Environmental Analysis of Starbucks

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STRATEGIC MANAGEMENT

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Environmental analysis of Starbucks
The environmental analysis of Starbucks is presented below with the help of PESTLE
analysis tool and with five forces of the industry analysis.
Pestle analysis
 Political Factors – Political factors that may influence Starbucks includes effect of
change in US Administration and Outcomes of trade war with China. For example,
tax cut by trump administration in spite of the rising national debt was reckless and
the company gain interest to hire 10000 refugees in 5-year span of time
(hireimmigrants.ca, 2018). However, people who are supporting Trump government,
as a result, have refused to go to the stores.
 Economic Factors – These factors signify economic changes and conditions
important to business. Considering external environment, Starbucks has various
opportunities from economic factors such as high development in developing
countries, and declining unemployment rates. However, rising cost of labor in
supplier country threat their business as the firm gains much if its coffee beans from
emerging nations. In addition, the company will also be benefitted with the strong
GDP of the nation as it was identified that country current-dollar GDP raised to 5.2
per cent, or $1.02 trillion, in 2018 to a level of $20.50 trillion, related with an upsurge
of 4.2 per cent, or $778.2 billion, in 2017 (bea.gov, 2018).
 Social Factors – It includes social trends and conditions such as increasing health
consciousness and growing coffee culture. The company is undertaking social issues
very carefully as last year, more than 8,000 stores of the company were closed so as to
offer training program to more than 175,000 employees build to address implicit bias
and encourage conscious inclusion (Silva, 2018).
 Technical Factors – Changes in technological advancement requires Starbucks to
reinforce its strategies like focusing on digitization, targeting customer by data
analytics and build out mobile-based platforms. However, Starbucks is doing really
good considering technological aspects like the company formed digital strategy with
the “digital flywheel” recently.
 Legal Factors – At present, the company have their operations in more than 78
countries and thus changes in tax rates and risk of infringements and litigations may