Pestle Analysis of Costa Coffee

The report provides an in-depth analysis of Costa Coffee's business environment, focusing on its strengths, weaknesses, opportunities, and threats (SWOT). The SWOT analysis is a crucial tool for identifying potential issues within the internal and external environment that can either create positive or negative impacts on the organization. The report highlights Costa Coffee's focus on quality products and high prices, which demonstrates its position as a private organization. Additionally, it mentions that the company was acquired by Whitbread in 1995. The document references various books and journals related to business and entrepreneurship to support its findings.

Business
And
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different kind of business firm .............................................................................................1
P2 Size, scope, vision and mission of different company...........................................................3
TASK 2............................................................................................................................................5
P3 Relationship among different company function...................................................................5
TASK 3............................................................................................................................................6
P4 Impact of macro environmental factor on organisation operations activities........................6
TASK 4............................................................................................................................................8
P5 Strength and weaknesses of Costa coffee..............................................................................8
P 6 Strength and weaknesses of interrelation with external elements........................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is a can be define as combination of internal as well as external
element of environment like political, economical, staff members, vendor, supplier, management,
legal, technological and many other thus effect organisation performance as well as productivity
in long run. In this report select Costa coffee, it is a British international coffee house
organisation which was wholly owned by Whitbread. It is a world second largest coffee house
as well as largest in United Kingdom. It was established in the year of 1917 by Costa family
(Aterido, Hallward-Driemeier and Pagés, 2011). Around 3401 coffee house has located in 31
nations. In this report cover type of organisation and its size, scope, mission, vision. It also
includes PESTEL analysis and its positive as well as negative impact on firm operation
performance.
TASK 1
P1 Different kind of business firm
There are several different type of organisation has work which have different aim and
objectives for run business unit. Owner of the company has set vision and mission and all
employees as well as management has work together in order to achieve organisation goals.
Three type of enterprise private, public, non profits has work accordingly to their objectives.
Kind of organisation are explain as follows:
Private organisation: Private mean individual or group of person has wholly owned
organisation and work according to their own thinking as well as aim. Government of the nation
can not implemented their rule and regulation in this type of firm only legal policies has affected
private companies. They can not able to borrow fund from public by subscription of shares
(Aula, 2010).
Costa coffee is a private limited company which are run their business activities around
the world. It was founded by Costa family in the year of 1971. in present they have approx 1280
outlets and largest coffee house chain are available in china with 395 store.
Purpose if Costa coffee:
 Offer high quality coffee to their clients.
 The main objective of Costs coffee diversify their product range and its offer to consumer
in order to get higher customer's satisfaction.
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 Maintain rich taste of coffee so that individual person are loyal toward organisation
goods.
Legal structure of private company:
 Partnership: Two and more individual has work together thus help to achieve common
goals in given time frame. Person has enter partnership contract for get diversify
knowledge, skills, abilities, capabilities, of different people through this they are easily
run enterprise in long run (Blanchard, Tolbert and Mencken, 2011). In this, make
partnership deed in which include role, responsibility, liabilities etc. of each one partners.
 Sole proprietorship: Single person are wholly responsible for firm loss as well as profits
so that they are take decision on their own to operate entire enterprise activities
effectively. There are no entry barrier in sole proprietorship and person has enter into
market with out full fill any complex legal process. For example, cafe, restaurant. Limited companies: Limited by liabilities and guarantee, these two type of limited firm
has work with different objectives. Limited by liabilities can be define as owner of the
company can not liable toward public and they are safe for unpaid outstanding. In
guarantee, firm are wholly responsible responsible for dues of payment as well as loss of
clients.
Public organisation: Government of the nation has work for providing necessary
requirement like education, hospital, electricity etc. to public through this they reduce
domination of private organisation at market place. NHS has work in healthcare sector in order
to reduce human health issues effectively (Fernando, 2011). They are offer medical facilities like
dental care, optical care and many other.
Purpose of NHS:
 Organisation develop quality of healthcare services time to time basis in which they
treated their clients with dignity as well as respect. Management of NHS has develop strategies and plan in order to enhance quality of
delivery of services as well as its operational work.
Legal structure of public company: Central government: Central government open hospital, transportation like airlines etc.
in order to rise quality life of all citizen with in a nation.
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 State government: Education, transportation like bus etc. has run by state authority of the
country to provide necessary facilities to persons. Local government: They are work for local area development as well as social
development.
Voluntary organisation: It can be define as companies those are run their business
activities with the aim of public welfare as well as social development of individual and group of
persons. In united kingdom it is a firm liabilities to share their profits for nation development
with form of corporate social responsibility (Hamilton and Webster, 2015). It is compulsory for
each one firm to spend money into nation development. Oxfam is a non profits organisation
those are work for removing poverty from the world. For this they are implemented strategies
like advocacy, disaster, pro-migration and many more.
Purpose of Oxfam:
 Enhance living standard of of poor person by providing education, hospital facilities and
many more.
 The main objectives of Oxfam is a reduce poverty from the nation and rise human life
quality.
P2 Size, scope, vision and mission of different company
Each one organisation has different size, scope, vision, mission accordingly they are
work to achieve target in limited period of time effectively. Costa coffee is a one of the largest
coffee house chain in the whole world so that their scope, size, vision etc. has different from
another company like NHS because they are work in healthcare sector (Harrison, 2011). Here are
explain several kind of companies and its size, scope, vision, mission in detail as follows:
Private organisation: Firm those are operated their business into private sector has
highly contribute into development of nation economy. They are increase employment
opportunities regionally, nationally and globally. Size of these type organisation are:
 Maximum number of workers: 50
 Minimum number of workers: 2
Here are detail explanation of two private enterprise with their size, scope, mission, vision:
 Costa coffee has 3401 store in the whole world and 1280 outlets overseas. Company has
lots of scope in expending business area by opening new outlets in different location
(Welford, 2013). Vision of Costs coffee is offer high quality coffee to their clients by
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implemented strategies of best of the best in each one cap of coffee. The mission of costa
coffee is save human being from mediocre coffee and protect their health as well. Bentley was established in the year of 1919 and approx 3600 worker are working here to
sell cars into international level. They are manufacturing luxury cars for this clients those
are brand sensitive in their nature. So that, wide scope of available for Bentley to sell
SUV and luxury cars in the market. Vision of the company is provide high quality cars aa
compare to their competitors in the same industry.
Public sector: Government has develop public organisation and they take decision in
favour of public without thinking about profitability (Siewiorek and et. al., 2012). Here are
explain two public sector firm with their size, scope, vision and mission are detail below:
 NHS is a one of the largest organisation according to their workforces, around 1.5
million workers are work in NHS in which approx 150273 has doctors, 314966 has
nurses and many other. They are provide several kind of healthcare services to their
clients and offer free of cost medical facilities to poor person those are not able to get
treatment. Vision of NHS is all people in the world has live their life healthier and
mission is enhance quality of services so that customers are higher satisfaction with
organisation. Another public sector organisation is Sainsbury. It was established in the year 1869 and
approx 181900 employees are working here. Their store are located in 1400 places. The
vision of Sainsbury's is provide quality of grocery product at lower cost to their clients
and mission is expend their business at global level to get high presence at market place.
Voluntarily sector: Non profits organisation has work for welfare so that they can not
focus on profits. Here are explain two voluntarily firm with their vision, mission, size and scope
are as follows:
 Oxfam is a work for public welfare they have more then 20 charitable trust those are
support organisation in their working at different location (Robbins, Judge and
Campbell, 2010). Scope of Oxfam is very large because CSR funding is legal so that
they are get money time to time with different companies for social development.
Vision of the company is remove poverty from the whole world and mission is
expending their working location so that offer services to poor person those needed it.
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 British heart foundation: It is a non profit organisation that was established in the year
of 1961. firm has work for heart issues and approx 50 trust has work under British heart
foundation. In united Kingdom number of hear patient is very high and continuously
increase so that firm has wider scope to expand work effectively. Vision is reduce heart
problem from the whole world and mission is expanding business in different nation so
that provide services to large number of person.
TASK 2
P3 Relationship among different company function
With in the company several department has work together in order to achieve common
vision, mission effectively. Some division like finance, marketing, operations, production,
research and development etc. all are interdependent on each one, no one single department has
achieve target effectively (Moutinho, 2011). Costa coffee has open their coffeehouse in different
location and here various department has worked thus explain as follows:
Human resources: HR manager of Costa coffee has play very important role with in a
work like hiring, selection, appraisal, training and many more through this firm are able to
achieve goals in limited time period effectively. They are organising training program for their
staff member in those are working in different nation. According to consumer taste, preferences,
attitude etc. they are trained employees so that they are delivery service accordingly.
Operations: Management of Costa coffee has manage all floor staff so that provide high
class quality of services. Some important work of operational division are inventory
management, inflows and outflows, maintenance, outlet environment and many more (Klapper,
Lewin and Delgado, 2011). Through this, firm attract large number of individual toward their
goods and services effectively.
Marketing department: Marketing management has conducting market research to
identify client references, taste, perception, motivation factor and many more accordingly
develop produce to get higher customer's satisfaction in long run. They also promote goods but
Costa coffee is can not advertise their coffee through traditional mode of advertisement because
their buyer segment has different from others.
Finance: Fund manager has distributed money by prepare budget and each one division
are work accordingly. They identify organisation financial position at market place and get loan
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from different segment according to requirement. Costa coffee objectives is expending business
with high quality of product, for this they needed money and fund management arrange it
effectively.
TASK 3
P4 Impact of macro environmental factor on organisation operations activities
Macro environmental element has create positive as well as negative impact on firm
operational activities so that it is a management responsibility to identify negative point which
affected organisation performance at market place (Iskanius, Page and Anbuudayasankar, 2010).
Costa coffee is a founded in the year of 1971 by two Italian brothers Bruno and Sergio Costa.
PESTEL analysis if Costa coffee are detail as follows:
Political: In the year of 2017, United kingdom has focus crises due to political action of
separated from EU, resulted overall international trade are affected negatively. Some political
trends are cry for democracy as well as reform; rise local and popular assertiveness; greater
public accountability and many more. Positive: After Brixit, employment opportunities for local person are rise so that Costa
coffee hire candidate those have ability to serve high quality services in front of clients
resulted achieve target effectively. Negative: Reduction in free trade area decrease profitability of Costa coffee and firm are
not able to work on global level with less entry barrier.
Economical: After Brixit, economic condition of United Kingdom has poor but with time
it re-boost and get growth. Some important economical factor are interest rate, inflations, foreign
exchange charges, disposable income capabilities and many more. Positive: High education level and lower interest rate help Costa coffee to run their
business activities effectively (Harrison, 2011). Negative: Low disposable income highly affected Costa coffee because they are offer
high cost product with rich taste so that individual person are not able to buy coffee
resulted overall profits of the company reduce.
Social culture: Costa coffee has sell their product in approx 31 nations so that they are
able to attract large number of clients toward their goods and services. Some social cultural
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elements are buyer perception, preferences, attitude, motivation, taste, thinking, opinion and
many more. Positive: Improvement in person lifestyle create opportunity for Costa coffee to sell their
product easily at market place. Buyer has focus on taste as well as quality of goods so
that they feel attraction toward big brand like Costa coffee. Negative: Tea culture in different nation has reduce attractiveness of coffee so that it
create negative impact on organisation performance in long run (Hamilton and Webster,
2015).
Technological: Continuous development of technology has make coffee machine better
so that quality of product may rise. Through this, they are offer same taste in their product in
different location thus help to encourage millions of people with in a year and achieve goals in
limited period of time. Positive: Latest technology has reduce human efforts in making quality of coffee with
uniformity resulted customer has get same taste in different outlet and feel satisfaction. Negative: Technology has change very fast so that it is not possible for Costa coffee to
implemented each on engineering science at work place thus affected organisation
performance negatively.
Legal: Government of United Kingdom has develop rule and policies for organisation. It
is a obligation of Costa coffee are implemented these all regulation at their work place in which
cover equal opportunities act, discrimination, minimum wages law etc. Taxation as well as
labour law in coffee beans origin area has create impact on Costa coffee development. Positive: Less tax on coffee at UK help Costa coffee to purchase higher quality beans at
lower price resulted overall profitability should be rise. Negative: Complex labour law regulation has create difficulties for Costa coffee to run
business effectively (Fernando, 2011).
Environmental: In present scenario, social awareness about environment has rise so that
they are request to whole coffee manufacturing chain save trees and develop plant more and
more that possible. Positive: Costa coffee has contribute in development of coffee plant every so that it create
positive brand image of the company in customer's mind.
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 Negative: Many social group as well as NGO has rise their voice for save trees resulted
some time they develop negative image of the company at market place.
TASK 4
P5 Strength and weaknesses of Costa coffee
Costa coffee is big brand in the world so that client get higher quality product and
achieve satisfaction. It is management responsibilities to develop strategies in order to attract
new customers toward their goods and services resulted achieve goals in limited time period
effectively. SWOT analysis of Costa coffee are explain as follows:
Strength:
 Costa coffee is a world second largest coffee house chain which are run their business
approx 31 nations.
 World wide operations of Costa coffee has 3401 outlet overall, 1280 overseas and 6000
Costa coffee express vending (Blanchard, Tolbert and Mencken, 2011).
 Rich taste of coffee has build positive brand image in eye of consumers. Premium image of develop high brand value as compare to other at market place.
Weaknesses:
 There are big gap between first position Starbucks 5000 outlets and Costa coffee 3401 in
the whole world.
 Starbucks has run their business activities in 70 nation which are higher then Costa coffee
31 country.
 Lack of advertisement and marketing task affected operations process of the company in
long run. Higher price of coffee and product reduce market segmentation.
Opportunities:
 Expansion of the company in another nation.
 Costa express can boom. Corporate house has install costa coffee machine in their work
place thus increase revenue of the company
 Through strategic alliance Costa coffee sell their product with help of restaurants (Aula,
2010). Management has used pull strategies to attract large number of clients toward firm.
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Threat:
 Biggest competitor Starbucks create high competition.
 Dropping brand value by lack of marking and consistency.
P 6 Strength and weaknesses of interrelation with external elements
Both PESTEL and SWOT analysis has interrelated to each other so that management has
reduce negative impact of macro environmental factor on organisation resulted automatically
reduce weaknesses. For example, Starbucks has biggest coffee chain organisation in the whole
world it it create higher competition for Costa coffee resulted overall profitability has been
decrease. Internal as well as external factor may create negative impact on company and both are
interrelated to each other and develop strength of the firm (Aterido, Hallward-Driemeier and
Pagés, 2011). For example, uncertainty in government party has create threat for an organisation
how they develop strategies to get long run sustainability at market place.
There are some objectives as well as goals of PESTEL through which easily analysis
SWOT of Costa coffee that are explain as follows:
 Identify issues from internal as well as external business environment thus shows threat
for an organisation.
 Allocation of available resources in order to assembling creative things.
 Measuring as well as evaluating all future requirement and rates effectively.
 Appropriate method of supporting threat.
All these points has shows Pestle as well as strength, weaknesses, opportunities, threats
are interrelated to each other and firm are focus on PESTEL in order to develop their brand value
at market place.
CONCLUSION
From the above report it is concluded that internal as well as external environmental
element has create positive, negative impact on organisation. Management of Costa coffee has
focus on quality of produce and offer coffee at high price as compare to market cost that shows it
is private organisation. They are sell roasted coffee in wholesale to speciality Italian coffee house
as well as caterers. In the year of 1995 firm was acquired by Whitbread organisation.
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REFERENCES
Books and Journals
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy &
Leadership. 38(6). pp.43-49.
Blanchard, T. C., Tolbert, C. and Mencken, C., 2011. The health and wealth of US counties: how
the small business environment impacts alternative measures of development.
Cambridge Journal of Regions, Economy and Society. 5(1) pp.149-162.
Fernando, A. C., 2011. Business environment. Pearson Education India.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Harrison, R., 2011. Learning and development. Development and Learning in Organizations: An
International Journal. 26(1).
Iskanius, P., Page, T. and Anbuudayasankar, S. P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product industry.
International Journal of Electronic Customer Relationship Management. 4(4). pp.395-
414.
Klapper, L., Lewin, A. and Delgado, J. M. Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Robbins, S. P., Judge, T. and Campbell, T.T., 2010. Organizational behaviour. Financial Times
Prentice Hall.
Siewiorek, A., and et. al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
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