Introduction
The term ‘value chain’ was first coined by Michael Porter in 1985 to portray how the customer value builds up through a series of numerous activities to produce the desired product or service. It entails internal processes that an organization undertakes including design, production, marketing, delivery, and supporting the product to reach the prospective customer.
Primary activates such as inbound logistics and marketing among others are integrated into the activities of the company. Support activates complement the primary events that are executed by the organization’s staff. This paper aims at analyzing the value chain of the Starbucks Company by providing insight into its information systems.
Value Chain Analysis of the Primary Activates in the Starbucks Company
Inbound logistics for the Starbucks Coffee Company entail the identification and formulation of appropriate choices regarding the coffee producers in African Continent, which is the chief source. The utilization of effective information systems to facilitate the communication between the suppliers and agents leads to the delivery of high-quality coffee that meets the company standards.
The agents establish strategic relationships with the coffee suppliers in an attempt to organize the supply chain. The Starbucks Company operations involve more than fifty countries. They include direct operations and licensure of stores in different nations. The company operates over 8800 direct stores and more than 8100 stores under licensure globally.
Outbound logistics involve both direct selling of products through its stores and the current inclusion of supermarkets in the demand chain. Customers can obtain products such as the 3-in-1 from the leading supermarkets in many countries around the world (Seaford, Culp, & Brooks, 2012).
The Starbucks Company is a strong brand name that makes it undertake minimal marketing activities. This function highly depends on the word-of-mouth, premium quality of the products, and customer services. The Starbucks Company is known for offering superior quality products that are ingrained in its mission statement. The coffee company agents are trained in driving the company’s objective to ensure customer satisfaction.
Support Services in the Starbucks Company
The human resource management ensures that the staff is accorded the value they deserve as they are the drivers of the company’s chief agenda and objectives.
The HR does intensive training in the utilization of the management systems for monitoring and promoting the employee performance by adopting practices such as recognition and motivation (Seaford et al., 2012). The company has proactive training programs for staff development besides appraisal systems that have been put in place.
Systems Used in the Primary and Support Activates
The ERP Systems as a Primary Activates
With the complexity of operations involved in the supply chain of the Starbucks Corp., the coordination of every part of the system to contribute towards the company’s strategic goals and effective systems is necessary (Johansson & Newman, 2010).
It also uses the enterprise resource planning (ERP) system to organize its primary activities that encompass the identification, acquisition, and distribution of raw materials before converting them into finished products (Johansson & Newman, 2010). The systems help in facilitating a smooth flow of information amongst the company, suppliers, and customers.
The ERP is a business-oriented software that serves as a framework to integrate and automate the numerous and complex operations of a mega organization such as the Starbucks Coffee Company (Johansson & Newman, 2010). It links the business activities and information systems to the manufacturing, logistics, accounting, finance, and HR functions.
It gives the management the real-time view of the primary business activities and aids mid-way planning besides preparing both the company and customer a clear picture of the anticipated outcomes within a particular timeframe.
Appraisal Support System
Support services such as the human resource management, the company utilizes an employee appraisal system that generates daily, weekly, monthly, and/or annual reports on their commitment and performance. This information helps in determining the appropriate rewarding criteria for the workforce.
The system helps the Starbucks Corp. to track every operation including the status of employee commitment in their respective tasks (Laudon & Laudon, 2010).
Alignment of the ERP System with the Starbucks Corp. Strategy
The Starbuck Corporation utilizes the enterprise resource planning (ERP) to integrate its operations by ensuring effective communication amongst the constituent parts to deliver the desired customer value. In addition, it uses computerized coffee roasters that have improved consistency in the tastes of the product. This technological edge has ensured a sustained customer loyalty and retention.
Procurement is executed excellently in the Starbucks Coffee Company. Sourcing of the raw materials including the coffee beans, raw food items, and machinery is well coordinated as the functions are well-aligned with the company’s strategic objectives (Laudon & Laudon, 2010).
Conclusion
A value chain helps a company establish a competitive advantage by ensuring that each activity adds more worth to the products with respect to their relative costs.
In the realization of its significance, the Starbucks Company employs robust systems to help in delivering superior quality products to its customers around the world. Proper synchronization of all activities in the Starbucks Coffee Company has significantly contributed to the achievement of the best value possible of its products that are renowned worldwide.
Reference List
Johansson, B., & Newman, M. (2010). Competitive advantage in the ERP system’s value-chain and its influence on future development. Enterprise Information Systems, 4(1), 79-93.
Laudon, K., & Laudon, J. (2010). Information Systems, Organizations, and Strategy. Web.
Seaford, B., Culp, R., & Brooks, B. (2012). Starbucks: Maintaining a Clear Position. Journal of the International Academy for Case Studies, 18(3), 39-57.