SWOT and PESTEL Analysis of Starbucks

This document provides a comprehensive analysis of Starbucks, including its SWOT and PESTEL analysis. It also discusses the impact of CSR on the business and the importance of organizational culture. Suitable leadership styles and recommendations for Starbucks' growth are also provided.

Context of Business

INTRODUCTION
Organisations execute their functions in business atmosphere that includes diverse kinds of
components which have significant influence over its functioning. In it, company is needed to
earn formative acknowledgement of all the overcoming components as to assure strategic
benefit. This document is supported to Starbucks that is an American largest coffee chain (Torres
and Sidorova, 2019). This venture was established in 1971 and is headquartered in Seattle,
Washington. The organisation operate its business in Coffee sector cross wise the world with the
help of its range of coffee shop. In this document formative discussion has been made on SWOT
and PESTEL analysis of Starbucks. Moreover, it will explain about the popularity of CSR impact
of business, different styles of leadership and the importance of organisational culture on the
processes at Starbucks.
MAIN BODY
1. Perform a SWOT and PESTEL analysis for Starbucks
SWOT analysis
It is a strategic structure that permits a venture to efficiently find out their capability,
weakness, opportunities and threats. This will further allow enterprise to improve appropriate
measure as to get over weaknesses and earn significant benefits from growth options. The
description of SWOT examination of Starbucks is as under:
Strengths- The major capability of Starbucks is its immense fiscal execution that has
consequence in the firm engaging the amount one pustule between coffee and beverage vendors
in the globe. The establishment is the largest coffee chain in the globe and due to its dimension
and high quantity; it can give to cost its commodities in the quality and middle tier range to get
attention of range of target audiences.
Weaknesses- One of the main weakness of Starbucks is its high pricing strategy which
minimise the affordability for the customer. The firm also does not have its own unique products
in the market which makes the limitability of commodities quite easy for other ventures
(Rissanen and et. al., 2020). The organization is greatly based on its major and main contribution
that is the coffee bean and therefore, is intensely reliant on the cost of coffee beans because a
determinant of its profit margins.
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Opportunities- In Starbucks, the administration of the firm can make development in its
business by expanding its business in developing nations like China, India and few reasons of
Africa. Along with by making innovation in its products like holiday flavours such as
Peppermint Mocha, Eggnog Latte and many more.
Threats- There is several kind of threats faced by business of Starbucks, one of the main
threat is competition. There are several enterprises which operate their business in similar sector
and also offer similar products which create high level of rivalry that negatively affect respective
firm (Song and et. al., 2019). Due to COVID19 pandemic and Brexit changes are arisen in laws
which also generate issue for Starbucks business.
PESTEL analysis for Starbucks
Political- The major political component is about supplying the raw materials. It has
collected a lot of the concentration from politicians in the West and from the basis nations. For
this cause, Starbucks wants to stick to communal and ecological norms. It is readying to follow
the sourcing plan of actions. It offers significance to fair deal performance. Along with this due
to Brexit and COVID pandemic changes are occurred in government rules which also affect the
business of respective firm.
Economical- The constant financial depression is the main exterior financial driver for
Starbucks. Along with this, due to Brexit, inflation is arisen and suppliers make increment in the
prices of raw material which unfavourably influence the economic condition of organisation.
Cause of corona virus crisis, the labour is ready to work with less pay which creates positive
effect over the business of firm.
Social- Starbucks can provide cheaper commodities but it might have to let go the
excellence. This is the major socio-cultural confront that the start-up suffers. Changing consumer
taste & preference also influence the trades of coffee and the commerce of Starbucks. Apart from
this, the fame of coffee is not even crosswise all the communities. There are diverse things
considering advertising whose efficiency based on the humanity and civilization (Myšková and
Kuběnka, 2019). The establishment would require concentrating upon the millennial production
and its predilections. It’s correct that the firm commodities retail at best prices but its experience
and excellence and diversity are also unparalleled.
Technological- Starbucks is in an excellent place to take pleasure in advantages of the
appearing mobile gesture. The firm commenced Wi-Fi abilities in its outlets previously. Internet
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is significant to the consumers. They can now wave the web and perform vocation whereas
drinking Starbucks Coffee. Thus is an extra worth to the brand. It improves the general consumer
knowledge. It also offers enabling mobile payments. In the current years, it maximised its
savings in advertising and whether conventional techniques or digital promotion, it is devote
millions to develop its brand attendance.
Environmental- numerous Starbucks commerce activities unease futuristic and global
promotion teams. Even the customers have spoken complexities. So, the firm should obtain these
into description to constant sharing customer’s belief (Holloway and Humphreys, 2019). It is
also functioning to contract its ecological footprint by maximising reprocessing and by and
minimising the dissipate associated to cups and other kinds of covering. It concentration is also
on water and energy preservation. Along with this, it also assisting farmers mitigates the
influence of weather transform on cultivation. It has spended efficiently in ecological
accountability and communal dependability.
Legal- It refers to the laws and legislations that are formulated and developed by the
countrywide establishment of diverse countries for the effective running of business enterprises.
Due to Brexit and COVID pandemic there are several kind of changes are formed by government
in their laws, like Taxation policies, hygiene act, environmental act, employment law and many
more. This kind of change influence Starbucks in diverse form constructive and unenthusiastic
method.
2. Evaluate how the popularity of CSR has influenced the business. Critically comment on how
the firm is addressing their CSR goals.
Corporate communal accountability indicates to commerce plans that are able to provide
benefits to community. These proposals fall in to three groups, often described the triple base
line, that are communal, atmosphere and financial. CSR is the conception that a business requires
to be concerned with more than just profit. Protecting the environment is one of the main and
prime aspects of social responsibility because each company establish in a community. So for
effective running of business operations and activities, it is crucial for organisations that they
should consider effective social measure for the welfare and well being of community (Sivarajah
and et. al., 2020). A business like Starbucks social accountability also is communicated y its
ethical standards that how it treats its diverse stakeholders consisting vendors, manpower and
consumers. The popularity of CSR has influenced the business in diverse form like when it
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combined with business strategy and considered in daily operation activities, CSR is the core of
business sustainability.
Now, it is being executed crosswise the provide chain and with this comes the
understanding that several of these supply chains are international in environment. CSR also
create positive impact on consumer satisfaction by retaining them till long term. Now this
customer also become eco-friendly so by making its production environmental friendly the
administration of Starbucks can retain its customer base. Similarly, the business that
demonstrates an obligation to the society and the environment can get attention target audiences
who share these values (Bell, Bryman and Harley, 2018). In Starbucks, the management of the
company, to address its goals, highly focus on eco-friendly manufacturing activities and consider
environmental law so that they can reduce and remove unfavourable impact over atmosphere.
Along with they also use disposable cups and packaging material in their coffee product so that it
can easily biodegrade without harming environment and society.
3. Compare and contrast the different styles of leadership. Recommend a suitable leadership
style that will help Starbuck grow.
Leadership style is a form that is utilised by the organisations to offer direction,
implementing strategies and encouraging individual. In Starbucks, the administration of
respective firm can used leadership style to provide guidance to manpower for doing their task in
effective form so that they can attain their aims and objectives in easier manner in set time frame.
There is several kind of leadership’s style like democratic, autocratic and strategic etc. This
leadership style can be beneficial for respective enterprise as it operate globally so it require to
frame plans and plan of action in term of fulfilling needs and demands of target audiences
(Rachinger and et. al., 2019). The comparison of some leadership style is as below:
Basis Autocratic Democratic Strategic
Meaning It is a leadership form
in which leader orders
and provides policies
and procedures as
well as they have
information about the
aim and objective that
It is also known as
participative
leadership style within
it, people basically be
determine unequally
as the hierarchy
benchmarks have
It indicates to the
latent and
effectiveness of leader
to explain a strategic
vision for the
organisation and
motivate workers and
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are to be
accomplished. With
the assistance of this
leadership style the
leader provide
instructions and
telling to individual
that what to do rather
asking them for their
suggestions. The
leader is the only
person who is
accountable to take
decision. This form of
leadership can be
considered and
followed by firm in
few situations when
they are performing
on a particular or
crucial case and they
need to make
determination.
ordinary authority in
determination
devising (Corallo,
Lazoi and Lezzi,
2020). Under this
leadership form, the
decisions are
supported to the input
of each group
member. It is one of
the effective styles of
leadership as it
permits lower extent
of manpower to
exercise power so that
they can also share
their views and
thoughts for
development of the
establishment. By
considering this form,
the administration can
encourage its
workforce by offering
the chance of making
participation in the
assessment building
procedure so that they
can also feel
motivated and
executing the task
others to attain the
goals and objectives.
This leadership form
refers to capability of
someone to
encouraging them to
make determination
that maximise the
viewpoints for the
venture’s long time
development when
they are manage shirt
term fiscal stability.
This form is followed
the administration
function of
establishment to
design policies and
plan of action for
effective business
operations. Strategic
thinking also play a
crucial role in this
dynamic business
environment of
organisations
(Rinkinen and
Harmaakorpi, 2018).
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with more efficiency.
With the help of it,
they can also share
their complexities
with their superior
and make an efficient
communication with
them.
Aim It directs to quick
decision making,
control over the
processes and the
operations of
enterprise
(Kucharčíková,
Mičiak and Hitka,
2018).
The aim of this
leadership form is to
empower employees
to have strong hand in
administrating
business firms.
The major purpose of
this style of leadership
is to rationalize
procedures, improve
planned efficiency,
promote innovation
and build an
atmosphere that
motivates workers to
be industrious,
autonomous and push
presumptuous their
own thoughts.
From the above defined information it can be recommended to Starbucks that democratic
leadership style is beneficial for firm as it will assist in encouraging manpower of firm by
offering opportunity of participating in decision making. With the help of it they can discuss
their views with top management and share their problems and get effective solution on time. It
will motivate them and they perform their task with their all efforts and effectiveness as well as
make their contribution in the growth and development of respective firm (Sheng and Lan,
2019). When employees will perform their task in well defined form, then the business
objectives and aims of company will attain in appropriate manner.
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4. The importance of organisational culture on the process at Starbucks using evidence from your
research
Organisational civilization is a method of collective postulations, standards and attitude
that oversees how person perform in the business enterprises. These collective standards have an
immense collision on the individual in the company and order how they clothes, act and perform
their occupation duties and responsibilities. In Starbucks, the main role of organisational culture
is to shapes the way workers interact at their working environment (Torres and Sidorova, 2019).
A healthy culture motivates the manpower to stay encouraged and faithful regarding the
administration. Along with it, the work culture promotes healthy relationship between the
workers. It also goes a long way in publishing healthy rivalry in working environment.
From the research information it can determined that in Starbucks, the culture of the firm
determine the form by which workers interact in place of work. The culture is also crucial for
respective firm as with the help of it, the venture can set procedure for the manpower to exertion
consequently. The civilizations also symbolize sure predefined policies that lead the workers and
provide them a intelligence of courses at place of work. Along with this, workers also clear about
their roles and accountabilities in the establishment and aware how to achieve the tasks forward
of the deadlines. A healthy culture of company can also brings all the workers on an ordinary
platform and they are treated equally which is important for workers to adjust well in the firm
culture for them to transports their intensity best (Song and et. al., 2019). By considering an
effective company culture, Starbucks can make development in its business in term of profit and
productivity as good organisational culture help in making effective employee relation and when
enterprise has good relation with it workforce then they use their all efforts and effectiveness for
the growth and development of organisation.
5. Write a reflection report on your experience in writing this report
If it is talked about experience while writing this report has been in that there is diverse kind
of factors that has been suffered by me. At the initial phase of this project, divers kind of
information and data has been gathered by me in reference to appropriately find out capability,
weaknesses, risks and growth options. In addition to it, there are several kinds of factors of
PESTEL analysis that are being accordingly measured by me like political, economical, social,
technological, environmental and legal etc. In order to organise this report in an effective
manner, I take utilisation of diverse journals, articles, websites and many more in respect to
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gather appropriate information and data about mentioned activities in the document. in addition
to it, diverse kind of information has been evaluated by me in respect to earn and gain effective
knowledge about business operations and activities of establishment. Certain amount of issues
has been suffered by me during writing this report. As to gather crucial and relevant information,
I invest my lot of time. It has been find out that most essential experience that has been earned by
me through writing this document is to efficiently organise strategic determination such as
SWOT and PESTEL. As it will provide me advantages me also in future aspects. Along with this
effective knowledge associated to organisation has been earned by me that will further assist me
to gain significant development growth options in professional form.
CONCLUSION
It has been determined form the above defined information that a company execute their
facility in a business atmosphere in which there are diverse kinds of components that influence
their functioning in unfavourable and favourable form. Therefore, it make crucial for
establishment to find out aspects and take benefits of strategic options in respect to get over their
negative impact upon operations of enterprise. In this, by considering benefit of SWOT and
PESTEL analysis organisation can earn determining insight about the components that influence
their practices. With the assist of this firm can also frame strategic plans that further assist them
to organise their functioning in a well defined form. Different leadership style also effective to
lead and direct the employees and make effective contribution in organisational growth. It
considerably advantageous entity to capability and efficiency in best efficient form while further
ensuring log term sustainability in respective individual industry.
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REFERENCES
Books & Journals
Torres, R. and Sidorova, A., 2019. Reconceptualizing information quality as effective use in the
context of business intelligence and analytics. International Journal of Information
Management, 49, pp.316-329.
Rissanen, T. and et. al., 2020. The role of home market context in business model change in
internationalizing SMEs. European Business Review.
Song, R. and et. al., 2019, June. Towards a comprehensive understanding of the context concepts
in context-aware business processes. In Proceedings of the 11th International
Conference on Subject-Oriented Business Process Management (pp. 1-10).
Myšková, R. and Kuběnka, M., 2019. Information sharing in the context of business
cooperation–as a source of competitive advantage. Journal of International
Studies, 12(3).
Holloway, J.C. and Humphreys, C., 2019. The business of tourism. SAGE Publications Limited.
Sivarajah, U. and et. al., 2020. Role of big data and social media analytics for business to
business sustainability: A participatory web context. Industrial Marketing
Management, 86, pp.163-179.
Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.
Rachinger, M. and et. al., 2019. Digitalization and its influence on business model
innovation. Journal of Manufacturing Technology Management.
Corallo, A., Lazoi, M. and Lezzi, M., 2020. Cybersecurity in the context of industry 4.0: A
structured classification of critical assets and business impacts. Computers in
Industry, 114, p.103165.
Rinkinen, S. and Harmaakorpi, V., 2018. The business ecosystem concept in innovation policy
context: Building a conceptual framework. Innovation: the European journal of social
science research, 31(3), pp.333-349.
Kucharčíková, A., Mičiak, M. and Hitka, M., 2018. Evaluating the effectiveness of investment in
human capital in e-business enterprise in the context of
sustainability. Sustainability, 10(9), p.3211.
Sheng, J. and Lan, H., 2019. Business failure and mass media: An analysis of media exposure in
the context of delisting event. Journal of Business Research, 97, pp.316-323.
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Online
PESTLE Analysis of Starbucks. 2020. [Online]. Available Through: <
https://pestleanalysis.com/pestle-analysis-of-starbucks/>.
SWOT analysis of Starbucks. 2020. [Online]. Available Through: <
https://bstrategyhub.com/swot-analysis-of-starbucks-starbucks-swot/>.
What is Organizational Culture?. 2020. [Online]. Available Through: <
https://study.com/academy/lesson/what-is-organizational-culture-definition-
characteristics.html#:~:text=Organizational%20culture%20is%20a%20system,act%2C%20and
%20perform%20their%20jobs.>.
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