Global Market Case Study

Establishing an ethical supply chain could positively influence human lives and the environment. An ethical supply chain ensures that the people involved in the production process are treated fairly. This involves providing them a decent living wage, placing them under decent working conditions, and giving them the treatment that any human deserves. It also ascertains that the production of a company has positive environmental consequences. This means using sustainable resources only and limiting pollution. The local communities could also benefit from a company’s ethical supply chain.

A company that employs an ethical supply chain treats the host area where the business is located with respect. It also observes the local customs, obeys the local laws and does not involve itself in corrupt practices (Knight, 2004) (2) A recent study by the United Kingdom’s Institute of Grocery Distribution determined that the majority of consumers do not buy fair trade products. Few consumers consider the impact of their purchase decisions on anyone or anything but themselves and their family.

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Do you agree with this finding?

Indeed, few consumers consider how their purchase decisions affect the others. This could be attributed to their lack of awareness. Most of them are not aware of how significant the impact of their purchase decisions is, especially on the producers and workers. For instance, only a few consumers are well-informed that the world has a surplus of coffee beans, and this excess supply lessens the income of coffee farmers. The emergence of fair-trade certification organizations has significantly contributed in ensuring that the growers are paid a fair price for their crops.

Charitable institutions, on the other hand, marketed the goods certified by the fair-trade organizations and launched programs to encourage people to patronize fair trade coffee. Through the assistance of these nonprofit organizations, the consumers have become increasingly informed of the weight of their purchase decisions. More and more consumers have become aware of the importance of using their knowledge on the ethical and environmental track record of a company in making purchase decisions could help alleviate the others from a life of poverty or suffering.

(3) What recommendations would you make to help cure the ills of the coffee market? The International Coffee Organization (ICO) recognizes the importance of international cooperation to resolve the problems of the world coffee industry. The organization has recommended political solutions and coffee policies that could improve the world coffee supply and demand balance, benefiting both the coffee consumers and producers: (a) Improving coffee quality This involves establishing target standards for exportable coffee and improving the quality of coffee on the world market in accordance to the interests of both producers and consumers.

(b) Diversification program This includes undertaking specific projects to generate complementary earnings for the coffee growers without eliminating coffee growing itself, such as introducing new crops (c) Sustainability A systematic program could be encouraged to be to preserve the environment where coffee is grown and stored, ensuring the sustainability of the industry from an economic and social, and environmental, viewpoint. (d) Promoting coffee consumption Initiatives to promote coffee in important new markets such as China and Russia, should be sustained.

This could be achieved through coffee festivals supported by leading coffee companies. Currently, coffee consumption is increasing in China by approximately 20% annually. One of the several factors that have influenced this is the generic promotion of ICO. The numerous health benefits of drinking coffee should also be disseminated. The ICO has developed programs such as the Coffee Education Program. The ICO is also planning to conduct these programs in traditional markets and coffee-producing countries. (e) Added value

Ways to add value and market the commodity appropriately should be identified so that producers would be able to share with consumers the benefits of improved quality coffees. References Knight, A. (2004). An ethical supply chain: is it viable? Business Briefing: Global Purchasing & Supply Chain Strategies. Retrieved October 16, 2007 from http://www. touchbriefings. com/pdf/199/ifpm032_p_knight. pdf Ico. org. (2007). International Coffee Organization: channeling international cooperation. Retrieved October 16, 2007 from http://dev. ico. org/documents/benefitse. pdf Add your book here