SWOT and PESTEL analysis of Starbucks

Context of Business
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. SWOT and PESTEL analysis of Starbucks........................................................................3
Strengths..........................................................................................................................................3
2. Evaluate the CSR activities and their influence.................................................................5
3. Styles of leadership.............................................................................................................7
4. Organizational Culture.......................................................................................................8
5. Reflection Report..............................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business organisations functions in the marketplace with the primary objective of
becoming successful with profit earning motive (Wang and et.al., 2016). In order to accomplish
this objective, it is essential for organisations to consider various factors such as micro and
macro environmental factors with adoption of latest technology and strategies. All these factor
are responsible for determining the success of an organisation. The organisation chosen for this
report is Starbucks, which is one of the leading coffee-house chain in the marketplace operating
at international level. The company deals in wide range of coffee products such as espresso
items, brewing accessories and refreshments, etc. across the globe. The topics covered in report
are various internal and external factors that affect the business of Starbucks, corporate
responsibility goals, the role of leaders in operational activities, importance of organisation
culture in context of its contribution in success of organisation and involve reflection report.
MAIN BODY
1. SWOT and PESTEL analysis of Starbucks
Starbucks has able to maintain its number one position in beverage industry mainly in
coffee section through strategic planning and innovation. This is possible by enhancing strengths
and overcoming the weaknesses along with considering external environment and identifying
opportunities and threats to take corrective measures accordingly. The SWOT analysis of
Starbucks is as follow-
Strengths
 Efficient Branding: The company has able to established its brand image in food and
beverage industry by providing quality products with good service management which
provide support in covid case. As due to good brand image people trust the brand.
 Efficient strategic planning: The company is operating at international level and has
developed effective strategic planning for its different branches in the most efficient
manner. The company continuously focus on expansion so it adopt the strategy of
reinvesting its profits in the business growth (Dörndorfer, Hopfensperger and Seel, 2019).
Weaknesses
 Premium pricing policy: The company has adopted the premium pricing policy that is
dealing in high price. Starbucks is targeting high income group people where focus is on
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limited market and able to increase its profit margins. Due to covid situation company
has to make changes in its prices of products.
 Lack of USP: The company is not following separate USP due to which company is
facing difficulty in achieving differentiation advantage. The products of the company are
imitable and can be used by any other competitor at low cost. As a result the company
might face huge loss of revenue.
Opportunities
 Expansion opportunities: The headquarter of the company is in USA, and able to
establish its brand in other countries and has more expansion opportunities opened in the
market place. Whereas due to the covid situation less opportunities are available for
expansion.
 Introduction of new products: The company has able to established its brand value in
marketplace which is facilitating great opportunity for Starbucks to introduce its new
range of products. This will help company in gaining customer attention and lead to
increase in its sales volume. As company is already famous for its current range of
products, the new product range will easily get established and known in the market.
Threats
 High Competition: In this scenario company is facing high competition in marketplace as
n number of substitutes are available in market which may lead to decrease in the sales of
products. Due to covid situation the competition in market get decreased as many
companies get liquidated.
PESTEL analysis
The companies use PESTEL analysis to understand the factors which affect the
businesses externally (Souto, 2015). The market for products are dynamic and there is a need for
management to understand the factors which affects businesses and help them to analyse the
market.
 Political Factors- Businesses which has its operations in many countries and their
operations are affected by the political boundaries of countries. Starbucks has to pay
taxes which affects the direct cost like custom duty, excise duty, service tax. Starbucks
has its major revenue from developing markets where their share is 75%. The Covid-19
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