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Starbucks Pestel Analysis

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The business organisations are open system and they will affect by the changing of external environment, it not only brings risks and limitations to them, but also give opportunities to the organisations. The changing from input to conversion process and then to output, at last, to influent the firms whether achieve their goals. For all organisations, a small difference in external environment will make a big influencing to their developing process, such as government policy, economic growth trend.  These factors are named as PESTEL (Political, Economic, Social, Technological, Environment, Legal).These factors also will influence in themself,for example,few months ago,America’s president,Donald John Trump against China by a trade war.America increased tax rate for an-ti dumping the import from China.Then aim to this situation,Chinese government deduce the exchange rate of RMB to sitimulate export good made in China.Form this case,change in policy and legal leading to the economic environment changed.So,these are worked together to conduct a external environment for the business orgnisations.

The definition of PESTEL


This is a kind of government action to help to improve business running environment.Governments use the ways to operate their own market and try to get a best result for themself.For example,Irish government offer a good tax rate of company for attracting more business organisation coming into Ireland,and create the income of tax.

  1. Economic:

Economic in here means a basic business environment of local or a business group or all around world,its changing has a huge influence for business operating.For instant,the exchange rate of euro decrease will stimulate export of the countries in Eurozone increasing.


This relate local culture and the living behavior of population to how these impact on organisations achieving their objectives.The business organisations must be follow the cultures and to make the plan of strategies.Such as Beijing chicken warp in KFC China and Breakfast flavor burger in KFC Ireland.

  1. Technological:

Changes in technology that affect ways of working or the types of products and services demanded.Technique is very important for kinds of business,especially in productive enterprises.,if a organization get a technique,it might hold a part of market.For example,IOS,the running system of iphone,it update around once per year and use in a model of iphone which is the newest.Due to technology problem,when people can not update their phone, they will buy a new one.Some people does not want to change the system to use and keep it.


Protecting environment become more and more urgent by development of the society.We always focus on how to reduce pollution of the earth and to find some new kinds of energy that they are cleaner than now.Governments encourage people use public transport instead driving the cars,this can decrease energy consumption,and then deduct producing CO2.

  1. Legal:  

Legal issue by government and to try keep the environment health and stable. Different areas have their own policy, all business should follow local laws and regulations,such as competition law ,employment and safety law,and product safety issues.For example,due to the law of labour that employers should pay to employees minimum wage,if not staffs have rights to sue their boss to obtain the lowest level of wages.(Mullins 2007)

Case study analysis

Starbucks is an American coffee company which was founded in Seattle,Washington in 1971.It is a oversea trade business,with more than 28,000 coffee shops and at the year end of 2016,the company had more than 238,000 full and part time partners around world.This company have been faced of different cultures and local environments.

From this case,this is linking with few factors of external environment,but not all of these.I will put some examples to identify the rest of factors how to impact Starbucks development.

For Political

Nowadays,Starbucks Co become more and more powerful.The directors of this company thought they might can impact on issuing the regulations,such as reducing trade barriers,medical cost and tax breaks.

Some relevant policies will influence Starbucks significant.For example, Starbucks offers the employees(full-time)a business medical insurance that this insurance can submit an major expense for the employee’s medical costs.That is very helpful to them to save a big amount of money to improve their life.If government could issue a policy relevant deduct expenses of medical treatment,Starbucks Co could save the money to help more people,such as donating a school in coffee-growing areas and offering a loan to coffee farmers to building their homes.It is like a cycle that good influence will keep to generate good results.

For Economic

Starbucks Co is a American company,its main raw materials of coffee beans are import from others places,such as South America,Latin America and southern of China as only the closed the equator and specific altitude and weather can harvest high quality’s coffee beans.Even though the sub-brand,Tazo Tea,also needs to import raw materials from other countries.There has a risk of currency exchange rates fluctuate,this might impact on the cost of products.And this also relate with others production overheads,such as transport costs and energy costs.Starbucks with the local coffee farmers have a long-term contract and offer their a loans to improve their home and local education.And this company claim they do a fair trade to the local farmers.Because the loans offered by Starbucks Co,when local repayments take place that can against the part of their costs.

For Social

Starbucks Co have been traded around world and each country and territory is different,not even just culture and language.The company needs to adapt local environment and find what is people’s love.

As we know,Starbucks has their own brands and the kinds of drink,for example, Frappuccino coffee drinks,this is a kind of famous drink in the global,almost every one knows this. Frappuccinos have coffee base and cream base(without coffee).The coffee base is for the people they love the coffee tasty or who like the one kind of hot coffee drink.The production department gives customers more choices to adapt their way.It’s meaning the company never missed goodwill for the part of products.Also,Starbucks Co will push out new products in accordance with the local culture.For example,Starbucks China has few new drinks ,desserts and others products this year for Christmas.These productions are mix the Chinese elements which whatever from packaging or flavour that try to attract the customers in China.Compare with Starbucks Ireland,the advertising is simpler than in China.In Ireland,the company aim to building image and reputation.Starbucks Ireland’s website show more ethical sourcing than their products.(Image1-3,Web 1-2)



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