Global Business Environment: Starbucks PESTEL Analysis and Drivers

This report provides a PESTEL analysis of Starbucks within the global business environment. The introduction defines the global business environment and its impact on business operations. The main body applies the PESTEL framework to Starbucks, examining political, economic, social, technologi...Read More

Global Business Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
REFERENCES................................................................................................................................5
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INTRODUCTION
Global business environment is defined as the business environment of different
countries which effect the home environment of the organization operating in different country.
The global business environment has impact on the decision making regarding usage of
resources and the abilities of the employees in carrying business operations (Chasdi, 2017).
MAIN BODY
PESTEL is a analysis tool which helps in building strategics in business in order to
facilitate smooth functioning of the company (Ferraro and Briody, 2017). PESTEL analysis of
Starbucks is as follow-
Political factors
The main problem Starbucks is facing due to political factors is sourcing and acquisition
of raw material. The company need to follow all the rules and regulations of the countries from
where they are purchasing raw materials (Kasemsap, 2015).
Economic factor
As Starbucks is operating at international level so the global economic recession is
effecting the profitability of company. Due to recession stage in economic, customers have no
option but to shift to other cheap substitutes (Bhagra and Sharma, 2018).
Social factors
The changing behaviour of customers has great impact on the functioning of the company
as customers are becoming more health concessions and are avoiding high calorie and high fat
liquids and foods. Hence, effecting the sales of the Starbucks (Kasemsap, 2018).
Technological factor
Starbucks holds good position in marketplace and able to established its brand name in
the society. The company has formed partnership with Apple which has proved beneficial for
Starbucks as with the support of Apple they has bring the mobile application based discount
coupons to drive customer attention (Mathews, 2016). Moreover company has introduce the Wi-
Fi facilities in its outlets so that customers can use it and spend more time in their coffee outlets
(Amankwah-Amoah, 2016).
Environmental factor
The environmental rules and regulations play important role in the operations of business
as its essential for company to follow them in order to survive in market (Hamilton and Webster,
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2018). Moreover the environmental disasters will effect the production of coffee beans and it
will have negative impact on the business of Starbucks as they face shortage in raw materials.
Legal factors
For Starbucks its very important to consider and follow all the laws and regulations of the
countries in which they are operating and should not violate any laws (Tallman, Luo and
Buckley, 2018). Moreover company should also focus on caffeine production and consumption
related policies so that it won't face any problem because of them (Hill and et.al., 2017).
Key drivers of changes
 Social factor: The impact of external environment, management should focus on
regional integration as it is in trend and expand its global presence. They should add
healthy low fat and calorie beverages in its menu in order to attract customers. The
management should focus on holding customer trust as many times customers do not
express their problems and issues (Kokodey, Gnezdova and Lomachenko, 2018).
 Political factors: The management should expand its business in developing countries as
their growth rate is quite high and are politically stable (Kasemsap, 2016).
 Environmental factors: Management of Starbucks should focus on using environmental
friendly products in its operations in order to cooperate with the environmental rules and
regulations (Bedianashvili, 2016).
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REFERENCES
Books & Journals
Chasdi, R.J., 2017. Corporate Security Crossroads: Responding To Terrorism, Cyberthreats,
and Other Hazards in the Global Business Environment. ABC-CLIO.
Mathews, J., 2016. Toward a conceptual model of global leadership. IUP Journal of
Organizational Behavior. 15(2). p.38.
Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global
Strategy Journal. 8(4). pp.517-535.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Bedianashvili, G., 2016. The Global Business Environment, European Integration and the
Cultural Potential of Social-economic Development of Georgia. Globalization &
Business.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Bhagra, A. and Sharma, D.K., 2018. Changing paradigm of employability skills in the global
business world: A review. IUP Journal of Soft Skills. 12(2). pp.7-24.
Kasemsap, K., 2015. The role of cloud computing adoption in global business. In Delivery and
adoption of cloud computing services in contemporary organizations (pp. 26-55). IGI
Global.
Ferraro, G.P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Amankwah-Amoah, J., 2016. Global business and emerging economies: Towards a new
perspective on the effects of e-waste. Technological Forecasting and Social Change.
105. pp.20-26.
Hill, C. and et.al., 2017. Global Business Today Asia-Pacific Perspective. McGraw-Hill
Education.
Kasemsap, K., 2016. Advocating entrepreneurship education and knowledge management in
global business. In Handbook of research on entrepreneurship in the contemporary
knowledge-based global economy (pp. 313-339). IGI Global.
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