BNU Business Management: Starbucks PESTLE and SWOT Report

This report provides a comprehensive analysis of Starbucks' business operations using the PESTLE and SWOT frameworks. The PESTLE analysis examines the external factors impacting Starbucks, including political stability, economic conditions (like GDP, inflation, and the effects of events like Brexit and COVID-19), social trends (changes in consumer preferences and lifestyles), technological advancements, legal regulations (health and safety, employment laws), and environmental considerations (CSR policies and environmental laws). The SWOT analysis delves into Starbucks' internal factors, outlining its strengths (strong brand image, extensive supply chain), weaknesses (high prices, product imitation, tax avoidance issues), opportunities (expansion in developing countries, strategic alliances, new product development), and threats (competition from local cafes and large outlets, and the impact of events like COVID-19). The report concludes by highlighting key factors influencing Starbucks' performance and its strategic position in the market.

BUSINESS
MANAGEMENT

Introduction
There are some external factors which impact
directly on business operations. This is
because these are not controlled as it exists
outside organization.
So, it sets boundary of business in which they
have to operate. However, those factors
needs to be identified so that strategy is
developed to minimize its impact on business
operations.
Likewise, in Starbucks as well there are some
factor which is defined as

Pestle analysis of Starbucks
Political factors-
 It is a factor which is related to political stability of a
country.
This highly influence on business operations as any
change in political condition results in change of laws
and regulations,, government etc..
 Starbucks operate globally thus any change in political
condition will affect on its operations in negative way

Economic- the factors are related to economic growth
of a nation. Any change in GDP, income level, inflation
rate etc due to Brexit and covid 19 economic growth of
nations has declined. Similarly, Starbucks operations is
affected in negative way.
Social- they are those factors that is related to change in
taste and preference, needs, lifestyle of people. If the
needs changes then it directly influence on business
operations.

CONT..
Technological- This factor is known as Technological
advancement. There are many companies using
technology in operations
Legal- they are those factors which is related health and
safety, employment law followed by business.. So any
change in these highly impact on business operations
Environmental- this is a factor include environmental
law, CSR policy, etc which directly influence business
operations.

SWOT analysis-
It is a tool which is useful in finding out internal factor which
affect on business operations. It consists of strength, weakness,
opportunity and threat. Thus SWOT of Starbucks is described as
Strength
It is having a strong brand image in foof and beverage industry.
With this they are having a large customer base and strong
financial performance in market. The profit generated by them
in 2019 is $3.6 billion
They are having an extensive support chain at global level
which helps in delivering coffee beans to all stores in limited
time period.

CONT..
Weakness
For middle class people coffee price of Starbucks is
high as compared to McDonald’s, CCD etc due to it
they are not able to attract those target audience
Starbucks imitate products which are also offered by
company like McDonald’s and dunkin donut. Hence,
products offered are same.
Due to its tax avoidance in EU company also faced
many other issues that is affecting on their brand
image.

CONT…
Opportunities
Starbucks can expand in developing countries where
there exists large growth opportunities. It will enable
in attracting more people and generating sales and
revenue.
They can acquire or do strategic alignment with some
other coffee chains. By doing partnership they can
create brand awareness in market and increase sales.
New coffee products can be launched as per needs of
people. For instance, natural and herbal coffee for
health conscious people. In this way they can enter in
other markets and increase customer base.

CONT…
Threats
There are many local coffee cafe which is offering high quality coffee
at low prices as compared to Starbucks. Thus, it is a major threat to it.
The company can face tough competition from big outlet such as
McDonald’s. And many other firms.
Due to covid 19 Starbucks may need to close their outlets as well. It
will impact on their revenue and growth.

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