BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Starbucks uses both forward and backward vertical integration to maximize profits. By maintaining direct relationships with coffee growers and owning their equipment, storage, and roasting facilities, Starbucks can control its entire manufacturing process.

Detailed explanation-2: -An example of backward integration might be a bakery that purchases a wheat processor or a wheat farm. In this scenario, a retail supplier is purchasing one of its manufacturers, therefore cutting out the intermediary, and hindering competition.

Detailed explanation-3: -Global coffee brand, Starbucks uses a vertically integrated supply chain to surpass its rival, Dunkin’ Donuts. The company is involved in every step of its supply chain process, from the coffee beans to the cup of coffee sold. With this system, Starbucks works directly with its nearly 300, 000 coffee growers worldwide.

Detailed explanation-4: -Starbucks & Vertical Integration Howard Schultz calls Starbucks’s business model “vertical integration to the extreme, ” because the company buys and roasts all its own coffee and sells it through entirely company-owned stores.