Starbucks PESLTE Analysis
Starbucks’ consumers due to the economic recession have not cut down on their coffee consumption. Instead, they are shifting to options with lower prices. This means that the firm can still influence the buying power by offering cheaper products. In this week’s discussion, once you have learnt what a PESLTE analysis is and read the Starbucks study files, provide an answer to these questions:
What are the political factors that Starbucks must consider in its external environment?
is a highly polarized political system with some level of instability and some consider the country to be more politically volatile than any time in recent history. There are many political factors that could influence Starbuck’s operations. For example, U.S. internal trade agreements could affect how Starbucks acquires raw materials such as coffee beans and how much taxes or tariffs that they would pay. Starbuck has developed a well-managed global supply chain that can provide top quality coffee to fifty million customers in fifty-one countries each and every week (Cooke, 2010). Thus any change to the international political trade agreements could force Starbucks to alter their global supply chain.
2. What are the economic factors that Starbucks must consider in its external environment?
Although the U.S. suffered significant economic loss in the global recession of 2008, it has achieved some level of economic recovery. However, many people point to the fact that the economic recovery is not shared by all demographics equally and there is growing inequality in the country.
3. What are the social factors that Starbucks must consider in its external environment?
In regards to the food and beverage industry, there has been a major push in the U.S. to promote healthier products and healthier lifestyles due to high rates of obesity and related health issues. There are also social movements that demand that corporation act more responsibly in regards to social and environmental issues.
4. What are the technological factors that Starbucks must consider in its external environment?
The United States is arguably the most advanced country in terms of technological achievement and is the world leader in many technological breakthrough products. Starbucks must fully utilize the most advanced technologies to stay competitive in this market.
5. What are the legal factors that Starbucks must consider in its external environment?
The United States is one of the most litigious societies and the legal system serves as a major force in American life. There are many rules and regulations that govern business and Starbucks must utilize a full legal department at all times to navigate these requirements. One example of a legal issues that the company has faced was over calling a brew a “holiday blend” in 1997. It turned out that some monks in Seattle had also been using the name “Christmas Blend,” “the monks got mad! And when monks get mad, they go to the press” (Borodkin, 2014). Since this time they have countless legal struggles over intellectual property rights and many more issues.
6. What are the environmental factors that Starbucks must consider in its external environment?
The United States has been the slowest industrialized country in the world to embrace moves towards mitigating environmental issues such as climate change. It recently signed an agreement in Paris to begin to move towards clean energy solutions. Starbucks already has a comprehensive environmental plan that is incorporated in all of its operations. Starbucks states: “Our comprehensive approach to reducing our environmental impact means looking at all aspects of our business, how they intersect and how we can integrate new solutions to create meaningful and sustained change (Starbucks, N.d.).”
Borodkin, L. (2014, February 12). Dumb Starbucks was the perfect crime, but Starbucks was smart to play dumb. Retrieved from The Guardian: http://www.theguardian.com/commentisfree/2014/feb/12/dumb-starbucks-trademark-lawyer
Cooke, J. (2010, September 18). From bean to cup: How Starbucks transformed its supply chain. Retrieved from Supply Chain Quarterly: http://www.supplychainquarterly.com/topics/Procurement/scq201004starbucks/
Starbucks. (N.d.). Environment: Pioneering Sustainable Solutions. Retrieved from Starbucks: http://www.starbucks.com/responsibility/environment
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