Impact of Macro Environment on Starbucks and Their Tactics

BUSINESS STRATEGY
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1- Impact of macro environment on Starbucks and their tactics............................................3
2- Internal environment and abilities of chosen company by using suitable frameworks.....6
3- Application of Porter’s five forces model..........................................................................9
4- Development of strategic management plan with range of concepts and models.............9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business strategy is one of the most important elements for a company, which they can
use to grow their ventures in strategic and effective manner. It provides several benefits to
organizations in term of gaining more knowledge about firms and competitive advantages. The
current study will be based on Starbucks, which falls under list of leading American international
chains of coffeehouses, established in Seattle, Washington. This assignment will explain macro
environment impact on chosen brand, their strategy and will also define critical analysis of
internal atmosphere and capabilities of firm by using relevant models. Furthermore, this report
will describe implication of porter’s five forces concept, appropriate tactics and methods. It will
clarify application of range of models, theories and concepts included in strategic management
plan.
MAIN BODY
1- Impact of macro environment on Starbucks and their tactics
Pestle analysis-
Political factor-
Trade policy, tax rate and political stabilities are all political factors, which may have a
direct impact on current practices of companies, operated in any industry (Sisson and Bowen,
2017). Tax rate is one of those elements that put negative impact on Starbucks success in term of
increasing tax charges, as organization source their raw materials from different nations or
regions. They need to pay extra charge on each import or export activity that affects profitability
of brand.
Economic factor-
Unemployment rate, education level, recession and local currency exchange rates are
include in list of economic factors. Decreasing rate of unemployment put positive impact on
productivity and practices of firm because it allow management to do not hire more people as
they can work with existing applicants and with few new one, they could not recruit extra
workforce that consume efforts and money as well (Sokol and Jordanov, 2020).
Social factor-
Life style change, preferences, health concern and demographic changes are all social
components that may impact pricing strategy, production and other operations of companies.
Here, preference change is one of those factors that put negative impact on current customer’s
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strategy of Starbucks. In recent time, people like to visit those places where he or she can drink
and eat food with good music, great connectivity with Wi-Fi system and other things. In short
they want value added services which may be impossible to arrange in short term period as it
require depth research and time as well (Bramantyo, 2017).
Figure 1PESTEL Model
(Source: What is PESTLE Analysis, 2020)
Technology factor-
The advancement of technology put positive impact on sales and brand image of
Starbucks because marketing department of this company can use the latest digital marketing
tools and channels to promote business services and products successfully. With social media as
current marketing tool and traditional marketing sources, firm can generate brand awareness and
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