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StarbucksPESTELAnalysisResearchMethodology
StarbucksPESTELAnalysis
PostedonFebruary18,2015byJohnDudovskiy
PESTELstandsforpolitical,economic,social,technological,environmentalandlegal
factorsaffectingthebusinessanditiswidelyconsideredtobeoneofthemosteffective
analyticaltoolsusedtoanalysetheimpactsofexternalfactorstothecompany.The
followingtablerepresentsPESTELanalysisconductedforStarbucksCoffeeCompany:
Political
Economic
Industryspecificrulesandregulations
ThelevelofrelationshipsbetweenUSAand
countriesthatproducecoffeebeans
Thelevelofpoliticalstabilitywithinacountry
Buyingpowerofconsumers
Localcurrencyexchangerates
Localeconomicenvironmentwithineachmarket
Starbucksoperates
Taxationlevel
Social
Technological
ChangingfamilypatternsinUSAandEurope
Consumerpreferences
Changingworkpatterns
Changesinlifestylesofpopulation
Thelevelofeducationofpopulationinlocal
markets
Changingvaluesamongpopulation
Emergenceofinnovativetechnology
Biotechnologicaldevelopments
Developmentsinagriculture
Environmental
Legal
Environmentalrulesandregulations
Environmentaldisastersincountriesproducing
coffeebeans
Globalwarmingandotherenvironmentalissues
inagloballevel
Introductionofpoliciesandregulationsbyhealth
authoritiesaboutcaffeineproductionand
consumption
Introductionoftoughercustomsandtrade
regulations
Licensingregulationsrelatedtotheindustry.
PoliticalfactorsimpactingStarbucksCoffeeincludepoliticalstabilityinlocalandglobalmarkets,aswellas,theextent
ofinternationalrelationshipsbetweenStarbuckshomecountryUSandcountriesinAfricancontinentandLatinAmerica
thatharvestcoffeeforthecompany,andothercountrieswhereStarbucksoperatesitsstores.StarbucksCEOHoward
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thatharvestcoffeeforthecompany,andothercountrieswhereStarbucksoperatesitsstores.StarbucksCEOHoward
SchultzisapoliticallyvocalcallingonAmericanstosignaComeTogetherpetitiononlineandatstores(Wong,2013,
online)tovoiceconcernsabouttheUSdebtissue.However,implicationsofSchultzspoliticalactivitiesonStarbucksbrand
imagearedifficulttoassess.
EconomicfactorsthataffectStarbucksinglobalmarketsincludechangesinexchangeratebetweenUSDandlocal
currenciesininternationalmarkets,taxrates,andchangesinpayratesineachindividualmarketwherethecompany
operatesitsstores.Mostnotably,theglobalfinancialandeconomiccrisisof20072009anditseffectsonconsumerbuyer
behaviourhaveresultedinsignificanteconomicchallengesforthecompany.
Socialfactorssuchaschangingvaluesinsociety,shiftsinconsumerlifestyles,anddemographicchangesdohave
implicationsonStarbucksrevenuesoncertainways.Globalisationoflifestylesandspreadofwesterncultureamongst
developingcountriesinAsianandAfricancontinentscanbespecifiedasoneofthemostsignificantsocialfactorsthathas
hadpositiveeffectsonStarbucksgrowthprospects.However,certainsocialfactorssuchasincreasinghealthconcern
amongstpopulationinrelationtocaffeineandsugarconsumption,atendencyfuelledbythemedia(Glasby,2012,p.114)
belongtothelistofkeysocialissuesStarbuckshastodealwith.
TechnologicalfactorsmayimpactStarbucksoperationsthroughinnovationsincoffeepreparationprocesses,aswellas,
agriculturalinnovations.KeyissuesinthisareamayrelatetoStarbuckscompetitorsgainingcompetitiveadvantage
thoroughtechnologicalinnovationsinvariousbusinessprocessesandpatentingtheseinnovationscreatingabarrierfor
Starbuckstosharethebenefits.
EnvironmentalfactorsrepresentanothersourceofsubstantialchallengesforStarbucksCoffee.Thesechallengesare
associatedwithpotentialdamagetobrandimagetobecausedbyactivitiesofawiderangeofenvironmentalgroups
assistedbythemedia.
Legalfactorsareassociatedwithgeneralandindustryspecificrulesandregulationsthatmayaffectprofitabilityand
longtermgrowthofStarbucksCoffee.Moreover,certainpracticesbythecompanymaytriggernegativelegalimplications
forthebusiness.
ArecentscandalintheUK,whereStarbucksCoffeereportedlypaidonlyGBP8.6millionincorporatetax,despite
generatingrevenuesofatleastGBP400millionduetodubiousschemescanbementionedtoillustratethispoint.Negative
legalimplicationsofthisincidentwasnarrowlyavoidedbyStarbucksbypayingadditionalGBP5millioncorporatetaxin
summer2013(TrickerandTricker,2014,p.201).
StarbucksSWOTAnalysis,valuechainanalysisofthecompany,StarbucksMcKinsey7SFramework,andStarbucks
PortersFiveForcesAnalysisavailableinthisportalcanprovideadditionaldepthandscopeforyourresearch.
References
Glasby,J.(2012)UnderstandingHealthandSocialCare2ndedition,ThePolicyPress,p.114
Tricker,B.&Tricker,G.(2014)BusinessEthics:AStakeholder,GovernanceandRiskApproachRoutledgep.201
Wong,V.(2013)StarbucksflexesitspoliticalmusclewithpetitionBloomberg,Availableat:
http://www.businessweek.com/articles/20131011/starbucksflexespoliticalmusclewithpetition
R EL A T ED A R T ICL ES :
SonyCorporation
Lidl
Sainsburys
Communications
Strategy
http://researchmethodology.net/starbuckspestelanalysis/
Accenture:Structure,
Strategy&New
SubsidiaryinChina
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StarbucksPESTELAnalysisResearchMethodology
GuestTekPESTEL
Analysis
Skanska
Marketing
communicationsand
mediacampaign
proposalforHertz
YoungHomeless
GUCCI:assessmentof
opportunitiesinHong
Kongmarket
PESTELAnalysis
StarbucksPortersFive
ForcesAnalysis2014
ImpactofFreeTrade
andTradeControlon
BP
GoogleReport
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