Costa Coffee: Business Environment Analysis in a Global Context

This report provides a comprehensive analysis of Costa Coffee's business environment, focusing on its potential expansion into Poland. It begins with an introduction to Costa Coffee, detailing its history, global presence, financial performance, and recent developments, including its acquisition by Coca-Cola and expansion plans in Poland. The report then delves into the Polish business environment, examining key economic indicators like GDP, inflation, and unemployment rates, alongside Poland's political, legal, social, and technological landscapes. A PESTLE analysis is applied to assess the external factors influencing Costa Coffee's operations in Poland, including political risks, economic conditions, social and cultural influences, legal regulations, and technological advancements. The report also considers the competitive environment, trade and financial aspects, and the challenges and opportunities for Costa Coffee. The conclusion summarizes the key findings and emphasizes the importance of understanding the local market dynamics for successful international expansion. This report aims to provide a detailed overview of the business environment in Poland, and the factors that Costa Coffee must consider for a successful entry into the market.

Business Organisations and Environments in a
Global Context

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INTRODUCTION
Organization has look modification in setting of economic. The key element of success
internationally of companies through improving connection practical application. This prevents
efficient interaction and swift way to international marketplace. There are various situations
while companies are globally operating such as cultural difference, legal issues, HR issues, fiscal
problems etc(Epifanova and et.al., 2015). On other hand, international business environment is
the multi attributes involves dealing risk, legal, taxation risk, cultural difference and political
conditions. Globally business environment consists political, economic, social, legal and
technological surroundings. It offers in promptly approachable mode deeply analysis of business
environment at territorial, national and global levels. This study is based on Costa. It is the
multinational coffee house organization. It is subsidiary company of Whitbread. This assignment
will assess information of chosen business organization. It will discuss allocated business
environment. It will analysis application of appropriate analytical approach by using data and
example from pestle analysis.
MAIN BODY
Introduction of business organization
Costa is the British multinational Coffee house organization headquartered in Dunstable,
Bedfordshire. It is entirely owned subsidiary of Whitbread. Company is the second largest coffee
house chain in the world. Organization was founded in London in 1971 by Costa family as whole
sale operation delivering roasted coffee to caterers and expertise Italian coffee shops. It has since
grown to 3401 stores across 31 nations by acquired by Whitbread in 1995. The business has
2121 UK restaurants, over 6000 Costa Express vending facilities and further 1280 outlets
overseas including 460 in China(Botha, Kourie and Snyman, 2014).
Costa is selling Hot drinks, Cold drinks, Savoury snacks involving sandwiches, breakfast
items, Giant biscuit. The revenue of Costs Coffee houses around 1.167 billion and 153 Million
net income in 2016. The first Costa store outside the UK opened in Dubai in 1999. It was
declared that Coca-Cola attends to buy chain of 3.9 Billion, a deal that is expected to completed
in first half of 2019. Now they are expanding their business in the Poland.
All companies have many competitors, so that there are four challengers such as Cafe
Coffee Day, Barista Lavazza, Mochas and Starbucks. Whitbread 59.5 Million acquisition of
Coffee nation. A chain of devices of Coffee were re-branded as Costa Express. Organization plan
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to expand to target hospitals, colleges and shipping interaction. Company has suffered down in
sales at its high street stores and warned consumers demand remain hushed. Its UK outlets had
fallen 1.45% in the 30 November. Costa's whole UK sales dipped 0.1% in the first quarter
marking only second time they have ever fallen. Company has 1357 high street stores, 1032
franchise stores and 7100 Express machines in the UK. Firm has inclined its own utilization of
disposal cups and is now recycling 12 m year out of yearly 200 m sold. Now they are offering
recycling in every stores. Chain is also contributing 25% discount to consumers bringing in
recyclable cup. The total sales growth of company is 7.5% and return of capital around 46% in
2017.
In the 2017, spending in quick services coffee outlets was forecast to scope 2.4 Billion
British pounds and expected visits to range 673 million. In 2018, revenue of company around
1.00 Billion(Last three year revenue of Costa Group, From 2016 to 2018).
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08/07/1905 09/07/1905 10/07/1905
0
0.2
0.4
0.6
0.8
1
1.2
0.82
0.91
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revenue
Illustration 1: Revenue of Costa Group
Source: (Last three year revenue of Costa Group, from 2016 to 2018)

Introduction of allocated business environment
Poland is the nation located in Central Europe. It is parted into 16 administrative
subdivisions, covering an area of 312,696 square kilometres. Nation has mostly temperate
seasonal climate. Around 38.5 Million people with a population. Poland is developed market and
regional power. It has eighth largest and one of the most dynamic economies in European Union.
Costa Coffee house operators expand their business in many nations, Now they are
opening new coffee house in Poland. Therefore, operators are identified and research about
inflation rate, GDP, population size etc(Bah and Fang, 2015). They are also searched about
market in terms of customers demand, taste and preferences, competitors, legal rules and
regulation, culture etc. After that, they are planned for opening store in chosen nation.
The Gross Domestic Product(GDP) in Poland was worth 524.51 billion US dollar in 2017
and 0.85% Gross values of Poland of the world economy(Poland Gross Domestic Product,
2017). From 1985 until 2017, GDP in Poland averaged 265.34 USD Billion in economy.
The economy of Poland is the fastest growing with the EU having powerful domestic
market, lower private debt, low unemployment rate, flexible currency and not being dependent
on single export sector. It is an example of the transition from centrally planned to primarily
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Illustration 2: Poland GDP
Source: (Poland Gross Domestic Product, 2017)

market based economy. Germany is the largest trading partner of Poland. Liberal law on set up
new company have prevented development of private sector. Chosen country has large number
of private farms in its agriculture sector with the possible to become leading producer of food in
the EU. In September 2018, unemployment rate is low that was estimated at 5.7% in the EU
(Poland Unemployment Rate, 2017).
Poland has pursued policy of liberalising the economy. The nation's most successful
export machinery, furniture, food commodities, clothing, shoes and cosmetics. In October 2018,
annual inflation rate in Poland is expected to decrease to 1.7% from 1.9% in the previous month
and below market expectation of 1.8%.
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Illustration 3: Poland Unemployment Rate
Source: (Poland Unemployment Rate, 2017)

On monthly basis, customer prices went up 0.4%, following 0.2% profit in September.
Inflation rate is averaged 8.44% from 1992 to 2018. The population of Poland defines 0.55% of
the world’s total population which arguably refers that one person in every 183 people on the
planet is resident of chosen country. The total population in select nation was estimated at
38.0Million people in 2018. In the 1960, population size is 29.5 million in Poland.
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Illustration 4: Poland Inflation Rate
Source: (Poland Inflation Rate, 2018)

Figure 1Population of Poland
Source: (Poland’s Population, 2018)
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Appropriate analytical approach
Costa Coffee house is the largest coffee house in UK. Firm expand their business and
open new coffee store in Poland. Therefore, operators of company utilized appropriate approach
for analysis environment of chosen nation for expanding business. So that, they are utilized
pestle analysis for analysis business surroundings of Poland. In this analysis, identify political
issues, legal rules and regulation, taxation etc.
Political environment: It includes exchange rate, foreign direct investment, GDP etc.
These factors are affected on business expansion of Costa. Poland's GDP and unemployment rate
are lowest, so that it is negative impact in business expansion. Therefore, Costa operators
identifies these factors and taking decisions for overcoming on elements. The political area
involves huge effects after regulations of businesses. This involves restrictions on importing
technical, capital products and raw materials. Government regulates facilities and incentives.
They are restricted on exporting product and services, pricing and distribution of goods,
requiring official procedure for setting the business in Poland.
Economic environment: It includes interest, inflation rate, GDP par capita, direct and
indirect tax, level of national, per capita income. Therefore, for expansion of business, operators
of company identify all factors and taking solution of these factors. These elements are included
adjustments in the international marketplace. For example, increase in economic activity increase
the demand of products ultimately decrease price. It involves sources of financial and their costs,
availability of workforce, managerial, technical labour available, their salary and wages
structure. It also includes stage of economic development and pace of growth. Therefore,
company is faced various problems regarding facilities of infrastructure, costs and sources of
financial resources.
Technological environment: It includes level of technological development in the
nation, changes in technical, sources and restriction of transferring technology. These
technological environment consists elements related to material and machines utilized production
of goods and facilities. Level and acceptance of technological innovation in Poland, it is essential
aspect of global business environment. Therefore, Costa's operators identifies and takes decisions
related to adopting of technology for expansion of business in Poland. This give competitive
advantages. Many nations are accepting of technological invention.
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Social and culture environment: This includes changes in social structure in which
involves behaviour, taste and lifestyle of consumers. Therefore, operators of Costa Coffee house
identifies these elements for expanding of business in Poland. These factors affects on
international businesses. This factors also involves effect of social, cultural and religious
elements on acceptableness of good, resistance to changes, demand of products, pricing of good
etc. So that, operators of company make sure that appropriate decisions regarding customer
satisfactions.
Legal environment: It involves different legal factors such as consumer protection,
environment, health and safety, employment law etc. that are applied in every organization.
Therefore, an operator of Costa identifies all legal rules, regulation and policies that are affected
on business expansion in Poland. Poland has number of state helps in measuring in place to
attract foreign investment. While chosen nation has some limitations of foreign direct
investment, its whole regulatory surrounding is complex. In 2013, pointed out that nation’s tax
system remains difficult and invalid. These elements affect company in terms of considerable
study into Poland’s taxation schemes.
Competitive Environment: This environment also modify from nations to nation. This
is partly because of economical, political and social atmospheres. These involves ion
environmental elements that assists in decide type and degree of competitions. It exists in the
chosen nation. This affects on large and small, public and private companies, so that Costa’s
operators are determined the major competitors in the market place. With the help of this factor,
company decide about pricing of product of competitors of marketplace of Poland. Therefore,
operators of company make sure that taking appropriate decision about the pricing of products
that are introduced in the marketplace of chosen country.
Trade and financial environment: It is considered financial stability of country. Poland
performed specific in terms of stability of its exchange rate and banking system. Currency
transaction are treated in Poland depends highly nature of relationship among home country
(UK) and Poland. Therefore, company is faced financial risk in the host country. There are tariff
and non tariff barriers to trade in chosen country which is faced by Costa Coffee House.
Costa is the multinational coffee house in UK. They have expanded many international
operations. Now they are expanded their business expansion in relation to opening coffee store in
Poland. Operators of company identifies different factors such as political risk, financial risk,
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legal rules and regulations, technological development, economic condition etc. In the
economical situation like inflation rate, gross domestic product, population, customers demand,
social and culture factors in the Poland. Operators are also identifies that political factors in
which includes taxation, foreign direct investment, government regulations that are affected on
expanding business in chosen country.
Owner of organization has determined that technological adaption, solving technical
issues that are influenced on business expansion in global context. Therefore, they are selected
Poland for expanding of business. With the help of business environment, operators determine
competitor’s pricing and products, customers demand, trade and financial environment of chosen
country. They are identified customer taste and preferences, cultural difference, needs and wants,
lifestyle of consumer towards product and services of Costs in the Poland.
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CONCLUSION
This report has summarised that background of Costa Coffee house that includes its
financial performance, revenues, profits, losses, location, international operations. It can be
concluded that introduction of Poland there company is expanded their business. It also
determine last three revenue by using graph. Therefore, organization has decided that determine
various factors affects on business. It includes political, legal, social, economical, competitive
etc. It can be discussed that determine GDP rate, population size, inflation rate, GDP per capita,
unemployment rate etc. that have affected on expansion of business globally. Furthermore, report
has completed that determine business environment in the international market. It can be various
elements that includes legal, political risk, cultural difference in business expansion by Costa in
Poland.
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