Starbusters, Inc. (buyer ) San Francisco Based 17 Outlets in 3 States

You want to buy (green) beans at no more than $1.40/lb final cost to San Francisco (this is your target landed cost however you will be purchasing under an Incoterm other than DDP so your price must equate to a final cost of no more than $1.40)

Looking for delivery of 2,000 lbs/month, minimum of 1,000 lbs/mo.

Approximate Transport/insurance costs: from Mexico $0.04 - $0.07/lb ; from Central America - $0.06 - 0.10/lb; from Vietnam - $0.11 - $0.16/lb; from Kenya - $0.14-0.19/lb

US Import Duties: From Mexico 0% ; Central America 5% of FOB price; From Vietnam and Kenya 10% of FOB price.

This company was founded by Crazy Joe Armbuster in 1994, fresh out of the MBA program at the University of California Berkeley. Crazy Joe gambled that college students and faculty would be willing to patronize an alternative to what he called the Starbucks Takeover of America. He created a franchise system modeled after the Body shop approach part of the corporate culture of his new company was to be a radical left political approach. Starbusters are usually based in run-down storefronts with an absolute minimum of renovation the chairs and tables are rickety and mis- matched, often scavenged from Salvation Army Stores. Each store has racks of political brochures, and books and posters for sale dealing with the environmentalist and anti-globalization movements. In the first five years of operation, the idea was very successful, but lately sales have been slackening and franchisees have become unhappy with low profit margins. One even defected to join the Starbucks organization! There is a small but real risk that Starbusters might go bankrupt in the next year or two. Crazy Joe has decided that in order to stay afloat he has to reduce costs. He has decided that the best way to do this is to import and roast his own coffee, cutting out the key middleman, which is the import- roaster.

Coffee consultants state that as a rule of thumb you must buy green coffee beans at a price no higher than 1/3 the final target cost of the roast, packaged coffee.

Since Crazy Joe wants to remain true to his radical roots, he wants to be able to assure his customers that his house coffee is eco-friendly and non-exploitative of coffee workers/growers. Working with consultants associated with the Specialty Coffee of America Association (SCAA), he has identified three potential foreign suppliers. After conducting sample taste tests at the recent World Fair Coffee trade show last month, he has reached the conclusion that the best-tasting coffee was offered by the Costa Ricans, the 2nd best by the Vietnamese, and the 3rd by the Mexicans.

A. Typewritten one page overall account of the process that transpired and the lessons learned. This statement will be submitted by the team. B. Typewritten one page account from each participant in the team describing the individuals specific role in the group. Both of the above statements are intended to give the reader a flavor of what transpired during the negotiating process. It should detail what went well and what should be improved. It should highlight the class lessons that were applied. Bullet points can be used. Buyers will submit their purchase order together with A and sellers will submit their sales contract with A. If a seller does not obtain on order, their statement A should analyze the possible reasons for this.