PESTLE Analysis of Caffe Nero's Business Environment

The assignment details a PESTLE analysis of Caffe Nero's business environment, which shows that the company is struggling to adapt to various changes. The report highlights difficulties in adjusting to new trends, resistance to technological change, and challenges in staying up-to-date with customs and trade regulations.

Business Studies

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
PESTLE Analysis of Caffe Nero................................................................................................1
Difference in factors influencing the environment.....................................................................2
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................2

INTRODUCTION
Business environment studies the area in which a company operates including
individuals, external and internal forces that affect their overall performance (Botha, Kourie and
Snyman, 2014). Caffe Nero is a coffee house brand, based in London. It was founded in 1987 by
Gerry Ford and now operating in more than 500 locations. This report will cover analysis and
study of Caffe Nero's business environment and the way each factor influences them.
TASK
PESTLE Analysis of Caffe Nero
PESTLE analysis of Caffe Nero has been done to show the struggles and
underperformance of the company in the past year.
Political Analysis
Caffe Nero sources its raw materials from western countries which have gathered
attention in the political area. It has to follow fair trade practices, sourcing strategies
, tax policies and employment laws and has coped with the various changes that have
occurred.
Economic Analysis
The company's operations get affected by economic variables and cannot be
controlled by them. This includes inflation rates, income expenditure, exchange rates,
labour and operational costs. The changes in economy have caused a decrease in revenue
earned (Gupta, 2013).
Social Analysis
This is a great challenge for Caffe Nero. The basic beliefs, attitudes and values of
people keep changing. The company is facing difficulties in adjusting to latest trends, that
are taking place and this has caused a decline in customers.
Technological Analysis
Technology is very dynamic and has made a huge impact on Caffe Nero. The
management is not willing to get required training and due to their resistance, the
company has faced a downfall in performance.
Legal Analysis

Caffe Nero has faced difficulties in staying up to date with the latest customs,
trade regulations and licensing regulations. This caused a decrease in production and
sales (Caffe Nero PEST Analysis, 2012).
Environment Analysis
The management of has to follow environmental rules and regulations and
address such issues by organising campaigns and inviting their customers to help them achieve
environmental responsibilities (Belás and et.al., 2014).
Difference in factors influencing the environment
Caffe Nero has been adapting to the political environment because there have not been
much changes in tax policies and trade practices. Trading with countries have been going on
smoothly. High rates of exchange has caused a fall in their income and operations from other
countries are not able to earn required revenue.
The company is unable to keep up with changing preferences of people in society. Their
customers have declined and even old ones have stopped visiting their cafe. The change in
systems has created confusion among employees and they take up a lot of time trying to adapt to
it (Banica and et.al., 2017).
Regular change in laws of countries requires making of new contracts and this has taken
up valuable time and money of the company and increase in expenditure and decrease in sales.
The organising of campaigns for environmental awareness has helped Caffe Nero gain reputation
but it is not enough to improve their struggling performance.
CONCLUSION
From this report, it can be concluded that the macro business environment of Caffe Nero
has affected them negatively. PESTLE analysis shows that the company is struggling to adapt to
all new changes in policies, laws, economy, technology and society. It has led to a decrease in
workforce productivity, revenues and profits.

REFERENCES
Books and journals
Banica, L. and et.al., 2017. Internet-of-Things-A Layered Model for Business Environment.
Annals of the University Dunarea de Jos of Galati: Fascicle: XVII, Medicine. (3).
Belás, J. and et.al., 2014. Significant Attributes of the Business Environment in small and
Medium-sized enterprises, Economics & Sociology. 7 (3). 22–39.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology. Elsevier.
Gupta, A., 2013. Environment & PEST analysis: an approach to external business environment.
International Journal of Modern Social Sciences.2(1).pp.34-43.
Online
Caffe Nero PEST Analysis. 2012. [Online]. Available through <https://research-
methodology.net/caffe-nero-pest-analysis/>