The following table gives out the activities and related costs on the value chain of Just Coffee, which is a producer of fair-trade organic coffee. Companies that do not sell fair-trade coffee can buy coffee directly from small farmers for as little as $0.75 per pound. By paying substandard wages, they can also reduce their labor costs of roasting and bagging coffee to $0.70 per pound and reduce their overhead by 20 percent. The average retail price of coffee is $9.99 per pound.

Fill in the BLANK CELLS in the table, and answer the question.

	Just Coffee (fair-trade)	Non-Fair-trade
Purchasing from farmers	2.3	0.75
Import, storage, freight	0.73	0.73
Labor costs of roasting and bagging	0.89	0.7
Label and bag	0.45	0.45
Overhead	3.03
Total cost
Retail Price		9.99
Markup
Profit margin

What would be your recommendations to Just Coffee’s response to the competition from the non-fair-trade coffee producers?

Answer rating: 100% (QA)

SOLUTION As a producer of fairtrade organic coffee Just Coffee faces competition from nonfairtrade coffee producers who can offer lower prices by paying substandard wages to workers and buying coffee ... View the full answer