Teavana is seeking proposals to supply various types of tea for fiscal year 2015. They evaluated suppliers based on criteria like quality, price, and reliability. Hunan Monkey Tea Co. scored highest and was selected as the supplier. The contract negotiated with Hunan Monkey Tea Co. specifies delivering 400 tons of 4 tea varieties for a total price of $3.3 million. Teavana recommends contracting with Hunan Monkey Tea Co. due to their customer reviews, sample quality, competitive pricing, and agreement to shipping requirements.

1. Teavana
Request for Proposal and Final Recommendations

2. 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

3. Requirements
 Sample of the product
 Description of:
1. Flush
2. Climate
3. Fermentation
4. Bud/leaf variation

4. 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

5. 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

6. 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)

7. 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

8. Contract Negotiation - Price
Oolong Tie Guan Yin Tea
100 tons $700,000
Yellow Needle Tea
100 tons $900,000
New Bai Hao Silver Needle
100 tons
$1,000,000
 Golden
Monkey Black Tea 100
tons $700,000

9. 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

10. Risks
 War
 Accident
 Environmental Disaster
 Industrial Strike
 Customs and Compliance Laws

11. 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

12. 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

13. 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