International Business



International Business

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International Business

Forces in Domestic and Global Environment that affect Starbucks

PESTLE Forces

PESTLE Forces are the sources that affect Starbucks and operations of the company domestically. But these forces also have impacts on the company on the global level in some ways. These forces are titled as;

Political Forces

Economic Forces

Social Forces

Technological Forces

Legal Forces

Environmental Forces

Political Forces

Political forces are the forces that are associated with U.S. politics and political policies. These forces can be found affecting the company more than any other force. The Forces that impact Starbucks and its overall business and operations are;

Inferences by government and other political bodies in the business operation of the Starbucks industry through incorporating new procedures and policies.

The presence and level of corruption in the area of business policies, practices, and laws and regulations.

The political policies and stability on the domestic or national level in the country with similar global laws.

New laws such as trade regulations and national level taxes impact the operations, strategies such as pricing strategy and other anti-trust and safety laws, etc. (Franke, 2017).

Introduction of new laws by the government body such as employee benefits laws, taxation, and wages legislation, etc.

Economic Forces

Economic Forces also have huge effects on Starbucks and its business operations and performance. Some of the major economic forces are;

Spending level of the nation and individuals on the national and international levels.

The economic system of the United States where Starbucks is mainly established.

The involvement of the government body in the shape of implementing new economic strategies in the Coffee market and industry.

Changes in the economic rates inside the country as well as inflation rate and changing rate of employment in and outside the country.

Quality and performance of infrastructure on the domestic level and changes in the associated plans (Mason, Cole, & Goza, 2017).

The level and rate of economic growth, variances in it, and changes in the interest rates all over the country.

Changes in the currency rate on the national and international levels.

Social Forces

Social Forces which have a huge impact on the Starbucks are but not only the following;

Demographics of the country and population as well as the skill level of individuals on a domestic and global level.

Societal hierarchy of the people and groups of individuals in the communities and societies. As well as standards of education, changing the power structure, and a varied class structure which make it difficult for the company to segment its target and other potential customers in the US and other markets (Franke, 2017).

Social conventions in the culture(s) of the United States as well as the role of gender or sex in other societies where Starbucks operates.

Entrepreneurial spirit and the level of its limitation in the people around the country. (This affects the company because entrepreneurship can lead to more competition for Starbucks at any level.)

Technological Forces

Technological factors are the factors that almost have the most direct effects on Starbucks. These Forces have an almost direct impact on the company and that is why the effects of the technological forces are considered as very huge (Franke, 2017). Hence some of the important and crucial forces that affect Starbucks the most are;

The development in the current technology that the company (Starbucks) uses for the production of coffee and other purposes as well as continuous changes in the technology.

Development of technologies used by the major competitors of the company such as Dunkin Donuts, and McDonald's, etc.

Advancement in technology in other countries such as China.

Transfer of technology to the coffee farmer in the country. (This is an opportunity for the company as well.)

Consistent effects of the newer technology in the costs, expenditures and value chain structure of Starbucks Coffee Company.

Legal Forces

Legal forces include laws and regulations which require the company to not violate laws and regulation in the home market and in other countries. Those forces include;

Legal regulations and business laws

Discrimination laws, copyright and patent laws and policies

Health and safety laws of consumers and employees of Starbucks.

Environmental Forces

Legal forces include all the forces that affect the company regarding how they operate and how they should be careful towards the environment and community/communities. These forces are mainly;

Environmental rules and regulations inside and outside America such as concern about social activities.

Different environmental disasters in the US and other regions of the world which produce coffee beans.

Climate changes, global warming, and environmental problem of national and global levels (Franke, 2017).

Additionally, there are some other forces as well which affect Starbucks both inside the US and on the global level. Those forces are mainly known as;

Customers

Owners/Shareholders

Suppliers and Creditors

Employees

Community

External Forces and How They Affect The Job of a Manager within Starbucks.

As the external environment of Starbucks is always seen continuously changing. Hence, the external forces that affect the company also affect the job of a manager in the company as well. There is a number of ways in which these forces affect the manager's job in Starbucks but some crucial ones are as follows.

The economic forces and changes in it requires the manager to manage the costs like production costs according to the changes in economic conditions so that the threats of financial losses can be neutralized.

Political and Legal forces affect the job of a manager in the way the manager should ensure the application of any new legal policy or law in the workplace as introduced by the state(s).

Social forces need the manager and his/her job to categorize and segment all of the potential customers as per the changes in their preferences, standards, and demographics with time so that the threat of losing potential customers can be managed (Huzzaifa, 2017).

Technological forces also affect the job of manager and allow the manager to utilize different opportunities to ensure the implementation and use of new technology to eliminate the threat of losing brand loyalty and products' quality (Mason, Cole, & Goza, 2017).

Environmental forces affect the manager's job in the way that the manager should not look at profitability only but should be concerned about social wellbeing. In this way, the company can be able to have more sales because every individual prefers to purchase products of a socially responsible company (opportunity utilization) (Huzzaifa, 2017).

References

Franke, M. (2017). Strategic Management Report - A Strategic Pathfinder for Starbucks. Slideshare.net. Retrieved 3 October 2019, from https://www.slideshare.net/MaxFranke1/strategic-management-report-a-strategic-pathfinder-for-starbucks-38656629

Huzzaifa, L. (2017). Internal and External Environment Factors that Influences Organizational Decision Making. iEduNote.com. Retrieved 12 November 2019, from https://iedunote.com/organizational-environment-elements

Mason, A., Cole, T., & Goza, N. (2017). STARBUCKS: A Case Study of Effective Management in the Coffee Industry. Journal of International Management Studies, 17(1).

Sangeeta, K., Piesse, J., & Webster, A. (2018). Female empowerment in emerging market firms (No. BAFES16). Department of Accounting, Finance & Economic, Bournemouth University.