Influence of Macro and Micro Environment on Starbucks

This report evaluates the impact of macro and micro environment on Starbucks and provides a strategic management plan. It includes an analysis of the external factors using PESTEL analysis, the influence of micro environment factors such as customers, competitors, shareholders, suppliers, media, and employees, and the competitiveness of the market using Porter's Five Forces Model. The report concludes with a strategic management plan for Starbucks.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Question 1........................................................................................................................................3
Influence of macro environment on Starbucks............................................................................3
Question 2........................................................................................................................................5
Influence of micro environment on Starbucks.............................................................................5
Question 3........................................................................................................................................6
Porter 5 force...............................................................................................................................6
Question 4........................................................................................................................................7
Strategic management plan..........................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management plan is basically a document which helps in communicating the goals of
the organisation, setting the priorities, focussing energy, configuring the processes, strengthening
the operations and ensuring that the employees and the stakeholders work towards the common
goals. This report will focus on the Starbucks which is the largest chain of coffeehouses and is
headquartered in Washington. It is an American multinational chain of roaster reserves and
coffeehouses (Starbucks Coffee Company, 2019). The report will evaluate the impact of the
internal and external factors along with the competitiveness on the Starbucks. Various theories
and models will be used to do the analysis which will help in making a strategic management
plan for Starbucks.
Question 1
Influence of macro environment on Starbucks
Macro environment: Macro environment are those factors of the organizations which include
the external environment factors which have direct and indirect impact on the organization's
business (Schomaker and Sitter, 2020).
PESTEL Analysis: It is a strategically analytical tool which is used for analysing the impact of
external environment in the organizations
Political: the impact of the political factors referred to the political factors about sourcing the
raw materials for this Starbucks. It gathered a lot of attentions from politicians and it includes the
laws and regulations made by the political effect in the country the organization working in. The
impact of political sector on Starbuck is to follow the laws and regulations in the countries where
the organization is buying raw materials and providing the product and services. Political factors
also include the text policies and employment laws at Starbucks and it is very important for the
organizations to analyse all the political factor.
Economic: Economic sectors refers to the economic conditions of the country and the ongoing
global economic recession is the prime external economic drive for Starbucks. economic factors
are the reason of profitability for the organizations as if the country is having a good economy it
is very beneficial for the organizations to increase their profitability by providing the best quality
and services in the country.
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Some of the other economic factor which are affecting this Starbucks in their profitability and
business are the local currency exchange rates which are going in the country. it also affected by
the local economic environment in the different markets of the country and the taxation level
which are impacting the business in a huge amount (Pan, Chen and Zhan, 2019).
Social: social factors are the factors which show the trend and fashion in the market and it is the
factors which choose what actually buyers are looking for in the market and the services from the
organization. Social cultural factors focus on descending patterns and the change of trends and
preferences of the audience and bias towards the organization. The changing work pattern and
the change in the lifestyle of the population is one of the major factors of social which impact the
business of the Starbucks.
Technological: technological factors are the factors in which the impact of technologies on the
organizations show a huge impact. technology is one of the part of today's generation and it is
very important for the organizations to understand the criticality of the technology and use most
of the technologies to improve the business and increase the profitability of the Starbucks overall
business.
Legal: legal factors of the external environment are to ensure that everything the organization is
doing are with all the laws and regulations and it is very important for the organizations to follow
all the legal factors of the country to work smoothly and perform better in the market. one of the
legal factors include the licensing of the company and it is very important to have the license of
the company to work in the public market and Starbucks follows all the legal advisory so that the
business doesn't get impacted.
Environmental: Environmental factors of the external environment is the last factor of this
external environment which is affecting the business and it is very important for the style works
to make rules and regulations towards environmental factors which are directly and indirectly
affecting the organizations and organizations needs to maintain all the discipline an proper way
of planning still utilized environment and doesn’t harm the environment and providing a support
to the society(Song, Sun and Jin, 2017).
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Question 2
Influence of micro environment on Starbucks
Micro environment: Micro environment refers to the operating environment of the organization.
The effect of micro environment on the organization is direct and immediate as they are more
interlinked with the organizations than external environment or macro environmental factors.
Here are the factors of the Starbucks which are affecting the organizations in micro
environmental factors.
Customer: customers are one of them most important factors of micro environment because the
business is running to provide the customer satisfaction in the market and they are the first
priorities of the organization and Starbucks always focused towards the customer to satisfy all
the customers’ needs and wants. it is very important for the organizations to understand the
criticality of customers and to manage the customer's relation to increase the profitability. Good
Customer is always the strength to the organizations and help in Better Business (Vlados, 2019).
Competitor: competitor is one of the factors by which the decision making of the star bucks can
be affected and organizations needs to understand the competition of the market and take
decisions accordingly. The company should always ensure about their product and services
which they are providing to their customers. they need to ensure that the product they’re offering
is unique in the market and no Compotator is providing such unique product to the audience.
Shareholders: shareholders other my grow environment. They are not merely an investor but
they are having a part of share in the organization and it is one factor which can affect the
decision of the organization in the decision-making process. To keep their investor dividends,
they also have to be paid so the company must find the right balance between the health of the
company and benefit of the shareholders to improve the business in better profitability.
Supplier: Supplier provide Starbucks the material and the factors of the production which is
required to run the business. It is very important for the Starbucks to have good suppliers in the
market so that the production and the raw material doesn’t get stopped and make a good cycling
process which keep on increasing the relations and the working of the business Improved
(Ervural and et.al., 2018).
Media: Organizations needs to promote their business and it is very important for the
organizations to promote their business on the wider context and for that they utilize the social
media platforms. Social media platforms are one of the biggest platforms which can be used and
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utilized to improve the business in the market and make every single customer an audience
aware about the product and services the Starbucks is providing. It is very important for the
organizations to maintain their relations with this media and the status in the market so that the
audience get aware about the organization.
Employee: Employees are one of the most important micro environmental factors which affect
directly to the working of the Starbucks an it is very important for the organizations to have one
of the best employees working for them. it is very important to have the best employees and the
skills and knowledge employ.
Question 3
Porter 5 force
Porters 5 force method is a simple but a powerful tool to understand the competitiveness of the
business environmental and it is very important for the Starbucks to understand the competition
of the market where they are working and how they can make potential profitability in the
market. it is one of the best tools defined the competition market and how the organizations can
improve their business strategies to gain the stability and the profitability in the ongoing market.
There are five factors in forces of porters to explain the competitiveness of the market
1. competitive rivalry
Competive rivalry shows the number of the competition in the market and the strength of your
competition and the competitor in the market of business you are working in. the market rivalry
is high an intense, in such market Starbucks needs to maintain aggressive price cut and different
marketing campaigns to attract more of the customers towards organisations to improve the
business profitability. the competition is high because the trend of coffee and the cafe products
are very high in the market.
2. Supplier power
The supplier power is medium Is the market is very fluctuating and the supplier can’t use the
power to increase the prices and they Maintain the stability of the price of the supply product.
The potential supplier of the Starbucks are medium, the organization is having a unique product
and services which they are offering and for that they're having a medium suppliers which help
them in increasing the prices a little more in the competitive market. It is just because of the
unique product and services switch Starbucks are providing to their customers in the competitive
market.
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3. Buyers power
The buyer’s power is high because every business is run with the help of buyer and every
organization is trying to satisfy the customer’s needs and wants. Buyers power can be controlled
by the unique products and services in the market. it is very essential factors in the competition
market by choosing that the buyer power can affect the business and the organizations needs to
focus on the buyers and make sure that every buyer and the customer is happy from the services
of the organisations due to the competition of market and it is very important for the
organizations to retain their customers for a longer period of time to increase their profitability
(Wellner and Lakotta, 2020).
4. Threat of substitute
Threat of substitute is medium as coffee and the product of Starbucks are one of the trendiest
products and which are most preference by the customers. Starbucks always focus in providing
the product and services which are influencing the market trend and it is very important for the
organizations to increase the product and services by working in the trend and providing the best
product to decrease the threat of substitute in the market.
5. threat of new entry
Threat of new entry is low because to work in the industry on such a huge platform is very hard
and needs a huge amount of money to invest and for without safety that whether the business
will go profitable or not. The third of new entry is low for the Starbucks as Starbucks is working
from a longer period of time and have a good goodwill in the market and customers rely on the
product and services of the Starbucks by the quality and services they are providing to their
customers from a longer period of time (Lewis, 2017).
Question 4
Strategic management plan
Executive summary: - Business strategy refer to the process in which the manager and the
organization make the strategies and process with plans to overcome all the issues company is
facing and it is very important for the company to maintain the strategy to get all the objectives
in the business (Lynch, 2018). It I very essential and the process in which the manager make
strategies to overcome and eliminate the issues and lack points of the organization to gets the
goals and objective done.
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Vision: -
The vision of the Starbucks is providing the best quality and services to the customers and
provide the best customer satisfaction in the market.
Mission: -
The mission of the organization to make the best utilization of the platform and make sure that
providing the customer service and satisfaction to new heights in the industry and market.
Values: -
The values are the working of the business environment and the process with all dignity and fair
working with quality of service and product with minimum wages to reach to every customer.
Pestel analysis: -
Political: - all the political laws and legislation which are made by the political factor affecting
the business are in this factor.
Economic: - economic condition of the organization and the economic situation of the country
affecting the business of Starbucks.
Social: - social factor refer to the trends and preferences which the organization needs to make
sure.
Technological: - Technologies are the innovation and the working of the organization by using
the latest technologies to understand the market better.
Legal: - legal are the laws and legislation of the business in the market with all the legal laws and
regulation of the government.
Environmental; - environment safety and the procedure the company is making to help the
society and environment in protection.
SWOT analysis: -
Strength: - Strength of the organization is the brand value in market.
Weakness: - high competition in market.
Opportunities: - they can expand the business in different countries where they are not yet
working (OSAWA, 2019).
Threat: - threat to the fluctuation of the taste and preferences of the population.
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STP: -
Segmentation: - segmentation refer to the process in which the organization segment the market
according to the different factors which include the behavioural factor, psychological factors etc.
Targeting: - It is the factor of the process of STP in the market where the company focus in
targeting the organization product and services.
Positioning: - position refer to positioning the brand and organization in the market to reach the
maximum number of audiences (Ginter, Duncan and Swayne, 2018).
Monitoring: -
Monitoring is the process which include the monitoring of the work and the process ni which the
organization monitor the working of the company and the process to improve the work. It is very
important for the organization to monitor the overall working of the organization and focus all
the changes and the issues company is facing and take decision accordingly.
CONCLUSION
The above report concluded that the macro and micro factors affect the organisations like
Starbucks greatly. The PESTEL analysis was done in order to evaluate the impact of external
factors. This was followed by internal capabilities, skill set and structure which was presented by
doing the SWOT analysis. Porter’s Five Forces Model was used to examine the competitiveness
in the emerging market for Starbucks and the ways in which it can gain competitive advantage.
Keeping in mind all the implications of the analyses, strategic management plan was made which
will help the company to enhance the productivity, larger customer base and the overall
profitability. Various monitoring and controlling methods were given through which the
efficiency of plan can be monitored to achieve the organisational goals and objectives.
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REFERENCES
Books and Journals
Ervural and et.al., 2018. An ANP and fuzzy TOPSIS-based SWOT analysis for Turkey’s energy
planning. Renewable and Sustainable Energy Reviews, 82, pp.1538-1550.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Lynch, R., 2018. Strategic management. Pearson UK.
OSAWA, T., 2019. Establishing a Strategic Management Plan for Alien Invasive Plants in the
Ogasawara Islands.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of
Management in Engineering, 35(1), p.05018013.
Schomaker, R.M. and Sitter, A., 2020. Die PESTEL-Analyse–Status quo und innovative
Anpassungen. Der Betriebswirt, 61(1), pp.3-21.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy
Reviews, 80, pp.276-289.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Wellner, S. and Lakotta, J., 2020. Porter's Five Forces in the German railway industry. Journal
of Rail Transport Planning & Management, p.100181.
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