Coffee Acquisition Strategies: Contracts
As Creolé Coffee had gone through its recent expansion, one of the most limiting
factors was the availability of the type and quality of coffee necessary to
consistently provide the product coffee drinkers had come to expect. In order to
guarantee that the company has access to the type of product needed to uphold its
reputation, Jim proposed that Creolé develop a network of producers throughout the
prime coffee producing regions of the world. Contractual arrangements would be
establish with these producers whereby Creolé would guarantee a lucrative price
and provide technical assistance to the producers in return for the supply of a
specified quantity and quality of coffee beans.
Coordination of an activity of this type would entail more than the simple
development of contractual arrangements: it would involve the establishment of
trust between Creolé and the producers. Yet, if this trust could be established in the
long-run, much more would be achieved than supply management goals. Enhanced
producer relations and the resulting stability in both input prices and qualities
would, in turn, enhance consumer relations as the company is able to provide a
consistent quality product at a stable price.
Coffee Acquisition Strategies: ContractsAs Creolé Coffee had gone through its recent expansion, one of the most limitingfactors was the availability of the type and quality of coffee necessary toconsistently provide the product coffee drinkers had come to expect. In order toguarantee that the company has access to the type of product needed to uphold itsreputation, Jim proposed that Creolé develop a network of producers throughout theprime coffee producing regions of the world. Contractual arrangements would beestablish with these producers whereby Creolé would guarantee a lucrative priceand provide technical assistance to the producers in return for the supply of aspecified quantity and quality of coffee beans.Coordination of an activity of this type would entail more than the simpledevelopment of contractual arrangements: it would involve the establishment oftrust between Creolé and the producers. Yet, if this trust could be established in thelong-run, much more would be achieved than supply management goals. Enhancedproducer relations and the resulting stability in both input prices and qualitieswould, in turn, enhance consumer relations as the company is able to provide aconsistent quality product at a stable price.
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