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Strengths	Weaknesses	Opportunities	Threats	Key Issues (3-4)	Recommendations for each issue

Prompts: a. Is the firm vertically integrated such that it gains a competitive advantage in its core business? Are there potential gains if it is currently not vertically integrated?

Starbucks is a global coffeehouse chain that operates in the food and beverage industry. In terms of vertical integration, Starbucks has implemented a vertically integrated supply chain strategy, which involves owning and controlling various aspects of its supply chain, from sourcing coffee beans to retailing coffee products in its stores. This vertical integration allows Starbucks to have more control over its supply chain, ensure quality and consistency, and differentiate its offerings from competitors.

Starbucks has its own coffee roasting plants, distribution centers, and retail stores, which gives it a competitive advantage in terms of controlling the quality and availability of its coffee products. By owning and controlling multiple stages of the supply chain, Starbucks can also capture more of the value generated along the supply chain, potentially resulting in cost savings and higher profitability.

However, there may be potential gains if Starbucks is not currently vertically integrated into certain areas of its business. For example, Starbucks could explore strategic partnerships or collaborations with other companies to access new markets or technologies, reduce costs, or improve efficiency.

Not being vertically integrated into certain aspects of the business may also provide Starbucks with the flexibility and agility to adapt to changing market conditions or consumer preferences.

Starbucks' vertical integration strategy has helped it gain a competitive advantage over its core business of providing coffee products and beverages. However, there may be potential gains for Starbucks to explore different strategies, such as partnerships or collaborations, in areas where it is not currently vertically integrated, depending on the specific circumstances and market dynamics.

b. What is the firms diversification strategy, or what should it be? Does it, or could it contribute to the firms competitive advantage in its core products?

Starbucks has seen its competitors entering the coffee industry, and they have applied great efforts to diversify its menu. Their diversification strategy has involved them adding items such as teas and food items to fulfill the cravings or substitutions of their customers. This can also be utilized to attract new customers along with their current loyal customers. As mentioned in the case Starbucks has its supplier for coffee beans and mentions how Starbucks also made the investment of purchasing Teavana. Teavana is a company that offers different types of drinking teas. This gave them a big advantage as they can now offer premium coffee drinks as well as premium teas from the Teavana brand.

As Starbucks proceeds with the company diversification, the strategy has been a great move. It has brought in new customers, which has helped them increase their company profits. The move that was made gave them the opportunity to have more people try their new items and so far, seems to have been a success for them.

The diversification strategy that Starbucks eventually applied was successful, which gives them an overall competitive advantage over most of their competitors. This will give the firm more opportunities to look forward to finding more options for diversifying its strategies to continue building the company stronger in the industry.

c. Are there potential synergies across businesses? Are they appropriately leveraged?

A shocking 40% of Starbucks locations in the United States are licensed stores, not company-owned and operated stores. Starbucks began to open licensed stores just 20 years after its opening in 1971. Licensed Starbucks kiosks are found in airports, grocery stores, and even on some College campuses all around the world, boosting their sales tremendously throughout the decades. Starbucks has the potential to leverage its customer base more appropriately as they expand licensed locations and implement E-commerce.

The implementation of Starbucks kiosks in grocery stores is beneficial to both businesses in the way that they attract customers to one another with the offerings of their own businesses. The location of the kiosk and the promotional details of its products offered are essential to the growth of the business. If you walk into Target, the first thing you see is always the Starbucks kiosk; this is because they want to capture your attention before you begin to shop. More energetic shopping for a highly caffeinated drink leads to more sales at the retailer as well.

Starbucks has the potential for many other synergies like E-commerce, ordering online and the option of delivery. If Starbucks added this option to their licensed and corporate stores, they would see a lift in sales just as the retailers have after they implemented e-commerce. Though they have had much success with their overall company expansion, diving into this new and highly successful world of online shopping will leave the company with higher profits and more loyal customers.

d. What is your assessment of the firms growth mode (acquisition, JV, internal growth)?

Starbucks has been very successful in terms of growth as they were the world leader in 2015 in specialty coffee retail. Starbucks has transformed from a small coffee shop in Seattle to now being recognized around the world with over 21,000 stores in 60 countries. Their growth strategy is utilized through acquisitions and joint ventures.

Acquisitions are when a company uses its capital resources to purchase another company. Starbucks has acquired many companies that have been very successful and beneficial in expanding their menu offerings and overall growth. They have acquired Teavana, a tea company, La Boulange, a bakery brand where Starbucks marked their entry into the French-style bakery market, Evolution Fresh, a vegetable and juice company, and Ethos Water, a bottled water company. These acquisitions have led to increased market share and profitability and have been useful in creating a competitive advantage over their rivals. When they purchased Teavana in 2012, they were able to enter the tea market and eliminate the high entry barriers by acquiring an established tea company.

Starbucks utilizes joint ventures to expand internationally. For example, Starbucks formed a joint venture with TATA Coffee in the Indian market. These Starbucks outlets in India are named Starbucks: A TATA Alliance and have more than 170 stores across the country. These companies share complementary products which makes it a successful strategic alliance. Both companies are leaders in their industry and this alliance has benefited both companies by sharing the risks and costs and gaining valuable knowledge about the Indian market.

e. What and how can corporate-level decisions enhance a firms competitive advantage?

Corporate-level decisions refer to the strategic choices that a company's top management makes to drive the company's overall direction, including diversification, mergers and acquisitions, strategic alliances, and joint ventures. Corporate-level decisions are critical in enhancing a firm's competitive advantage, as they shape the company's competitive position in the marketplace and its ability to achieve long-term success.

One way that corporate-level decisions can enhance a firm's competitive advantage is by enabling the company to diversify its operations. By expanding into new markets or developing new products or services, companies can reduce their reliance on a single product or market, thereby reducing their exposure to risk. Diversification also allows companies to leverage their core competencies and capabilities in new ways, generating synergies that can enhance their competitive advantage.

A firm can also enhance its competitive advantage by facilitating mergers and acquisitions. Through M&A, companies can acquire new capabilities, technologies, and resources that they may not have been able to develop on their own. M&A can also provide companies with access to new markets, customers, and distribution channels, enabling them to expand their reach and enhance their competitive position.

Strategic alliances and joint ventures are also critical corporate-level decisions that can enhance a firm's competitive advantage. By forming partnerships with other companies, firms can leverage each other's strengths and resources to achieve mutual goals. Strategic alliances can also enable companies to gain access to new technologies or markets that they may not have been able to access on their own.

Such decisions can enhance a firm's competitive advantage by promoting innovation and entrepreneurship. By investing in research and development and encouraging a culture of innovation, companies can develop new products, services, and business models that can disrupt existing markets and create new ones. Corporate-level decisions are critical in enhancing a firm's competitive advantage. By diversifying operations, facilitating mergers and acquisitions, forming strategic alliances and joint ventures, and promoting innovation and entrepreneurship, companies can shape their competitive position in the marketplace and achieve long-term success.

f. Assess the firms current approach to international growth (or what should it be if it is currently not global) and how it balances the dual needs of standardization and localization.

Starbucks success in its internationalization process comes down to its cultural mindfulness and intensive research of the current market. While focusing on adaptation, Starbucks maintains strong brand integrity. Starbucks sets a standard on how the products and its brand image should be perceived by the customers. From this, the ones who wish to become a part of Starbucks must adhere to its regulations and guidelines. This results in all baristas and employees in the US undertaking the same kind of training. Starbucks international strategy and approach to international growth rely on the concept of low integration and high responsiveness. They adopt a multi-domestic strategy, giving them the advantage of using their highly localized products and services guaranteed to match the local product-market fit, gaining a local competitive advantage for deeper market penetration. This also allows them to operate in foreign markets, giving easier access to local market advantages, such as labor, shipping lanes, and natural resources. Balancing the dual needs of standardization and localization, Starbucks products and customer service are customized to suit local tastes and preferences. Starbucks main goal is to spread its coffee culture while adapting to local tastes and preferences. Instead of competing with other global brands, Starbucks establishes itself as a friendly choice among the many coffee shops, and food and beverage options in the US and worldwide. This has established Starbucks brand to the local people and allowed it to enjoy its global success.

g. Assess its mode of expansion (JV, wholly owned etc.)

Starbucks mode of expansion is based upon three strategies for market entry: joint ventures, wholly-owned subsidiaries, and licensing. With joint ventures, Starbucks is able to initiate business in a new market. This allows them the benefit of risk and cost-sharing. For example, in the case of failure, this loss is shared between the two companies, thus making it an easy exit strategy allowing the company to escape a non-core business just in case. With a wholly owned subsidiaries strategy, this is carried out when the company has extensive knowledge of the market, such as in the US or Canada. This also allows Starbucks to have tax benefits and limited liability and promotes diversification. For example, since 2003, Starbucks has had a wholly owned subsidiary Seattles Best Coffee franchises the operation of its cafes and kiosks. The subsidiary has over 540 cafes in the US as well as nearly 100 espresso bars, with retail stores and grocery sub-stores in 20 states and provinces and the District of Columbia (Daszowski). Lastly, the licensing strategy allows the company to quickly expand in a specific country. Through licensing, Starbucks can enter a market that restricts foreign companies. Thus, benefitting from the licensee company's local market knowledge helps them adapt to the market very fast.