The specific and general external environmental factors
Describing the general external environmental factors of starbucks,
1. Political factors:
The company has affected by some major political factors such as the policy of raw material
sourcing. Government has implement an order to Starbucks to get involved in the raw
material sourcing process. If Starbucks deny this, then a huge political pressure can be
occurred. This got solved. Then the company suffered another political problem. People
called out a boycott program against Starbucks for allowing customers in their selling point
while carrying a loaded weapon.
2. Economical factors:
People`s purchasing power(PPP) is the main determining factor of the economical situation
of any country. When the great economical depression occurred worldwide in 2010, the
company suffered a major economical crisis. The PPP. Has dropped a huge level that caused
a big loss for the company. Then it shuts down many stores around the globe and fired
several employees. Another economical blow the company suffered from the exchange rate
of dollars that happened in 2016 when the value of US dollar raised making the company
less profitable.(Starbucks,2016)
3. Social factors:
The culture of west influenced heavily on behalf of Starbucks. the coffee culture became a
dominant culture worldwide and internet makes it more easy. Their consumers grew
rapidly. Thus they became very popular. On the other hand, consumer`s change of habit
makes a disturbance on the pattern of their work. They needed to recheck their strategy.
4. Technological:
Technology influenced a lot to their business. They adopted a new strategy what gave them
a technological advantage over their competitors. They adopted ecommerce based policy
to enhance their business. In 2009 they launched a mobile based application where
customers can order any of its products from anywhere worldwide. In 2010 Starbucks being
rewarded as the top liked brand in social media.(Rothaermel,2015)
Describing the specific external factors of Starbucks,
1. Customers:
Customers are the vital factor of an organization`s existence. Starbucks delivers
interpersonal assistance to the customers. Due to continuous uncertainty of customers
behavioural changes Starbucks offers numerous options to them. They offer over 30
different blends and single based coffees. Also they are available to share their
merchandise, fresh foods, other products in the company`s portfolios. Starbucks
approaches different formula for some products to befit the tastes and choices of its
customers in different markets. (Patterson & uncles, 2010)
2. Suppliers:
Being the biggest importer of coffee beans, Starbucks faces challenges from the side of
suppliers. Hence there is no alternative for coffee beans available in market and the
company is dedicated to the quality of it`s products, resulted an advantage for the suppliers
over [Link] the company announces a guideline for the suppliers in
2001([Link]). In 2005, Starbucks waged 23% of more the existed market price for
the beans conditioning them to maintain the rules and regulations of buying.(The fair trade
certifiedTM coffee). Thus Starbucks faces the challenges of suppliers with its balanced
approach.
3. Competitors:
There are two major competitors of Starbucks in the market named mc café and Dunkin
donuts. Mc café maintains a comparably lower price to attract the budget consumers
(Burritt, 2007). And Dunkin donuts offers varieties of flavours of coffee to choose (Dicarlo,
2004). Except these two there are also some medium and small competitors posing real
challenges to Starbucks.
4. Public pressure groups:
Public pressure groups also deter some threats to Starbucks. to minimize the threat, the
company works with various communities, giving donations to charities, issues health
incentives to its staffs, giving incentives to the farmers, introduced environment friendly
paper cups. Thus the company meets the challenges posed by the various pressure groups.
(Robbins, S, Coulter & kilfoil. Management,2012)
1. Starbucks (2016) About us (online) available at [Link] last
accessed on 1/11/2016.
2. Rothaermel, F. T. (2015). marketing management. McGraw-Hill. P. 15-30
3.
4. [Link]
5.
6. Stephen P. Robbins , Mary Coulter , Mary Kilfoil, management (2012), boston & prentice
hall.
