starbucks asks suppliers to eliminate over-engineered products, exercise energy conservation, minimize excessive packaging, incorporate paperless administrative system where possible, and maximize the efficiency of wood use in product design and construction projects.

Product design and stewardship

As one of Starbucks’ major areas for environmental performance improvement, the company has been working on minimizing its impact on forests and reducing the use of pesticides and herbicides. The result of this effort was introduction of Shade Grown coffee. The coffee is grown without synthetic pesticides, herbicides, or fertilizers, which helps maintain a healthy environment and clean ground water. Furthermore, growing coffee under shade does not require cutting down forests. Tree branches shelter the coffee plants from the intense sun and rain of the tropics. At the same time, the “shelter” provides critical habitats for plants, insects, migratory birds, and mammals. Natural biodiversity controls pests; therefore, farmers do not need to use large amounts of chemical. More than 10 million hectares are currently being used for shade coffee production. Farmers growing coffee in the shade protect tropical forests and increase retention of soil nutrients and moisture.

Auditing and management

Starbucks continuously monitors compliance with its own standards and official regulations. Furthermore, the company or a third party contractors conduct audits to ensure suppliers compliance on an on-going basis. Suppliers’ compliance is