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Globalization - Coffee & Value Chain. What is the likely value chain of a coffee shop? For example, how did the varieties of coffee beans get there? What is the likely effect of market globalization on coffee shops? Do technical advances play any role in

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Introduction

Imagine you are studying for your international business class at a local coffee shop. The manager spies your textbook and remarks, "I don't get all that foreign business stuff. I don't pay much attention to it. I'm a local guy running a small business. Thank goodness I don't have to worry about any of that." The manager's comments make you realize there is much more to business than just local concerns. What is the likely value chain of a coffee shop? For example, how did the varieties of coffee beans get there? What is the likely effect of market globalization on coffee shops? Do technical advances play any role in the shop's value chain? Does globalization imply any negative consequences for the worldwide coffee industry? Justify your answer. The coffee shop manager is na�ve to think he is simply a local guy running a small business and that international business is somehow irrelevant, ...read more.

Middle

Below is an illustration of the coffee value chain. http://www.teacoffeecocoa.org/tcc/Commodities/Coffee/Value-Chain "Coffee producers are facing sustainability challenges on social, economic and environmental fronts." They face difficulties such as inadequate access to infrastructure, financial and market resources. The social well-being of farmers, plantation laborers and their respective communities are being directly impacted by declining coffee prices. Coffee-producing countries earn very little from the sale and export of their produce, and large shares of the profits within the coffee supply chain go to a middleman or the large roasters. http://en.wikipedia.org/wiki/Coffee#Cultivation International coffee trading companies invest in operations in coffee-producing countries to help meet the needs of major roasters, who in turn make profits from roasting the coffee. A strong brand strategy, product development, and low-priced green coffee have contributed to considerable profit margins. While there are only a handful of companies which control this trade, the success of the Fairtrade movement has been paramount in roasters beginning ...read more.

Conclusion

Educating himself on the coffee value chain and ensuring his suppliers comply with international labor regulations and workers' rights would be a start toward becoming a more responsible, accountable business manager. "Globalization impacts every aspect of the coffee industry. International laws regulate the industry and try to prevent price spikes and dips. Major corporations try to shape the market and influence which beans are grown and how they are processed. Farmers around the world are joining cooperatives, often funded and supported by international NGOs, to obtain better prices for their crops, as well as gain needed social services for their communities. Not all of the impacts are positive though, environmental degradation and greedy commodity traders can certainly hurt the industry and its supply chain." Tropical Commodity Coalition http://www.teacoffeecocoa.org/tcc/News/Coffee Cup of Joe: Globalization and Coffee http://www.globalization101.org/news1/Globalization_Coffee ?? ?? ?? ?? BA343-International Business_D.Stein 1 of 3 ...read more.

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