Analysis of Starbucks' Business Environment and Structure Report

This report provides a detailed analysis of the business environment, focusing on Starbucks as a case study. It begins by defining the business environment and its importance, followed by an examination of different organizational types (private, public, and voluntary) and their legal structures. The report then delves into the size and scope of these organizations, using Starbucks, the National Health Service (NHS), and Oxfam as examples. It explores the relationship between organizational objectives and structure, identifying macro-environmental factors that positively and negatively impact businesses. A key section involves an internal and external analysis of Starbucks, including its strengths, weaknesses, and their interrelation with macro-environmental factors, culminating in a conclusion that summarizes the key findings. The report utilizes contemporary examples and provides a comprehensive overview of the business environment's impact on organizational strategy and operations.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types and purpose of organisations with their legal structures.........................1
P2 Explain the size and scope of a range of different types of organisation..........................4
TASK 2 ...........................................................................................................................................6
P3 Relationship between various organisational objectives and structure ............................6
TASK 3............................................................................................................................................8
P4. Identification of macro environment's positive and negative impacts.............................8
TASK 4..........................................................................................................................................10
P5. Internal and External analysis of Starbucks...................................................................10
P6. Explanation of interrelation of strengths and weaknesses with macro environment factors
..............................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business Environment refers to the surrounding of an organisation, which is related to all
the factors and elements that either influence or impact the workings and functioning of an a
company. Furthermore, it is a very important factor for a firm to analyse this environment as it
provides a prominent insight to the companies in relation to these aspects as it helps in enhancing
the scope of improvement when it comes to formation of strategies and operations (Wood and
Logsdon, 2017). In this relation, the report below is based on Starbucks, which is one of the most
effective, recognised and leading organisations of the organisation. In this relation, the report
covers appropriate and effective insight onto the business environment of the company, which
covers explanation of different types, sizes and scopes of a company, along with demonstration
of interrelationship of several functions and how they link with the organisational structure. In
addition to this, it also undertakes use contemporary examples in order to demonstrate several
factors which either positively or negatively influence the organisation, as well as internal
strengths and weaknesses of specific businesses and their interrelationship with external macro
factors.
TASK 1
P1. Different types and purpose of organisations with their legal structures
Organisations is the group or unit of people who are collected in order to achieve the
individuals as well as organisational goals.
Private Organisation: These organisations are runs and owned by the individualist in order to
earn profit and also the part of economy and contribute huge share in the economy. Moreover,
these organisations raise their own profits by themselves and also follow the rules an regulations
which are made by government and make their own policies to operate their own business. The
profitability form the private sector organisation is beneficial for the owners, shareholders and
the investors. Moreover, these businesses can also collaborate with the government or the public
bodies agencies and termed as public-private partnerships. For instance, Starbucks which is an
American coffee unit and incorporated in 1971 and also operates around 30,000 coffee shops in
different locations.
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Purpose: The overall objective of these organisations is to improve their profitability,
enhance clarity among employees and choose the proper culture for the entity in order to operate
their entity.
Legal Structures: Sole trader: This structure include single individual who runs and operate its organisation
as it is the single trader and in this structure small sum of money is needed in order to set
up their organisation and also has few benefits. Furthermore, this type of unit does not
need tangled paperwork as sole trader is only answerable for the earnings and losses. For
this, they only need to gather funds and capital for their concern and also bear risk for
their business concern ventures. To set up this kind of venture, they does not need the
approval of authorities and public bodies. Partnership: These association are set up by two or more individuals and the limit of
person is maximum 2 and minimum 20. Here, each mate is liable for all the financial
obligation and these partners make agreement in order to justify their rights and
responsibilities which is also known as partnership deed. This deed is a document which
depicts the power, authorities, responsibilities and share ratio etc. about each partner.
This artifact is tangled as it consider lot of work and also take more time in order to form
it.
 Corporation: It is defined by the individuals who make their personal firm in order to
operate their enterprise. These firms are runs and owned by the neutral and they are
appointed by the Board in order to regulate their business. In order to form this structure,
different legal structures and formalities are necessitate and they also need to carry their
own rights and trademarks.
Public Organisation: These enterprises are run and owned by the authorities and public bodies
in order to give their services to general public. These enterprises are run and owned by the
province, general and central governance and also the combination of both the public enterprises
and services. These organisations runs on the commercial grounds has full support of
government and provide various services which is runs by the state government. Moreover,
financial support of these enterprises are raised by the state or local government. In addition to
this, public sector organisations are join with private businesses and termed as public-private
partnership. For instance, National Health Service (NHS) which is the independent public
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healthcare service provider in UK and also various places such as England, Scotland, Wales and
many more.
Purpose: Its purpose is to make changes in the economy also help in developing the
country and dispersed consciousness among people.
Legal Structures: Central Government: It carry different types of business concern roles which are
operated by them and it help in order to power and manage the services and utility of an
organisation. Moreover, this government has the authority and right to make rules and
regulations according to them. Here, the organisations who come under this should take
approval from the government in order to operate their organisation and also indulge
them in decision making procedure (Thompson, Strickland and Gamble, 2015). State Government: This government share their powers and regimes along with the
national governance as they execute many functions which are contained and managed by
the state authorities because some goods and services are supplied by only the state
government.
 Local Government: The function of this government is to gather funds and capital by
considering the name of gathering charge which is called as the council tax by its other
name. Moreover, they plays a significant role in order to analyse the need of individuals.
Voluntary Organisation: This type of business organisations came in marketplace to do societal
welfare work. Here, membership is neither necessary nor required as anyone can become
member to provide their services and its workers are paid or unpaid. Moreover, people link with
these firms with the aim to do social and welfare employment for the miserable and needy group.
These set up are not for the earnings and does not have formal legal cognition in order to run
their business concern functions. As these enterprises are helpful for those who does not have
enough points and provide finances to them. For instance, Oxfam is a charitable organisations
and put emphasis on the alleviation of global poverty and incorporated in 1942 and led by Oxfam
international.
Purpose: Their objective is to connect and collect people and also enhance their services.
These enterprises work and provide their services to the poor and needy people.
Legal Structures:
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 Trust: This kind of generous trust is owned and functioned by the group of people which
are reasoned as the trustees. These units are run and managed by the trust feat which is
more flexile and managed. Trustees are not elective as they are nominated by the Board
or the members. To establish the trust group, their associates make an understanding
which is in the written form or the document which depicts the following rights and
powers and known as trust deed and also describe that an organisation is relies under
legal terms and conditions and become the legal charitable trust.
 Unincorporated Association: It is the type of charity which is set up the regulation and
laws which are not described or registered under fundamental law. In addition to this, this
structure carry different limitations of liability as the associates of administration would
come into any sort of agreements on the position of charity. Here, enterprises add various
features and restrictions on the regulations or the distribution of funding and capital.
Dissimilar an incorporated organization which is the example of limited entity an
unincorporated firm is not a legal entity in terms of laws and legislations (Saleem, 2017).
P2 Discuss the size as well as scope of range of various kinds of organisation
There are various sort of business entities within the business environment including
private, public & voluntary organisations. The basic objective of companies is to attract more
shareholders and maximise the opportunities to sustain in market for longer period.
Private organisations:
These organisations basically works for maximising their sales and profits. The top level
managers of the company develops strategies and plans that are implemented within the
company. Starbucks organisation is an example of American coffee company and coffee house
chain. This is basically involved in providing coffee and other beverages to people. Background: Starbucks Corporation coffee chain of America. This company was
founded in the year 1971 in Seattle (Starbucks Coffee’s Mission Statement & Vision
Statement, 2019). Vision: The vision statement of Starbucks is to treat people like family and provide them
loyal services. Mission: Their mission is to ensure and nurture the human spirit by creating a warm
culture at coffee shops.
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 Objectives: The main objective of Starbucks is to maintain this coffee shop as one of the
best recognised as well as reputed brands within the world. This organization wants to do
business expansion at global markets. Products: There are a number of products and services offered by this coffee chain.
Some of the coffee specialities of this company are cold and hot coffee, Teavana coffee,
Frappuccino beverages, pastries, loose leaf teas, Fresh juices, etc. sometimes this
company offers beer and wine too (Prajogo, 2016). Size: This company provide services worldwide and there are approximately 28,218
employees working in Starbucks.
 Structure: Matrix organisational structure is followed within Starbucks.
Public organisation
These organisations include those firms which have more than fifty percent shares of
Government. This is basically for helping people of country by providing services and products. Background: The National Health Service was started by combining various health
service of England, Wales, Scotland and Ireland. This was started in the year 1948 as
social reform after the second world war. Services & Products: They provide health services within countries and speacial care to
poor people. Vision: The vision of National Health Service is to connect individual and organisations
and develop an environment for improving well being and health of individuals. Mission: The mission of this organisation is to bring different health services together for
providing best outcomes to patients. Size: This organisation sees 1 million patients and it has around 1.7 million staff. This is
the fifth biggest employer in the world (Mission, vision and values of NHS, 2019). Objectives: The basic aim of this organisation is to provide good health services to people
and innovate the medical facilities.
 Structure: National Health Service (NHS) follows Hierarchical type of organisational
structure (Oriesek and Schwarz, 2016).
Voluntary sector
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Voluntary organisations define as all those business organisation which mainly operates
their business functions for the overall development as well as welfare of the society. In
reference to the present organisation which is OXFAM which is a voluntary organisation of UK.
 Background : OXFAM is a confederation of approximately 19 independent charitable
business entities and the main emphasise of these is to remove global poverty
(Oxfam,2019). This was founded in the year 1942.
 Vision: The vision of this organization is to start a global movement against poverty and
give a positive life to all. Mission: The mission statement of this organization is to develop lasting solutions for
injustice of poverty. Size: This organisation is working worldwide and helping people to fight against poverty. Objectives: To help different individuals to fight against poverty and lead a respectful
life.
 Structure: Functional organizational structure is followed by OXFAM.
TASK 2
P3 Relationship among various organisational objectives and structure
Different departments working within company are interrelated and they have to
collaboratively work for achieving the organisational goals. In context of Starbucks, there are
different departments working effectively for providing good services to people. The
interrelation between different departments is mentioned below -
Marketing and finance – Starbucks marketing department is concerned in creating
different plan of action and plans to enhance the sales of the company. Effective and strong
market researches are conducted by Starbucks in order to attract potential customers. The finance
department of Starbucks creates budgets for market plan and research plan. The finance
department is associated with maintaining all funds and money related issues of the marketing
department. Starbucks marketing campaigns are planned and the finance department fixes a
proper fund to organise the same. The inter relationship helps Starbucks for effectively using the
money and funds for various market researches, campaigns and marketing activities
(Madhavaram and Hunt, 2017).
6

HR and marketing – The HR department of companies are involved in recruiting and
selecting best candidates who can work effectively. In Starbucks, the HR managers post job
vacancies in different online and offline portals. On the other hand, marketing department of
Starbucks is involved in enhancing sales of the company. This is done by conducting effective
market researches. Also promotions are done for making the brand popular. There is interrelation
within marketing and HR department. The marketing managers provide information to HR
department about the skills and abilities which must be present within the candidates. Starbucks
has unique style of marketing it's coffee i.e. by writing name on cups in which coffee is served.
So all employees are instructed to provide great services to customers (Jong and Higgins, 2015).
Organisational structure
Organisational structure followed within Starbucks is matrix and this is a hybrid mixture
of other organisational structures. The structural design within Starbucks includes intersections
among different components of business. This can explained with an example, the product based
divisions of Starbucks are intersect with geographical and functional divisions. This intersects
with each other. Starbucks has various departments including HR, finance and marketing.
Corporate HR provide regulations and policies that are implemented within the company. The
hierarchy of corporate structure facilitates top down monitoring and controlling. There are
basically three types of regional divisions within the company including Middle East, Africa,
Europe and Asia Pacific. Starbucks has product-based divisions in its organizational structure
and These divisions address product lines (Hillary, 2017).
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TASK 3
P4. Identification of macro environment's positive and negative impacts
A business organisation's macro environment contains all the external factors that
influence working of the organisation. In addition to this, Starbucks is planning new operations
within the United Kingdom, as it is willing to expand its market in the Fine Dining sector within
the United Kingdom (Fabuš 2017). Hence, there are several factors that are associated with
the same and are mentioned below:
 Political:
One of the major factors which influence a business environment is the political one.
These include the factors that are associated with the political stability and other essential aspects
related to a country's political environment. Hence, as for Starbucks, the political environment of
the UK is explored below:
◦ Positive: One of the positive impacts of the political environment of the UK upon
Starbucks is that the government appropriately supports the food and beverage sector
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Illustration 1: Organisational structure of Starbucks, 2019

in context of develop appropriate infrastructure in terms of exploring more markets as
well as supply chain management.
◦ Negative: Due to the likelihood of Brexit, the political environment of the country is
becoming quite uncertain, which could be a major drawback to the company in
context of managing its supply chain and expand its operations in an uncertain
environment.
 Economical:
This factor appropriately includes the overall economic performance of a nation, that
directly influences the operations and functions of an organisation. In relation to UK, the impact
of this pointer is explained in an effective manner (Erasmus, Strydom and Rudansky-Kloppers,
2016). ◦ Positive: The economy of the United Kingdom is very much progressive and is one of
the world's largest economies, which could be an opportunity for the company to
ensure further investment in the economy to assure highest returns.
◦ Negative: Due to the global inflation and likelihood of Brexit, the economy, despite
of being progressive is running slowly, due to decrease in value of Pound. Hence, this
could be a major disadvantage for the firm to ensure consistent working capital for its
new operations.
 Social:
These factors undertake the trends and customer demands prevailing in the market, which
shapes up the functions of the company in a way which ensures high preference of the company
within the marketplace.
◦ Positive: One of the major opportunities of the company within the UK is that the
customers are inclining more towards adopting fitness lifestyles and organic food.
Hence, the firm must expand its operations by including food items that are healthier.
◦ Negative: Customer preferences are changing drastically and they tend to shift onto
different organisations due to low switching cost, which could be negative for the
organisation in its expansion (Demil and et. al., 2015).
 Technological:
These are the factors which are inclusive of all the technological advancements within the
nation. In terms of Starbucks, this factor is explored below:
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◦ Positive: With technology advancements such as Artificial Intelligence and
Automation, the organisation is very much effective and capable of inclusive
◦ Negative: It could be quite costlier for the company to regularly update the
technologies, which could be disadvantageous in long run.
 Legal:
These factors cover the legislative environment of the country, which covers the laws,
regulations and legislation associated with the company. Hence, for Starbucks, this environment
is explored below:
◦ Positive: The employment legislations such as Equality Act, 2010, expands the
horizon for the company to ensure social inclusion in the organisation while
expanding (Couto, Lopes and Sousa, 2015).
◦ Negative: The regulations of the country are being very much unstable due to
changing conditions with the EU. Hence, it could be a threat to the organisation in
context of getting a firm legislative support.
 Environmental:
In this factor, the environmental concerns are very much taken into consideration, which
must be adopted by the company to support the environment.
◦ Positive: There are several legislations, such as Environmental Protection Act, 1990,
which provides the company a framework to successfully implement the expansion
with adherence to environment.
◦ Negative: Due to climate change issues globally, the firm might face challenges to
acquire land within the United Kingdom to set up their fine dining in an appropriate
manner (Cassidy, 2016).
TASK 4
P5. Internal and External analysis of Starbucks
Internal factors within the organisations are the ones which are associated with the
company and its internal processes. In context of Starbucks, SWOT analysis is included which
are stated below:
STRENGTHS WEAKNESSES
 Effective Brand Image  Premium pricing strategy
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 Enhanced Supply Chain Management  Generalisation in product portfolio
OPPORTUNITIES THREATS
 Strong Market Development in the UK
 Technological Advancements like AI
and Automation.
 Intensive Competition in the UK with
companies like Greggs.
 Controversy related to Brand image
associated with Philadelphia arrests.
P6. Explanation of interrelation of strengths and weaknesses with macro environment factors
It is highly important that the company appropriately and effectively interrelates its
strengths and weaknesses to the external environment to develop an insight onto its competence
(Bah and Fang, 2015). Hence, for Starbucks and its expansion in the UK, these factors are
highlighted below:
 Political:
The firm has effective supply chain as an effective strength. Hence, this aspect is quite
effective in relation to overcoming the unstable political condition of the company.
 Economical:
The nation is currently facing a major economic setback due to likelihood of Brexit,
However, the firm's weakness associated with its high pricing would lead to disadvantage for the
company in context of ensuring successful operations in the country (Aithal, 2016).
 Social:
Customer preferences are highly important for the organisation to understand. However,
due to its controversy of getting two men wrongfully arrested could divert the attention of
customers.
 Technological:
There are several appropriate advancements in the UK within technology such as AI and
Automation, which could present countless opportunities to the company in context of ensure a
competent enhancement of the business operations in the UK.
 Legal:
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The Equality act within the UK is highly necessary for the organisation to follow. This
opportunity would be appropriate for the firm to enhance its strength associated with its brand
image.
 Environmental:
The firm must ensure development of its food products by implementing environment
friendly factors, which is associated with improve the weakness of generalising within its food
production operations (Aithal, 2015).
CONCLUSION
Hence, it could be stated that business environment is highly important for a business to
enhance its operations within a particular country. Moreover, identification of different types and
purposes and explanation of scopes and sizes of range of distinct organisations are required to
understand different aspects associated with the same. Furthermore, explanation of relationships
between several functions of the organisation along with linkages with objectives of the
organisation and structures are very much important to ensure the interrelationships of these
elements. Lastly, internal and internal environment analysis with respect to the firm is crucial to
determine the negative and positive impacts of these aspects upon the organisation.
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