Strategic Management and PESTLE Analysis

This assignment provides a comprehensive example of strategic management and PESTLE analysis. It includes a discussion on the importance of ethics, values, and norms in guiding employee behavior within an organization. The entity prioritizes customer satisfaction, producing quality products and services while training employees to maintain an ethical environment. References are provided from books, journals, and online sources, including SWOT analyses of Starbucks and other organizations.

Strategic Hospitality
management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Mission, vision and objectives of Starbucks.........................................................................1
1.2 Stakeholder power/interest matrix of Starbucks...................................................................2
1.3 PESTLE analysis of Starbucks..............................................................................................3
1.4 SWOT analysis of Starbucks................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic Management includes the formulation and execution of majour goals and
objective taken by the company's top level of management. Where the company analyse its
external and internal environment and their effect on organisation and its performance. It
provide direction to the managers to create management objective, policies and plans to
achieve long term goal. Some tools are created to analyse the performace of entity are SWOT
and PESTLE analysis. Starbucks is UK based company which have thier coffee-house in all
over the world. The company produce premium class products which target young people.
Objective of company is to provide ethical environment in outlet and excellence in consumer
satisfaction.
TASK 1
1.1 Mission, vision and objectives of Starbucks
The mission and Vision statement communicate the organisation reason for their
establishment and how they serve to their stakeholders that are customers, employees and
investors. Mission statement are often longer than vision, they conclude the firm's values.
Starbucks mission and vision statement states that the company emphasis on leadership in the
coffee-house industry (Islam and Mamun, 2017). The mission statement of Starbucks are “
To Inspire And Nurture The Human Spirit- One Person, One Cup And One Neighbourhood
at a time”. This provide that:
 To provide ethical environment the work premiss and treat every individual with
respect and dignity
 Application of the standard of excellence while purchasing, roasting and delivering of
coffee.
 Develop enthusiasm in employee’s and deliver coffee to customer which satisfy them.
 Contribute positively to communities and environment.
 Profitability is essential element for the future success (Starbucks, 2008).
The company maintains maintain a small organisation culture, where they cares about
the customer's experience (Islam and Mamun, 2017). It also means that the venture plans the
continuously and gradually grow the businesses, one place or neighbourhood at a time.
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The vision statement of Starbucks is “ To create the company as the powerful
respected and recognized brand in all over the world and becoming the natural organisation
with the ethics, values and norms by guiding employee’s to make it happen”. The statement
states that the firm uses to measure their decision, actions and ideas. Every customer and
employees are important for the company, they provide the best consumer service with the
help of employee’s empowerment. The company has created harmonious work environment
where every worker can give their best that is free from discrimination.
Objective of the company is to maintain its standard to become worlds most
recognized and respected brand. The plan to achieve these objective is to respect the customer
and employee’s of the entity. Their goal is to be leading retailer brand for coffee maker for
each of their target market by selling the best quality coffee and related products and
delivering the each client a unique Starbucks experience. Their objective is to expand their
business globally to capture large market share and gain brand awareness. Their marketing
strategy market expansion and product expansion, where the sell same product to new
customer and new products to old market. They provide superior quality goods and customer
service with well maintained company oriented store that reflects the personality of
community in which they operate. They build high level of customer loyalty (Jahangiri,
2016). Their tactics is to create new and innovative products for maintaining loyal consumer.
1.2 Stakeholder power/interest matrix of Starbucks
The company contribute to improve its corporate social responsibility to address the
concern of different stakeholder. The following are the main:
Employees: In Starbucks, employee’s demand the good working condition, higher wages, job
security. The organisation's culture focus on employee’s first attitude. In 2014, the company
boost their corporate social responsibilities by providing scholarship to the employee’s based
on partnership with Arizona State University. In this company paid 56% of tuition fees for
them. They hire baristas who only serve coffee and beverage, they train them to provide best
experience to customer.
Customer: The company consider them main stakeholder, they provide high quality od goods
and personalised services to them such as beverages and coffee (Islam and Mamun, 2017). It
is the world famous speciality chain coffee-house. They provide environment of cafe
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according to customer culture. They provide a coffee glass where names of customer and
quotes are written. They provide warm and friendly relation environment of outlet where
baristas interact with them.
Environment; the company organise cafe programs that has leads to great biodiversity and
shape quality of beans in certified cafe farms. The company take 90% of inventory from that
farms only which maintain the quality of coffee beans.
Investors: They are having interest in financial performance of the company. As company is
expanding globally which has enhanced the finance performance of them (Islam and Mamun,
2017). They are dominating their competitor which increase their profitability and helps them
to attract large number of investors.
Government: The company is following the rules and regulation made by government. The
company use network of location in different countries to exploit tax benefits, they are paying
very low tax in UK.
1.3 PESTLE analysis of Starbucks
It measures the company market and its potential for the external environment, which
are as follows:
 Political factors: It includes rules and regulation made by government and other legal
issues which include formal and informal rules which is to be followed by the
company. When the company enter into the new market, lots of challenges he has to
face such as pricing regulation, taxation rules and policies, environmental laws,
property protection laws, wages law, employment laws, political instability, trade
restriction and limitation. Government attitude towards the organisation is also
political factor that effect the company. It was declared that the company was not
paying corporation tax in UK from 15 years. Accounts committee of UK government
investigate and ask question in the parliament which damage the company image.
These external political factor are not in the control of company (Islam and Mamun,
2017).
 Economical: Many economic factors affect the purchasing power of the customer and
cost of capital for company. The company launches new coffee-house in UK, they are
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affected by economic growth, currency exchange rates, interest rates and inflation
rate. There are four stage in economic like cycle that is expansion, inflation, deflation
and recovery. All the stages have different interest rate, market rate and accordingly
customer have their purchasing power. Such as inflation rate effect the cost of capital,
exchange rate effect the cost of import and export of goods, distribution of products
and price of imported material. The company import coffee beans from America. The
company should consider some factors that are type of economic system, interest rate,
effectiveness of the financial market, economic growth rate, discriminatory income,
exchange rate, currency rate of host country and government involvement in different
activities (Jahangiri, 2016).
 Social factor: It plays a very important role while launching the company products in
new market. When the organisation enter into UK they targeted young people keeping
the culture and trends of market. Starbucks consider some factor that help to select
their target market such as health consciousness of people, age discrimination,
attitude, population growth rate, demographics, class structure, education, age
discrimination and culture. Some factors are threats and some are opportunity for
them like growing coffee culture and increase in middle class people is opportunity
for when whereas age discrimination are threat for them (Islam and Mamun, 2017).
 Technological: These are the factors which help in reducing the barriers for entering
into new market. The company is using innovative technology and equipment in
different outlet. By using technology, they are increasing production for coffee
products. Some reason that influence the organisation and its products are research
and development activity, automation of the system, data base management, impact
on cost culture, rate of technology up-gradation and technology incentives (Islam and
Mamun, 2017). Starbucks have opportunity to increase their mobile apps and linked
services to generate more revenues by the way of mobile purchase, they can improve
their supply chain efficiency by the use of technology. The venture have threat that
home made coffee machine are coming, where people make coffee at home and will
not visit outlets.
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 Environmental: Factors that effect the company are environmental rules and
regulation, disaster like floods, landslide happen where coffee beans are produced and
global warming. The company uses recyclable package which reduce their cost and
will not harm to environment. They use environmentally friendly products which
helps them to enhance corporate social responsibilities.
 Legal factors: The company ensure that they do not run businesses in such way that
breach legal laws and regulations. The organisation has opportunities to build their
performance by satisfying product safety regulation as well as rules on ingredients
GMO.
1.4 SWOT analysis of Starbucks
Starbucks is well known wide spread coffee shop of UK whose positive and negative
tools can understand through SWOT analysis as below:-
Strength
Starbucks establishes good relationship with its
customers.
It is wide spread also has near about 40
branches in different countries all over the
world.
Organization's product services are as brand.
Starbucks has strong financial position to adopt
innovations in quality services of entity.
Weakness
 Starbucks sets very high price of coffee
and services in comparison to other
entities like Costa, Cafe etc.
 Number of competitors are increased
therefore facing competition is quite
difficult.
 High expenses for establishing new
branches outside country.
Opportunities
 By adopting innovative technologies,
Starbucks can enhance varieties in
coffee.
 Through advertising products in more
fascinating ways.
Threats
 Competitive fear.
 Changes in external environmental
factors like political and cultural issues
affect demand for Starbucks' product
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 Starbucks can also create co-branding
with food and drink services.
services.
 New competitors' different policies for
better coffee products and services.
Strength:- Financial position of Starbucks is very strong therefore it can easily adopt
new technologies and can create innovations in business operations. However, it establishes
good relationship with customers including creditors, suppliers and different entities across
country as well internationally. Including this, Starbucks has different branches all over the
world that facilitate a million customers belong to various nations (Jahangiri, 2016).
Weaknesses:- As per critical evaluation on performance of Starbucks, it is evaluated
that there is high level cut throat competition obtained that is difficult to face out. In this
regard, number of competitors are increasing at large scale that also provide varieties of
coffee and services in comparison to Starbucks. Moreover, prices on coffee and services
provided by organization is very high therefore all customers are not affordable to taking
advantage of organization's services.
Opportunities:- For reducing weaknesses of Starbucks, different opportunities can be
grabbed such as adopting innovative techniques for better quality services. Likewise,
advertising brand products in more fascinating manner will be effective for organization to
maintain their attraction. For advertising in better way, packaging goods attractively will be
beneficial to attract its consumers at high level for long time periodicity.
Threats:- There are different threats obtained for Starbucks to make place in market
for long time period. Due to changes in environmental factors like political and cultural
factors affect organization's financial position (Islam and Mamun, 2017). Besides this, there
is fear to face high level of competition because of varieties in coffee and services by other
competitive entities. Thus, these threats are required to be reduced by preparing plans and
following on them effectively.
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CONCLUSION
It can be conclude that Starbucks has a stable internal and external environment. Their
main aim is to create the company as the powerful respected and recognized brand in all over
the world and becoming the natural organisation with the ethics, values and norms by guiding
employee’s to make it happen. The entity consider all the stakeholder while taking the
decision. Customer is key stakeholder for them, where they produce quality product ans
services for them. They train and encourage their employee’s to maintain ethical environment
in outlet. They have generate large number of revenue by expanding their outlet globally.
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REFERENCES
Books and Journal
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Management Journal. 38(1). pp.3-3.
Bettis, R. A. and Mitchell, W., 2016. Creating repeatable cumulative knowledge in strategic
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concepts and cases.
Ethiraj, S. K. and Helfat, C. E., 2016. Replication in strategic management. Strategic Management
Journal. 37(11). pp.2191-2192.
Renz, D. O., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.
Steinbach, A. L. and Cannella, A. A., 2016. Top management team incentive heterogeneity,
strategic investment behavior, and performance: A contingency theory of incentive
alignment. Strategic Management Journal.
Bryce, H. J., 2017. Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
Zuzul, T. and Helfat, C., 2016. Capability lifecycle. The Palgrave Encyclopedia of Strategic
Management. pp.1-5.
Ferlie, E. and Currie, G., 2016. Strategic management in the healthcare sector: the debate about the
resource-based view flourishes in response to recent commentaries. International journal of
health policy and management. 5(2). p.145.
Zhao, E. Y. and Miller, D., 2017. Optimal distinctiveness: Broadening the interface between
institutional theory and strategic management. Strategic Management Journal. 38(1). pp.93-
113.
Atighechian, G. and Jahangiri, K., 2016. Are Macro and Micro Environment Affecting
Management of Fresh Water Resources? A Case from Iran with PESTLE Analysis. Materia
socio-medica. 28(4). p.307.
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Visconti, R.M., 2016. Healthcare Public-Private Partnerships in Italy: Assessing Risk Sharing and
Governance Issues with PESTLE and SWOT Analysis.
Islam, F. R. and Mamun, K. A., 2017. Possibilities and Challenges of Implementing Renewable
Energy in the Light of PESTLE & SWOT Analyses for Island Countries. In Smart Energy
Grid Design for Island Countries (pp. 1-19). Springer International Publishing.
Online
SWOT analysis of Starbucks, 2017. Available through:<https://www.luckscout.com/starbucks-
swot-analysis/>[Accessed on 16th June 2107.
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