Strategic Management in an International Context - Case Study Example

The management strategized the Cooperation’s plans to fit the internal and external business environment, and its internal coherence without facing any challenge or influencing its operation negatively (Schultz & Gordon 2011, p27). Some of the issues surrounding Starbucks Corporation's business environment include competition, clients and suppliers, improvements in technology, market, laws, and government, and social and economic trends. Starbucks' first strategy majored in competition. Outside the American boundary, Starbucks faced various competitive situations in every country it carried out operations.

On many occasions, the competition was even more intense than in America. The withdrawal of Starbucks from Australia was an effect of a highly sophisticated coffee market developed and dominated by Middle Eastern immigrants, Italians, and South Europeans. Throughout continental Europe, Starbucks had to face well-developed markets with excellent standards of coffee preparations and strong preferences. In addition to competition from the bottom, Starbuck faced competition from the top. For instance, the up-market Italian coffee roaster illy cafe was growing and expanding in America through Franchise arrangements with independent coffee houses.

A good justification for the American gourmet coffee market was that immediately after Starbucks had educated North America about the happiness of good coffee, the new coffee connoisseurs moved on to seek superior alternatives to Starbucks. Therefore, Starbucks initiated various strategies to fit or overcome the competition. Starbuck joined single-served coffee pod systems pioneered by the Nespresso subsidiary by launching its single-serve, home coffee makers under its Verismo brand (Schultz & Gordon 2011, p. 221). Starbuck also reduced the prices of coffee, which increased sales.

Therefore, they gained several customers; hence, more retained earnings and benefits. The next strategy of Starbucks is to fit into the social and economic trends. The number of prospective customers was growing both locally and internationally, which led to more demand for coffee.