logo

Business and Business Environment - Sample Assignment

   

Added on  2021-06-17

11 Pages2016 Words286 Views
Calculus and AnalysisEconomics
 | 
 | 
 | 
Business and BusinessEnvironmentIndividual reportBy: Olja Duseckin Student ID: 20191221419
Business and Business Environment - Sample Assignment_1

PESTLE analysis of StarbucksPESTLE analysis is going to show how 6 important factors affect the business of Starbucks in UAE. It will show the effects of Political, Economic, Social, Technological, Legal and Environmental factors within the country.First Starbucks store in UAE opened in old Dubai Airport in June 2000. Since then they expanded to over 60 locations within UAE.
Business and Business Environment - Sample Assignment_2

Political:Starbucks is affected by political factors in the United Stated which is its home market as well as political factors of the countries where they source the raw materials. -Taxation:Company has to consider the high taxation that is imposed on coffee farmers which can lead to raise of coffee bean price. In June2003. Tanzania’s Minister of Finance has lowered taxation for small holder farmers which positively affected the purchasers of coffee. -Deregulation: In June 2018. USA has withdrawn from International Coffee Agreement for the second time. First time USA left ICA was in 1989. And they rejoined in 2005. International Coffee Organization (ICO) is global intergovernmental organization whose members are producing and exporting coffee countries as well as consuming and importing countries. This had effects on coffee quotas and price control. Some smaller farmers earnings dropped since deregulation andthey had to drop out of coffee farming as they were struggling to make a living. International trade regulations and tariffs will affect Starbucks when importing and exporting goods. Other country’s governments can now impose tariffs which can significantly increase the price when itcomes to large imports.
Business and Business Environment - Sample Assignment_3

Economic:Interest rates:Rising of interest rates results in expansion and investment plans being put off which results in sale fall for Starbucks and its suppliers. Rise of mortgage repayments mean that the consumers have less of disposable income to spend on items like coffee. Exchange rates:When dealing with international trade Starbucks is affected by exchange rates. In today’s market exchange rates are always changing. If coffee supplier country’s currency falls this would enable Starbucks to get more value for their money which could also positively affect theconsumers by lowering the product price. Globalization:Globalization of coffee industry happened in 1970. which has affected coffee producers and sellers. After the globalization some coffee bean farmers’ profits dropped which resulted in some farmers dropping out of the business. Decrease in coffee production can reflect on drop of Starbucks’ supply levels and profits. Economic growth:UAE is expected to be one of fastest growing Gulf economies in the current 2019. year with current estimated 2.6 percent growth. GDP growth of 3 percent is estimated by the next year 2020. This could mean higher domestic credit growth, higher employment level and bigger number of tourists which would definitely increase number of customers in Starbucks and increase of the profit.Competitor pricing: Competitor’s prices can drive down profits and profit margins. This could start a “price war” which is when a company believes that price-cutting will increase market share but it doesn’t have a real cost advantage. Starbucks main competitor in UAE is Costa Coffee.
Business and Business Environment - Sample Assignment_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Strategic Management Starbucks | Report
|18
|5451
|62

Positive Influence of Globalization Towards the Growth of World Business
|6
|1256
|14

The Impact of Globalization on the Business Success pdf
|9
|1894
|181

External Factors Impacting Business Operations: A Case Study of Starbucks
|11
|635
|93

The International Business Assignment
|4
|563
|22

Trends in Terms of Trade | A Perspective of USA and China
|12
|649
|14