10/7/2015

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
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SonyCorporation

Lidl

Sainsburys
Communications
Strategy

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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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