Business Organisation in Global Context - Starbucks

Added on - 06 Jun 2020

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Business Organisation inGlobal Context
Table of ContentsIntroduction......................................................................................................................................1Background information of Starbucks.............................................................................................3Background information of Netherlands.........................................................................................6Analysis of the Business Scenario...................................................................................................8Conclusion and Recommendation.................................................................................................10REFERENCES..............................................................................................................................11
IntroductionEvery business organisation performs certain activities so that they can manufacturecertain products which they can sell in the market to earn profit. In order to increase profitrevenue they expand their operation in different country as part of Foreign Direct Investment(FDI). Starbucks is a coffee company and coffee house chain who are willing to expand theirbusiness in Netherlands(Blowfield, 2012). The decision of FDI can be seen as part of theirstrategy on which they are working from a longer period of time. Expanding the business inNetherlands specially in the popular cities like Amsterdam and Rotterdam will help them inachieving new heights.Below mentioned is the Pestle analysis of Starbucks:-Political:-One of the political factor which Starbucks faces is that they have to abide thelaws and regulation in the nations from where they import their raw materials. Starbucks facesthe regulatory pressure in the home market in the United States because of the greaterinvestigation of the business activities that multinationals based in the US are now subject to.Economic:-It has been observed that the customers instead of cutting down on theircoffee consumption are moving to the lower priced options which is an opportunity forStarbucks.1Illustration1: Starbucks Logo
Socio-Cultural:-Although Starbucks can provide cheaper alternatives as briefed above,it has to do so without comprising the quality standards and this is key socio cultural challengethat the organisation faces as they are also including lower and middle class customers in theirconsumer base.Technological:-Starbucks very well know how to crab the opportunities with theongoing technological trends and as part of it they have tied up with Apple to come out with appbased discount coupons(Briassoulis and Van der Straaten, 2013).Legal:-They ensure that they follow all the legislation of the countries from where theysource the raw materials and also take care of the home markets in the US.Environment:-Starbucks have to make sure that they looks at all concern about thebusiness operations from activists, international advocacy groups and from the consumerperspective. Doing so will increase their goodwill in the market.Starbucks- Porter's 5 Forces Model:-Bargaining Buyers PowerSmall Cost per Transaction, Big Similarities in BuyersLow Costs to Switch BrandsAvailability of SubstitutesBargaining Suppliers PowerVarious SuppliersMost of the suppliers wants to tie with them as they are too big to ignoreNegotiates with contracts with its suppliersFair TradeDegree of Rivalry Among CompetitorsSelling the same productsHigh quality foodThreat of SubstitutesNew productsNew placesHome Coffee2
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