Impact of Macro Environment on Starbucks

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Impact and influence of Macro Environment on Starbucks...................................................3
LO2..................................................................................................................................................6
P2 Internal environment and capabilities of Starbucks...............................................................6
LO3..................................................................................................................................................9
P3 Porter’s Five Forces model for Starbucks..............................................................................9
LO4................................................................................................................................................12
P4 Strategic Management Plan for Starbucks...........................................................................12
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business strategy can be defined as a set of actions that is undertaken to be completed I
order to achieve certain objectives of the business. strategic plans consider different elements
affecting and influencing organisation and achievement of goals and on the basis of which
strategic decisions are taken. This report will involve strategic management plan based on
analysis of macro environment, internal environment and competitive environment for
Starbucks. Starbucks is an American multinational chain of coffeehouse and roaster reserves.
Company was founded in 1971 and is headquartered at Seattle, Washington. Starbucks serves
worldwide and operates at around 30000 locations in more than 70 countries. Products of the
company mainly include Coffee beverages, smoothies, tea, baked goods and sandwiches.
Starbucks is going through the problem that is growth of Starbucks affected and destroyed its
brand value and some other issues like change in brand value and image as well. This report will
involve identification of strategic choices for Starbucks, to deal with challenges and work on
restoring brand image.
LO1
P1 Impact and influence of Macro Environment on Starbucks
Macro factors are those factors that are external and influence operations and decisions of the
company significantly. This environment and elements of the environment can be analysed with
help of PESTLE analysis mode. This model involves 6 factors of environment that are known be
most important for influencing and affecting business decisions and operations (Priporas and
et.al., 2019). Impact and influence of Macro environment on Starbucks is as follows-
PESTLE Analysis
Political
There are several factors included in this factor of macro environment. Elements affecting
Starbucks are political stability in home country that is US, this has direct impact on the
operations of Starbucks. Political relations of US with other countries because Starbucks is a

multinational organisation, in this situation negative relations can affect operations and success
of organisation in other country. Increasing role of politics in developing countries, because of
which operational success can be affected. Regulatory pressure result of politics such as taxation
policy and different employment laws, this is also a part of this environment. These are several
factors in this environmental factor and have significant impact on organisational strategy and
decision making. In most of the situations that are negative for Starbucks and create threat,
Starbucks needs to change its internal operations to cope reduce its effects. For example- good
political relations are an opportunity for Starbucks and it should make strategies to utilise it in
best possible way.
Economical
This factor of the environment is concerned with monetary and financial aspect of an
organisation and how it gets affected by external rules and regulations. Factors involved in this,
are, Exchange rate, difference in currencies of the country, in relation with multinational
organisation, this has significant impact on organisations and their financial performance.
Economic condition of country, this directly links with how an organisation will perform in a
country based on its financial decisions and financial or economic condition of a country. For
example- Starbucks is a premium organisation and success of Starbucks will remain limited in
economically weak country. Taxation and cost of operations in a country and increasing cost of
labour are other elements to affect this factor for Starbucks. Economic conditions when are not
favourable Starbucks needs to ensure it has right strategies to reduce impact on unfavourable
economic situation (Lin and et.al., 2020). For example- when cost of labour increases, it requires
developing strategies to reduce requirements of labour.
Social
This environment consists of ideologies and preference of those who are customers of the
Starbucks. This is one of the most important environmental factors for Starbucks. Influences of
this factor are changing preferences of customers, customers willing to consume food products
that are healthy and natural. Changing lifestyle and changing values and trends is also an
important element in this factor of Starbucks. Growing coffee culture refers to people are getting
more inclined towards coffee and consumption of coffee has increased. Increasing health