Starbucks Corporation | PESTLE Analysis

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Strategy

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Contents
Introduction......................................................................................................................................2
External Environmental analysis.....................................................................................................3
PESTEL analysis..........................................................................................................................3
Porters 5 force analysis................................................................................................................5
Industry Life cycle Model............................................................................................................7
Opportunities and threats.............................................................................................................7
Internal Environmental Analysis.....................................................................................................8
VRIO model.................................................................................................................................8
Strengths and Weaknesses.........................................................................................................10
Recommendation...........................................................................................................................11
Stakeholder report..........................................................................................................................12
Reference.......................................................................................................................................14

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Introduction
Starbucks Corporation is an American coffee company and coffeehouse chain. It was founded in
Seattle, Washington. It was established on March 31, 1971, and the founders of the corporation
are Jerry Baldwin, Zev Siegl and Gordan Bowker. Starbucks is serving in more than 28,000
locations. It includes more than 182,000 employees. They include roasted and handcrafted high-
quality coffees, tea, beverages and snacks (Starbucks Corp, 2018). Starbucks deals in marketing
te products with the help of company-operated and licensed stores. The mission statement of the
organization includes inspiring and nurturing the human spirit. The main aim of the organization
is to develop a wide range of products in the market. Their vision includes establishing the most
recognized and leading brand in the world. High-quality products and service, well-managed
brand and reputation social responsibility make the company consumers and investors. The
competitors of Starbucks are Caribou Coffee, McDonald’s, Dunkin’ Donuts and Peet’s Coffee &
Tea.
Starbucks' main competitors are fast-food restaurants and specialty coffee shops. There are a
large number of competitors in the specialty coffee beverage industry. The company believes
that its customers mainly choose retailers based on product service, service, price, and
convenience. Recently, Starbucks experienced intense direct competition from large American
competitors from fast-food restaurants. The marketing and operating resources of these
restaurants are far greater. As the competition in the US ready-to-drink coffee beverage market
intensifies, Starbucks also faces mature competitors in the international market (Starbucks Corp,
2018).
Starbucks' product range has grown to include freshly brewed coffee, hot and cold espresso
beverages, mixed coffee and non-coffee beverages, Tazo tea, baked pastries, sandwiches, and
salads. Starbucks appliances include coffee grinders, espresso machines, coffee brewers, music
CDs, books, movies, and gift cards. Global consumer products include bottled Frappuccino, iced
coffee and espresso beverages, whole bean coffee, tea, coffee liqueur, and premium ice cream.
Starbucks understands the concepts of brand recognition and product differentiation (Sari and
Hunar, 2018). They take advantage of consumers' feelings and try to distinguish between
products or services of other companies. Starbucks recognizes that success depends on the value

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of the Starbucks brand, and Starbucks has a high reputation for its product quality, excellence,
and consistent customer service.
Starbucks is not the only coffee shop on the market, other products such as Dunkin 'Donuts,
McDonald's and Panera Bread have the same taste and effect as Starbucks beer, but they can
induce them to blend in and charge a high price to have a rich life among customers The aroma
of the way. There are other homogenous coffee shops on the market, but their loyal customers
believe that no other coffee brewing unit can find good quality, taste, and aroma. On the one
hand, their customers are more interested in dressing up with Starbucks Cup representatives, but
due to the current economic situation, their customers are beginning to reconsider their impact on
the price of black gold they drink (Sari and Hunar, 2018).
Starbucks fully shut down its operations for several hours for employee training. Dunkin Donuts
took this opportunity to win new customers. Dunkin Donuts sells small amounts of latte,
cappuccino or espresso for 99 cents (Sakal, 2018).
External Environmental analysis
PESTEL analysis
Political factors
Political factors impact the business which includes following the laws and regulations of the
countries for sourcing the raw materials. Starbucks is required to follow the social and
environmental norms sourcing strategies that are effective and includes fair trade practices for
the growth of the business (Shirdastian, et al., 2019).
Economic factors
The economic factor which drives the Starbucks is the global economic recession. In an
economic situation, it is necessary to consider the buying power of consumers as it reduces or
increases the overall profits of the organization. The currency exchange rate is required to be
considered by the organization for expanding the business. the factors which impact the
Starbucks are taxation level, economic environment and exchange rates of currency (Shirdastian,
et al., 2019).