Management Report: PESTEL Analysis of Starbucks and Emirates Airlines

This management report provides a detailed PESTEL analysis of Starbucks and Emirates Airlines, examining the external factors impacting their operations. The report begins with an analysis of Starbucks, highlighting opportunities within a stable political environment and addressing threats like home-based coffee machines. It emphasizes the importance of cost reduction and value enhancement for customer loyalty, particularly during economic downturns. The report then shifts to Emirates Airlines, exploring political, economic, social, technological, legal, and environmental factors. It discusses the airline's sensitivity to political changes, currency fluctuations, and the impact of technological advancements. The analysis also considers social trends, legal regulations, and environmental concerns, concluding that Emirates operates in a politically stable environment but faces challenges related to environmental regulations. The report underscores the need for Emirates to reduce carbon emissions and improve CSR practices to maintain competitiveness. The report includes a detailed breakdown of the PESTEL framework for both companies, offering valuable insights into their strategic positioning and challenges within the global market.

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Table of Contents
Answer to Question 1.................................................................................................................2
Answer to Question 2.................................................................................................................3
PESTEL Analysis of Emirates Airlines.................................................................................3
References..................................................................................................................................6

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Answer to Question 1
From the PESTEL analysis of Starbucks, it can be seen and analyzed that the external
environment of Starbucks is providing them with high level of opportunities as the political
environment is stable and it will be helping them in improving the growth prospects in
comparison to other competitors (Stevenson and Marintseva 2019). However, on the other
hand, the respective company needs to work for addressing identified threats, which includes
the threat of the different substitution which are present in the market. There is substitution
which is linked with the presence of the availability of the home-based speciality coffee
machines which will be making them efficient and it will be decreasing the sales and
revenues of the company to a great extent as well (Olson et al. 2018).
The preceding analysis of Starbucks helps in proving the point that the company is
operating in the food and beverage sector and in case of any kind of recession or others, the
consumers will be never be cutting down on purchasing the food products. There can be
partially change in the buying patterns, however, they will not be stopping the entire purchase
of the food items (Odongo, Mugambi and Abayo 2019). Therefore, in case of recession, it is
the most essential factor and due to the respective fact, Starbucks is needed to lower the costs
and increase the entire value successfully. It will be helpful for the company and the
customers in becoming loyal towards the company and it will be helping company in
generating high level of profitability in the market successfully (Kara 2018).
The PESTEL Analysis is considered to be one of the most successful and useful tools
as it is helpful for better understandability of the business environment before launching the
respective product or service in the competitive business environment. The proper analysis of
the existing business environment is the key element are done with the hope of finding the
different new opportunities along with identifying potential threats which can be affecting the

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prospects of the business negatively. It is cost effective which provides the deep
understanding of the business, alertness or threats and it is the method for exploiting the
different opportunities.
Answer to Question 2
PESTEL Analysis of Emirates Airlines
Emirates Airlines and entire group has been capable of earning high level of turnover
of $12 billion with more than 40000 employees. The professional development opportunities
help in allowing the different employees in developing different skills that will be enable
them in growing careers in future (Emirates.com 2020).
Political Analysis- The airline industry can be easily getting affected by different
political changes that helps in showing the fact that the respective industry is sensitive. The
recent kind of political and economic instability in Asia has been effective for Emirates in
earning high level of profitability (David, David and David, 2017. The different customers
are preferring to opt for Emirates Airlines instead of preferring flights of different countries.
However, there are few rules and regulations which needs to be followed by Emirates
Airlines as it is based on the property of Dubai government. However, there are different
kinds of war which can be affecting the service.
Economic Analysis- Emirates is one of the international airline companies and
therefore the money is collected in different kinds of currencies. Therefore, any kind of
sudden change in the currency change as well as exchange can be leading to the fluctuation of
sales as well as revenues (Chernev 2018). However, on the other hand, the decline in the
prices of the oil can be helpful for Emirates and other airline companies in reducing demand

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for the premium travel to Dubai. Emirates Airline is one of the competitive kind of airlines
and the economical environment is stable as well as favourable in nature.
Social Analysis- There is rapid increase in the world population due to which it is
considered to be the positive impact on the entire airline industry. The lucrative segment for
the Emirates Airline is the baby boomers which helps them in increasing their sales and
revenues in a successful manner (Chernev 2018). Millennial travellers are rapidly increasing
in the economy which makes them highly efficient in improving their growth prospects in a
suitable manner. In the emerging nations in the entire world, the disposable income of the
middle-class people s rising and they are discovering different level of opportunities for
managing growth successfully.
Technological Analysis- In the airline industry, the digital technology is the main
element which plays a vital role in improving their functions as well as operations
successfully. The different services of the company have been designed in an exceptional
manner for meeting expectations of customers and generate competitiveness (Chen 2016).
The emergence of internet as well as the IT technology which helps in allowing the
customers in getting attracted towards the same successfully. However, on the negative side,
it has been seen that major kind of advancements in the aviation industry is influencing the
efficiency related to fuel and the airline manufacturers are under pressure always as well.
Legal Analysis- There are different kinds of legal rules and regulations wherein the
government under the pacific areas are operated under the paternal policy. The different
government policies can be protecting the airlines company which will be affecting growth
and profitability of company negatively. The recent kinds of restrictions regarding travel
which are applicable to citizens from selection of the high-risk countries to US is addressing
concerns related to safety (Chen 2016).

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Environmental Analysis- The entire airline industry is mainly responsible for 12% or
more emission of carbon in the entire transportation industry. The bad weather conditions can
be impacting the airline industry and their operations negatively (Chen 2016).
From the PESTEL Analysis of Emirates Airlines, it can be seen that the company is
operating in the political stable environment which will be helpful for generating revenues in
a proper manner. However, there are different environment and legal rules and regulations
which can be impacting their profitability negatively and in order to improve the respective
scenario, the company needs to reduce the carbon emission through improving the CSR
practices and gain competitiveness in the market successfully and within the stipulated time
frame (Emirates.com 2020).

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References
Chen, I.S., 2016. A combined MCDM model based on DEMATEL and ANP for the selection
of airline service quality improvement criteria: A study based on the Taiwanese airline
industry. Journal of Air Transport Management, 57, pp.7-18.
Chernev, A., 2018. Strategic marketing management. Cerebellum Press.
David, M.E., David, F.R. and David, F.R., 2017. The quantitative strategic planning matrix: a
new marketing tool. Journal of strategic Marketing, 25(4), pp.342-352.
Emirates.com 2020 Emirates.com-Fly Emirates-Emirates Official Website (Online) Retrieved
from https://www.emirates.com [Accessed on 29th February 2020]
Kara, E., 2018. A contemporary approach for strategic management in tourism sector: pestel
analysis on the city Muğla, Turkey. İşletme Araştırmaları Dergisi, 10(2), pp.598-608.
Odongo, O.O., Mugambi, H. and Abayo, R., 2019. Influence of labor relations on
performance of airline industry: A case study of Kenya Airways Limited. International
Academic Journal of Human Resource and Business Administration, 3(6), pp.162-178.
Olson, E.M., Slater, S.F., Hult, G.T.M. and Olson, K.M., 2018. The application of human
resource management policies within the marketing organization: The impact on business and
marketing strategy implementation. Industrial Marketing Management, 69, pp.62-73.
Stevenson, I. and Marintseva, K., 2019. A review of Corporate Social Responsibility
assessment and reporting techniques in the aviation industry. Transportation Research
Procedia, 43, pp.93-103.