Pestle Analysis of Starbuck in Ukk

GMCR’s warns of the potential impact of the price of coffee on the gross profit margin. To combat this, GMCR had made a number of purchase commitments to ensure an adequate supply of coffee (GMCR Annual Report, 2010). The market price for coffee is impacted by numerous factors including weather, economy, and competition. It is vital that GMCR continue to take proactive measures to secure against unforeseen spikes in coffee prices. The price of coffee does not only impact GMCR’s ability produce coffee for the Keurig brewer under its namesake but impacts their partner suppliers as well. GMCR purchases coffee from brokers, farms, estates, and cooperative groups and essentially diversifies its coffee supply, reducing some supply risk (GMCR Annual Report, 2010).

Topic: An examination into the rise and fall of Starbucks Coffee Company and its relationship to certain microeconomic principles.

* Interest rates – An increase in interest rates in the USA would result in plans for investment and expansion being deterred by the Starbucks resulting in decreased productivity of the company. Furthermore, increased expenses for the consumers such as rising mortgage repayments would result in decreased availability of income to spend on luxurious products such as coffee. Low interest rates should have the

In our global economy, the price of coffee is thought of as elastic. What this means is that as the selling price of coffee increases or decreases, so does the demand for it. Simply put, coffee is not needed by humans to survive but rather is a luxury item, so as the price increases there is less of a demand for coffee and vice versa. Things that would be looked at as inelastic in our economy are staple products such as fuel, food, and water. These items are things that we believe we cannot do without and consumers will still purchase these items in spite of the price increases because without them they believe,

The economic worry about Starbucks is that, individuals in United Kingdom have genuinely high purchasing power and are very ready to use on the premium coffee that Starbucks offer yet then again individuals with low income are additionally changing to brands in light of the fact that they are giving coffee priced lower than Starbucks. The way to economic development is not simply the ease of generation, it is the worth added to the advancement, design, building brand identity, or the sheer impalpable or

The determinants of Starbucks profitability over time are variable costs and fixed costs. “A variable cost is a cost that change in direct proportion to a change in the level of activity (dict). Variable costs for Starbucks would include labor, coffee beans, dairy, and plastic products. A fixed cost is indirect costs of business expenses that remain unchanged (dict). Fixed costs for Starbucks include rent, taxes, and insurance as well as advertising. In the figure below (fig 1) we have Starbucks financial data in millions for the year of 2015. This includes their operating expenses, net revenues, such as company-operated stores, licensed stores, CPG, food service. It also includes their total net revenues and their balance sheet. As we can see “Operating costs dropped in the fiscal year

Hickory & Fry, in Denton, is a local favorite for inventive and satisfying tapas plates, which perfectly complement the modern and inviting décor. For a sharable and fresh starter option, enjoy the homemade guacamole dip served with crisp flatbread, celery and carrots, which is also ideal for sharing with your dining companions. Depending on your appetite, a tapas dish or two off of Hickory & Fry’s menu makes an excellent entrée. Popular tapas plates include the homemade meatballs coated in tangy marinara sauce, the cheeseburger tacos in tortilla shells with cheddar, tomatoes and pickles, roasted tomatoes stuffed with quinoa salad and the pupusa with homemade corn tortillas topped with chopped pork, cheese, beans and vegetables in a tangy sauce.

SWOT and Pestle analysis is a strategic analysis tool that feeds important information into the business strategy formulation process. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. SWOT is used to determine the current position of an organization. The first two components pertain to internal factors and the latter two concern external issues. Pestle (or PEST) is an acronym for Political, Economic, Social, Technical, Legal and Environmental analysis. Pestle is a tool for assessing the external context of an organization (Bee, 1998).

Assuming that the demand and supply for premium coffees are in equilibrium, the price will be at a constant, without significant pressure from the market. If Starbucks introduced the world to premium blends, this would cause a positive shift in the demand curve. There a higher equilibrium price and higher quantity when demand increases and supply remain unchanged. As prices increase, and the market moves to a new equilibrium, we will see higher wages, more advances and investments in technology and infrastructure, and greater competition. As production become more efficient and competition becomes greater, supply will increase and cause prices to settle back down. There are several factors that will impact the long-term equilibrium, such as changes in supply. For example, if a hard freeze eliminated Brazil’s premium coffee crop, this would cause a negative shift in the supply curve. Assuming demand remains constant a negative shift in the supply curve will cause quantity to decrease and equilibrium price to increase. Research shows that in 2011 a frost occurred in Brazil's southeastern coffee growing belt. Traders worried that next year's yields could be hurt. At the same time, heavy rains during harvest forced Columbia to reduce its crop estimate for 2011. Understanding the impact of problems along the supply chain and how the changes in supply

Starbucks is known for their Frappuccino’s; unfortunately they are on a downward spiral in sales due to competitors such as McDonalds. In 2008 Starbucks admits to its losses due to their competitors. “Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant’s missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills (Linn).”

The PESTLE analysis is used throughout a range of businesses. The acronym stands for political, economic, social, technological,

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

PESTLE is a memory helper which in its extended structure means P for Political, E for Investment, S for Social, T for Innovative, L for Legitimate and E for Natural. It gives an elevated perspective of the entire environment from numerous distinctive edges that one needs to check and keep a track of while examining on a certain thought/plan.

While assessing the external environment, there are different angles to consider. This makes it risky to diminish the concentration of the investigation to the external environment assessment that is influencing the Bang and Olufsen. To take care of this issue, PESTEL analysis can be conveyed, which will center consideration on political, economic, socio-cultural, technology, environmental and legal (PESTEL) qualities of the B and O's full-scale environment (Knight and Cavusgil 2004).

Raw Materials (Coffee Beans): Coffee bean farming is not vertically integrated into Starbucks; the company purchases coffee beans from farmers. Starbucks choose to outsource farming due to the low potential hold-up problem. For its coffee, Starbucks uses only high-quality Arabica beans, instead of regular commodity and lower quality robusta beans. Since there are a lot of market participants trading Arabica beans (i.e. farmers & Arabica beans buyers), there is an established market price. Moreover, farm land has a low degree of asset specificity, and therefore farmers’ investments do not depend only on Starbucks as