Quality Management Advantage

Sources for use with Section B
Extract C
UK Government will consider additional 25p charge on disposable coffee cups
The UK Government is considering adding an additional charge of 25p on all disposable
coffee cups. This is aimed at helping the environment. Consumer trends have already
shown people are prepared to pay more in order to prevent billions of tonnes of waste
packaging ending up in the world’s oceans, such as with the success of the existing 5p
charge on plastic bags.
The proposal was announced by the UK Prime Minister as part of the government’s
25-year environmental plan. The focus is on the need to reduce the amount of plastic
thrown away each year.
The UK currently throws away approximately 2.5 billion disposable coffee cups every year
with only a small number being recycled. If government plans go ahead, it is estimated
the 25p charge could raise £438m and reduce use of the throw away cups by 30%.
Starbucks is to trial the additional charge, in London, but with a lower initial charge of
5p per cup. A spokesman for the coffee house chain from the US said its procedures
were focused on reducing environmental concerns at the same time as maintaining the
great taste, quality and service customers expect from Starbucks. Money raised will go to
environmental charities researching better ways to recycle and protect the environment.
Starbucks currently sells reusable cups for £1 and offers a small discount for people using
their own cup. It is the second biggest coffee house chain in the UK (after Costa Coffee)
and the average price of its coffee is around £2.50.

Extract D

Selected financial information from Starbucks’ consolidated income statement
12 months ending 31 October 2017

Analyse two possible reasons why quality management may be important to Starbucks.