Introduction:
Before we begin to show our analysis and delve into the depths of the work, which we researched for Starbucks.
We first need to have a clear understanding as to what the purpose of the assignment is, and also what is being asked of us. The title of the group project reads:
“International issues and evaluation of strategic options.”
Therefore we needed to focus particularly on the international issues surrounding Starbucks and also the strategic options, with which it has at its disposal. For us to successfully analyse the Starbucks case, thorough research was carried out in these areas.
A number of sources were offered for us to explore in relation to the case. We chose the following, as we believed they possessed the most relevant information.
The Financial Times, Harvard Business Review, Mc Kinsey Quarterly and we also referred to our core textbook: Exploring Corporate Strategy.
With regards to the international context surrounding Starbucks we looked at different areas, which we believed, were of the most importance e.g. what issues Starbucks faces on an international scale and also what Starbucks can do strategically to change for the benefit of the company.
We looked at the work of one theorist in particular Michael Porter and ways in which his concepts and theories could be applied to this particular case study.
We chose to adopt the infamous Porter’s Diamond as a theoretical framework for our analysis. If this model is applied to a company in the correct manner it allows for them to obtain and sustain competitive advantage over rivals as it provides them with more knowledge as to how they conduct their operations and power the business to future success. The diamond model looks at how a business can reign over rivals within every country which it operates.
There are four points to this model, in brief:
Firm Strategy, Structure and Rivalry: This point concerns the area in which the company operates, as in reality the local conditions affect the success of a firm’s strategy. Many people assume that if a firm is operating in a country with low rivalry it is a good thing however high local rivalry is better as it builds more pressure on a firm to become more innovative and gets them to focus on ways in which they can improve the services which they offer customers. Local rivalry will then in turn force firms to move beyond the basic advantages which the home country may have e.g. low operating costs.
“Heineken- have benefited from early globalisation resulting from the nature of the Dutch home market.”
So in order for a firm to conquer the global market they should conduct market research within the company they wish to operate so they can identify the sources of national advantage.

Factor Conditions: A country creates its own factors. Put simply, it refers to the factors of production within the given country e.g. raw materials, resources and infrastructure. From studying Porter’s work we discovered that he believes “Specialised Factors” are created and not inherited.
This can be seen in terms of the labour force e.g. a labour force may be present, but it is the company who will provide training in order to create a skilled labour force which in turn will lead to competitive advantage over rivals. The stock of factors at the given time is not necessarily a necessity as it is up the company to develop these in such a way that no other firms can duplicate.

Demand Conditions: With this point the demand of customers in the local market, if the market for a particular good or service is larger locally then globally. A firm would focus more so on it then other foreign firms. Therefore this would lead to a more competitive advantage when the firm began supplying the good or service. So it can be said that a more demanding local market will lead to national advantage.

Related and Supporting Industries: When there are local and supporting industries competing, firms will experience a range of more cost effective and also innovative inputs. Supporting industries, facilitate the exchange of information and also promotes a continuous exchange of ideas and innovations up to date.

Also by using the search engines of the various sources as mentioned above it allowed us access to abundant amounts of information regarding Starbucks from academic journals to interviews which we correlated in order to produce the best possible answer for this assignment.

Understand their strategic options:
As we can see from above, Starbucks is now in the position of choosing what they believe to be the best strategic option available, in order for them to remain competitive and dominate the market in which they operate on a global scale.
Having discussed and debated as to what we believed would be the best strategy for Starbucks to adopt we decided to opt for a simple, cost efficient yet extremely effective way in which Starbucks would maximise profits whilst still being able to meet the demands of its customers.
Through the work of Michael Porter we can see how Starbucks can obtain and sustain their competitive advantage over rivals, if senior management would choose to adopt the infamous “Porter’s Diamond” it would provide them with more knowledge as to how they conduct their operations and power the business to future success.
We will now briefly explain this model and also how it could be used to benefit Starbucks.
Firm Strategy, Structure and Rivalry:

Having watched interviews with Howard Schultz we were surprised to hear the CEO of Starbucks saying that