STARBUCKS
Coffee Company
“We changed the way people live their lives, what they do when
they get up in the morning, how they reward themselves, and
where they meet”. (Orin Smith, Ex Starbucks Ceo)
About
Starbucks
Starbucks is a big coffee company with more
than 30,000 stores in almost 80 countries. It
started as a small place selling coffee beans and
grew to become the biggest coffee chain
globally. This has changed how people think
about coffee and raised concerns about how it
affects local cultures and businesses. As
Starbucks continues to rise,
it's not just a coffee brand anymore; it's a
powerful global influence that's making a
lasting impact on societies around the world.
More Info
History
1971 1987 1992 2011
• Started selling coffee • Added handcrafted • Became a publicly traded • Marked 40 years in
beans in Seattle’s Pike espresso beverages to the company serving happiness
Place Market menu
Globalization
Starbucks' successful expansion in America demonstrated global
potential, starting with growth in the United States and Canada.
Following their public offering, the company expanded globally,
making strategic advances in Saudi, Canada, China, Japan, Taiwan,
Britain, and continental Europe, consistently innovating to stay
ahead in these promising markets.
P E S
Political Economical Social
T L E
Technological Legal Environmental
POLTICAL
Political stability Trade policies Tax policies
One important Starbucks imports coffee Starbucks has operations in
consideration is the political beans from several nations. several nations, each with
stability of the nations Modifications to trade laws, unique tax laws and rates.
where Starbucks operates. including tariffs, quotas, and Starbucks' financial
While political upheaval can regulations, may have an performance may be
result in supply chain effect on the cost and directly impacted by
disruptions, higher prices, profitability of the company changes in sales tax,
and even the loss of by influencing the supply corporation tax rates, or
companies, stable political and pricing of coffee beans other taxes
situations guarantee a good
economic climate
Employment laws Health and safety regulations: Political lobbying and advocacy
Starbucks must abide by Starbucks is required to Starbucks advocates and
labor laws and regulations abide by the food safety and engages in political lobbying
in every nation in which it hygiene regulations in each to influence laws and
conducts business as a nation. This covers laws policies that have an effect
global company. This covers governing the procurement, on its company. This
things like working hours, preservation, and involves promoting
the minimum salary, and preparation of ingredients. corporate social
employee rights. These laws Sustaining client confidence responsibility (CSR)
may have an effect on and brand reputation programs such as fair trade,
general operations, requires adherence to these sustainable farming
employee relations, and standards. methods, and others.
labor expenses
International relations
International politics,
including trade conflicts,
geopolitical difficulties, and
diplomatic ties between
nations, can have an impact
on Starbucks' operations.
This may affect the
business's ability to enter
new markets, expand
overall, and manage its
supply chain.
“Following a pro-Israeli tweet from its labor union, Starbucks
was accused of backing Israel. As a result, the company lost 11
billion in market value and saw a significant decline in sales.”
Economical
“Economical conditions of a country
are directly linked to the business of
a company”
Economic Factors
1. Global Economic Recession:
The ongoing global economic recession has significantly impacted Starbucks since the Covid-19 outbreak in 2020. As consumers
shifted to cheaper alternatives due to a decrease in purchasing power.
2. Rising Labor charges and increase in cost of raw materials:
Due to an inflationary environment, Starbucks faces challenges from increasing labor and operational costs. The cost of raw materials also get
affected by international transport increase rates. Which in this case are affected by international conflicts.
3. Currency Exchange Rates:
Fluctuations in local currency exchange rates affect Starbucks' revenue and profitability in international markets. Managing foreign
exchange risk is crucial for minimizing the impact of currency fluctuations and maintaining financial stability across global operations.
4. Economic Growth in Operating Countries:
The overall economic conditions in countries where Starbucks operates directly influence its sales and profitability. Most of developing
countries are emerging Economies It can be a good sign for the business of the company .
5. Inflation Rates and Input Costs:
High inflation can affect Starbucks' input costs, pricing strategies, and [Link] impact of rising costs of raw materials, such as
coffee beans, is crucial. It may affect the following year financial strategies, the company objectives and employe development.
SOCIAL
• “S” stands for Social factors. It allows a
company to form an impression of the
factors that might impact a new business or
industry.
SOCIAL ANALYSIS
• Starbucks is known for • Starbucks ensure an • Starbucks is heavily influenced
its Quality and exceptional customer by societal trends. The growing
specialized coffee. experience by connecting focus on health and wellness
Starbucks focus on with their customers in has led to the demand for
partner development by culturally relevant way. healthier beverage options,
raising their knowledge For instance- Since 2005, which the company has
and engaging their The Starbucks included into its menu.
Foundation has invested Changing demographics and
customers and partners
more than $25 million in lifestyles impact consumer
in a unique preference programs that strengthen priorities. Starbucks has
and satisfaction. coffee and tea-growing adapted by offering a variety of
communities. beverages and snacks to cater
to diverse tastes.
Technological
Technological advancements have great impact on Starbucks,
transforming how coffee is produced, served and ultimately
enhancing the overall customer experience.
The emergence of mobile The company gets more profit
applications has enabled because of the easy
Starbucks to provide efficient availability of good quality The increasing technological
ordering system that allows coffee machines in the aids have great impact on
customers to order and pay market. Starbucks as, customers
for their drinks from home. It enhance their demand with
helps to reduce waiting time seeing more and more aids on
and also improve customer social media.
satisfaction.
Technological
factors
LEGAL
Legal factors are external factors which refer to how the law
affects the way businesses operate and customers behave.
Product transportation, Import/Export law,
Discrimination law by legal factors.
Starbucks ensures adherence to diverse global legal requirements, navigating regulatory
frameworks across its vast network.
The company prioritizes ethical conduct, addressing legal challenges promptly and
transparently.
Starbucks actively manages intellectual property rights to protect its brand and
innovations.
Starbucks complies with labor regulations worldwide, fostering a fair and inclusive
work environment.
The company handles contractual matters efficiently, resolving disputes to maintain
positive business relationships (George, 2023).
Factors that affect starbucks
-Recycling requirement
Outline how recycling practices should be implemented within business operations, as the
government aims to reduce waste and help the environment. Starbucks serves as an example,
having launched recycling initiatives in select stores in Seattle and announced plans in
Starbucks Korea to reduce its carbon footprint by 30%. This involves eliminating single-use
cups from all stores by 2025
-Consumer law
Consumer protection laws aim to protect customers' rights and interests when dealing with
businesses. These laws focus on preventing fraud, ensuring fair treatment, and maintaining
transparent marketplace processes. Starbucks has faced legal challenges due to alleged failures
to comply with consumer laws, particularly related to "ethical" sourcing claims. Consumers are
suing the company in response to these concerns.
-Compliance with Law and Regulations
Starbucks is committed to full compliance with the laws, rules and regulations of the countries
in which it operates.
Environmental
The business environment in which Starbucks operates is a very
crucial one.
Starbucks has been in the coffee business for over 5 decades and
has since then developed itself to meet environmental set
standard and face challenges that has to do with the
environment to be sustainable and face its competitors. Since
Starbucks sources its coffee beans directly from the farmers
Starbucks also has set standards to be able to make sure that
they get the best quality coffee beans and still try to be
environmentally sustainable.
There are six factors for business survival for the purpose of the study will be looking at the
factors that border around the environment and how it has helped its business and achieve
goals and objectives
Ethical Sourcing of Coffee
Industry Set Standard (Starbucks 2020)
Reduction of Green House Gas
Open Source Agro-economy approach
Protecting and restoring forest
Creating a beautiful customer environment
•Starbucks run its operations through the means of
ethical sourcing coffee and farmers equity (CAFÉ), this
is one of its First Industry Ethical Standard (Starbucks
2020).
•This helps Starbuck source its product from farmers
that uphold good and safe environmental and social
growing practices. This helps Starbucks get quality
products, meet customer needs and sustain the
environment.
•In Line with The First Industry Set
Standard of the company (Starbucks
2020), It helps promote the best
agricultural practices by checking
water quality, soil testing, preserve
bio diversity, reduce Agro-chemical
use, preserve energy and conserve it.
In support to be better the
environment, Starbucks is focusing
on its carbon and water footprints.
This is referred by the company as
“The first ten feet” (farm to port).
Starbucks has a strategy or approach called the Open Source Agro-ecomoy approach
The company provides farmers with precision agronomy tools through support centres. It elightens its farmers on the nutrient to boost
farm productivity and discourage so much use of fertilizer which will decrease carbon emission from their farms. Here, the company also
shares its seedling all over the world. This helps farmers adapt to climate changes.
Potecting and restoring the forest in key coffee areas
Deforestation are the biggest climate challenges facing the coffee industry. Here,
Starbucks partner with conservation international for forest and landscape
protection and restoration programs.
Starbucks create a very beautiful customer environment.
Their shops outlets are beautifully crafted to suit the norms and traditions of the
customers.
The Starbucks in Asian countries are unique to their culture as is crafted
differently in Europe and America.
Starbucks is also sensetive to customer feedbacks by doing so creates a good
relationship between itself and its customers creating a business environment.
Starbucks has a good employee benefits such as health coverage, paid time off,
education/student loans, parental leave, good retirement plan, good salary, equity
reward program and programs such as starbuck saving by so doing creates a very
good working environment for the employees which will automatically have a
poistive effect on productivity.
CONCLUSION: In conclusion, Starbucks has broad and different
strategies in which its stays successful in business, it
dominates the coffee industry through its strong competitive
advantages and has a strong global presence. It will continue
to dominate the coffee industry if its sticks to its company set
strategies and achieve its strategic goals.
Thank you
Done by :
-Q1057060 Montaha Musa
-Q1053758 Bisma Mirzankar
-Q1044063 Aryan Verma
-Q1045134 Fahad Hafez
-Q1052132 Taranpreet kaur
-Q1048312 Ntibibuka David
-Q1060489 Radhika sharma
References
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per cups for recycling.
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-Razak, A. and Pardhasaradhi, S., 2021. Strategic Management Tools: Text & Cases. Readworthy Publications.
George, A.R., 2023. A Cooperative Business Analysis of Starbucks Corporation & Reflection by Principal Financial
Investigator.