Case Study On Porter's Diamond Model

Great Essays
1. Introduction of Starbucks
Starbucks started in 1971 when it used to sell whole bean and ground coffee, tea and spices in Seattle, United States of America. The world famous Starbucks has 28,039 stores across the world as on Dec 31, 2017. It offers varieties of coffee, handcrafted beverages, coffee merchandise, fresh food and consumer products like instant coffee, ready to drink bottled juices etc. (News.starbucks.com, 2018). It is listed on NASDAQ with its share price at $56.71 as on 2nd March, 2018. (MarketWatch, 2018)

2. Research Questions
• Has America being a home country to Starbucks been able to gain international advantage?
• What are the driving forces of 6 elements of Porter’s diamond model in Starbucks?

3. Porter’s Diamond Model of Starbucks
Starbucks’s home nation is United States of America where it started in Seattle. Porter in his diamond model states that factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry,
…show more content…
(Usda.mannlib.cornell.edu, 2010). It can be analyzed that in US, milk is produced in large amounts which means suppliers have increased. More the competition, the firms requiring milk would enjoy lower cost. With many suppliers in US, firms like Starbucks can prompt to take part into innovative ideas. Starbucks introduced coffee with hormone free milk which insisted its suppliers to supply organic milk only. Baxi, Mengnui and Dean Foods are some of its suppliers who had to work on this. (Shares.telegraph.co.uk, 2006) It can be observed that America’s supporting industries competed to provide raw materials to its firm for its innovation in rise of consumer needs. This kind of innovation gets highlighted in the international scenario and gains the competitive advantage in

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