PESTLE Analysis of Starbucks | Starbucks PESTLE
In this post, we are going to discuss the Starbucks PESTLE analysis.PESTLE analysis is basically a strategic analysis tool that is really effective to analyze the effect of external problems. Basically, PESTLE analysis is an extended form of ‘’PEST’’ analysis. There are some other types of this analysis tool are PESTEL, STEEPLE, and STEEP. The PESTLE analysis consists of political, economical, social, technological, legal, and environmental factors that help to understand the strategic issues of any company or business.
Starbucks operates in a macroeconomic environment and due to severe economic recession, some companies are struggling badly. Moreover, this kind of recession has changed the purchasing power of the customer. According to recent market research, the consumption of coffee is not reduced despite all the recession. It means that companies can force the consumers to buy these products by providing these products at lower rates. Starbucks also adopting the mobile computing revolution with the collaboration of Apple and also offered discounted coupons. In addition, they are also trying cross-selling and co-branding. In short, Starbucks is trying to take the maximum advantage of Smartphone technology.
Starbucks is also facing different challenges like consumer awareness. Customers in the United States are more concerned about the ethics of the brand they are using. Hence, there are many other factors that are challenging Starbucks. We have organized these problems on the basis of PESTLE factors. In this way, you can understand the factors that impact Starbucks’ business.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Political Factors:
Sourcing the raw material is one of the major political factors. This thing has gained a lot of consideration from the sourcing countries and politicians. Due to these factors, Starbucks wants to stick to environmental and social standards. This thing gives the opportunity Starbucks for fair trade practices. Additionally, they should follow the rules and regulations of the countries from where they purchase raw materials. Due to enhancement in political awareness and activism, it is necessary to follow the proper laws and regulations. The impact of regulatory authority is another major factor. There are several multinational companies that are facing scrutiny in the United States. So, Starbucks should watch the political stability or instability of the country. Here are some other factors that also need your consideration:
- Labor laws.
- Tax guidelines.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Economic Factors:
The current worldwide economic recession is another major impact for the company. As we mentioned above, these factors can create a negative impact on the profitability of the company. This thing can force the consumers to move towards cheaper products. Moreover, the consumption of coffee is not decreased due to these factors, so this can be a big opportunity for Starbucks.
Furthermore, Starbucks should focus on operational charges and increasing labor. The decrease in profits and the inflationary situation can create a negative impact. Here are some important factors that can impact Starbucks:
- Taxation level.
- Local currency exchange rates.
- The confined economic environment in various markets.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Social Factors:
There is a problem quality problem in selling cheap products. This thing is not acceptable for consumers at any cost. It is a major social challenge for Starbucks. It can attract lower-income people but it might break the base consumers of Starbucks. The eco-conscious and ethical users are also concerned about the practices of Starbucks. They worry about the environmental and social norms of the company. Starbucks should focus on Gen-Z and millennials in order to increase its profitability. Below, some of the social factors that Starbucks should consider:
- Consumer choices.
- A major change in the lifestyle of the people.
- Educated people in the markets.
- Changing consumer values.
- Change in work pattern.
- Changing family patterns in Europe and the US.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Technological Factors:
Due to the immense revolution in mobile technology, Starbucks has a good opportunity to exploit these technologies. They recently partnered with Apple in order to give app-based discount promotions. What is more? The company also provides Wi-Fi facilities in its outlets. As most of the generation is tech-savvy, so this factor can play an important role in the popularity of Starbucks. So, you can browse sites and upload pictures while enjoying Starbucks coffee. This thing adds some value to the brand and improves the customer experience. The company is also using mobile payment methods and they successfully tried this service in different locations of the United States. Here are some technological factors to focus on:
- The emergence of new technology.
- Biotechnology.
- Advancements in agriculture.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Legal Factors:
It is important for Starbucks to follow all the rules and regulations of sourcing markets and domestic markets. They should also focus on caffeine consumption and production. In this matter, they should learn the regulatory laws from the health authorities. Ahead, some factors that can impact Starbucks:
- Strict trade and customs laws.
- Licensing regulations.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Environmental Factors:
There are several business practices of Starbucks concern global advocacy groups and activists. These activists are not happy with the business practices of Starbucks, so they should focus on these problems in order to retain the customer’s trust. Here are some factors that Starbucks should consider:
- Strict environmental rules and regulations.
- Ecological disaster in regions which produce coffee beans.
- Different environmental problems and global warming.
PESTLE Analysis of Starbucks | Starbucks PESTLE
Conclusion:
With the PESTLE analysis of Starbucks, we can prove that Starbucks is really in a good position and a stable company in the competitive market. The main strength of this company is its beverage and food industry. This thing shows that the consumption of these products will never reduce. But, the recession is a major challenge in the entire process because it can change the purchasing power of the customers. So, Starbucks should revise its pricing strategy and focus to deliver reasonable products. It is one of the most important factors that help Starbucks to retain its consumer base. In this way, they can attract new consumers and win the trust of the customers. It means Starbucks has plenty of opportunities to expand its business in terms of popularity and profitability.
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