PEST is a technique used to identified external factors that may create threats or opportunities for a business. The analysis model can be used to determine the most important issues that Starbucks must address in its business strategies (Smithson, 2015). There are four different factors that contribute to the process. Political, Economic, Social, and Technical. Starbucks, as a maket leader, has many factors that contribute to its success as well as its set backs.
Politcal
A wide range of politcal factors can effect Starbuck sales. These effects can happen directly or indirectly. The process of obtaining raw materials has become political. It effects business directly. As a corporation operating in today 's climate Stabucks has to use political
It also allows customers to pay with Apple Watch, a brand under Apple. These features keep Starbucks in touch with its conumers and the needs of the coffee drinking community. Having social media pages that invite criticism shows how stable and ready the company is. As a leader in the market, Starbucks has created a niche for being and innovative coffee company leaving others behind. Their handle on the use of technology for communication and marketing is proof of this. Based on this PEST Analysis, the external factors that affect Starbucks can be dmaging to a companies reputation, financies, and growth. Though Starbucks has mitigated each area of PEST with grace and ease, it took hard working and dedicated individuals working as a team to do so. Starbucks has never been shy about bringing in talent, new and old to mitigate risk. The reapearce of Howard Schultz, a once retired CEO, is evidence of this. His vision has never died and with his reemerngence as CEO Starbucks has been able to directly counter each factor that has come into its
The use of social media pages keeps the consumers updated on chanes to the brand or company. For instance, there is a significant change to the rewards program. It was announced on social media, it went viral and from there it made news. Starbucks never had to market the changes or spend any money ensuring consumers were aware of the changes. Technoolgy has saved money for Starbucks by lessening the marketing expedentures which was $306 million which was 3% less than 2014 (Starbucks Annual Report 2015, 2016). Social issues will always be a parto f major coporations however, Starbucks has shown through excellent leadership that they are ready to counter any attacks to their beliefs. They have mitigated the gun issue, the race issue, and signed the Fair Trade agreement. This stance on fair treatment and standing by their convictions has gotten Starbucks respect and new customers. Though many did not feel comfortable with the “Race Together” campaign, it was still a respected
In business, companies are able to control many of the factors that will improve or impair their business strategy, but some factors are beyond their control. These external factors are beyond the company’s ability to control. This external market environment consist of four primary areas: economic environment, technological environment, political and legal environment, and cultural and social environment (Perreault, Cannon, & McCarthy, 2015, p. 62). By performing a PEST Analysis each of these major areas can be explored.
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
The key to its success lies not only in the quality of its products but also the ability to differentiate itself from the competition. With Starbucks, it has always been about quality. The company manages stringent quality control measures for sourcing the finest coffee beans, roasting processes as well as customer service and ancillary products. Furthermore, differentiation is key to market control and Starbucks is unquestioningly the most differentiated specialized coffee brands in the world. From the design of its coffee shops to the music played to the types of products offered, everything has a touch of uniqueness.
Starbucks not only shapes a defined importance on its product, the coffee, but also the relationships on its partners, its customers and its shareholders to create diversity, “to create a place where each of us can be ourselves” (Starbucks Coffee), to treat all related partners with dignity and respect at the greatest corporate level. In this sense, Starbucks involves its customers, its neighbors and is shareholders to participate in the community to “be a force for positive action—bringing together [its] partners, customers, and the community to contribute every day (Starbucks Coffee).
...healthy environment, economy, or political state is left up to those who buy and distribute coffee. While the model that Starbucks follows to come by and sell their coffee may not be perfect it is at least a step in the right direction.
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
Business was good, but it was not without its problems. There was the political upheaval in the Middle East, followed by further tension after then CEO Howard Schultz commented on growing anti-Semitism in the region. Their integrity came under fire when certain Non-Governmental Organizations (NGO's) accused them of purchasing coffee beans under questionable social and economic conditions. These situations, together with difficult economic times globally, meant that Starbucks was likely going to take a hit somewhere. Eventually, they shut down their Israeli operations altogether.
... middle of paper ... ... Strategic planning kit for dummies, 2nd edition. Retrieved from http://www.dummies.com/how-to/content/strategic-planning-diversification.html “Starbucks”.
Starbucks, a coffee bean sales company did not have much of a marketing plan in place at its inception. Based in Seattle Washington the company began to sell coffee beans to espresso bars and upscale restaurants back in 1982. It took 11 years to progress to that level of production, they originally were a local store vendor at Pike Place Market. The director of marketing brought back the espresso bar idea from his travels in Milan. (Company Profile, 2015) The Pacific Northwest was filled with working class men and women that were drawn to the coffeehouse tradition brought in from Italy.
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
I will briefly summarize and examine issues facing Starbucks. Starting from there I will pick the most important issue and study it from different positions. In the end of my I will try to suggest what steps should be made to keep the company in continuing its quest to become one of the most recognized and respected brands in the world.
Millions of Americans these days depend on the glorious caffeine rich nectar provided to them daily by the local Starbucks chain store. With it’s humble roots firmly planted in Seattle Washington, this little coffee shop has turned from a novel idea, into a veritable necessity for Americans on the go. The amazing success of Starbucks can be attributed, in part, to tactical planning. It was through tactical planning that the management team behind Starbucks was able to be so wildly successful. By utilizing their strengths, and capitalizing on trends, as well as periodically evaluating weaknesses and threats, this little coffee joint has become America’s most enjoyable place to get coffee.
The strategic vision that Howard Schultz had for Starbucks was "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow". This s...
According to the Seattle Business Wire (as sited in Starbucks Coffee Company, 2015), the president and CEO of Starbucks, revealed to shareholders a vision for transforming the operation of his company in 2008 which involve the customer experience and reaffirm the company’s growth potential. He revealed that a five initiative strategy that he is directing the company towards will bring the company to a new level of quality (Starbucks Coffee Company, 2015).
A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector: