Teavana Request for Proposal and Final Recommendations

Purpose Teavana Coporation is accepting proposals

for the purchase of inventory to satisfy the fiscal year 2015

Golden Monkey, Monkey Picked Oolong, Golden Dragon, Silver Needle (Teavana Corporation, 2013)

Teavana sets the bar of quality high, “One leaf, One bud” (Starbucks Newsroom, 2014)

The purpose of this is to provide suppliers an opportunity to bid for our sale

Requirements Sample of the product

Description of:

1. Flush

2. Climate

3. Fermentation

4. Bud/leaf variation

Schedule Proposals have already been reviewed and

consulted by Director of Tea Development Naoko Tsunoda

Counter proposals were presented from June-September 2014

Final Decisions must be made by October 31st, 2014

10 10 10 10 10 50

20% 20% 20% 20% 20% 100%

Option Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5 Score

Guizhou Guyunmaojian Tea Co. 6 6 8 2 7 6

Hunan Monkey Tea Co. 8 9 9 9 7 8

Kunming Nanxiang Tea Co. 2 2 9 6 7 5

Decision Matrix

Potential Suppliers The price, quantity, variety and reliability

variations were compared in order to conclude the most qualified candidate

Quantity capabilities are especially important, this supplier must provide an amount in tons to supply all retail locations, online warehouses, and Starbucks locations

Offshore suppliers are required, these teas will need to be from the Yunnan Province China (Yunnan, 2014)

Contract Negotiation - Goods

The seller shall deliver the described goods to the

buyer:

Oolong Tie Guan Yin Tea 100 tons

Yellow Needle Tea 100 tons

New Bai Hao Silver Needle White Tea 100 tons

Golden Monkey Black Tea 100 tons

Contract Negotiation - Price

Oolong Tie Guan Yin Tea100 tons $700,000

Yellow Needle Tea 100 tons $900,000

New Bai Hao Silver Needle100 tons

$1,000,000

Golden Monkey Black Tea 100

tons $700,000

Benefits Hunan Monkey Tea

Co. has great customer reviews

They have provided excellent quality of samples

Their price vs. quality will meet our needs the best compared to other options

They have agreed to all shipment requirements

Risks War

Accident

Environmental Disaster

Industrial Strike

Customs and Compliance Laws

Recommendations Contract outlines any non-performance or force majeure

circumstances

There will be adequate monitoring of weather forecasts to select optimal time frame

Goods are required to be packed in air-tight and light-tight containers in order to preserve quality and freshness of the product

DDU: Delivery Duty Unpaid (Baily, Crocker, Farmer, Jessop, and Jones, 2008)

Rigorous inspections will take place to ensure all provisions in this contract are met

Supplier Relations In the event of

successful business transaction Teavana Corporation is interested in negotiations to renew contract in fiscal year 2016 with Hunan Monkey King Tea Industrial Co. Ltd. With fifteen percent increase in shipment weight

Bibliography

Alibaba Group. (2014). Hunan Monkey King Tea Industrial Co. Ltd. Retrieved from http://hwtea.en.alibaba.com

Baily, P. Crocker, B. Farmer, D. Jessop, J. Jones, D. (2008). Procurement Principles and Management. Tenth Edition. Pearson. England.

Hktdc.com. (2014). Guizhou Duyun Maojian Tea Co. Ltd. Retrieved from http://www.hktdc.com/manufacturers-suppliers/Guizhou-Duyun-Maojian-Tea-Co-Ltd/en/1X085FED/

Kunming Nanxiang Tea Co. Ltd. (2011). Yunnan Black Tea. Retrieved from http://yntea.cn/english/list/69.html

Starbucks Newsroom. (2012, December 31). Starbucks Closes Teavana Acquisition. Retrieved from h ttp://news.starbucks.com/news/starbucks-closes-teavana-acquisition

Starbucks Newsroom. (2014). Renewed Passion for Tea in North American Begins with Teavana. Retrieved from http://news.starbucks.com/2014annualmeeting/americans-passion-for-tea-starts-with-teavana

Teavana.com. (2014). About Teavana. Retrieved from http://www.teavana.com/about-us

Teavana Corporation. (2013). Teavana Employee Handbook.

Yunnan Litongyuan Trading Co., Ltd. (2014). History of Yunnan Tea. Retrieved from http://www.tuochatea.com/history-of-yunnan-tea.aspx