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MICRO&MACROENVIRONMENTAL FACTORS
MIRELA GROSU | MARKETING | 10.10.2016
Introduction
1.1 History of Starbucks Coffee Company
Starbucks Company has been referred to as a global coffee enterprise as well as a coffee
house chain located in Seattle, Washington. Starbucks have been nominated as one of the
largest coffee houses all over the globe. It has approximately 21,000 + stores located in 61
countries all over the world. Some of the relevant figures regarding the same are 14,000
stores in United States, 1,300 in Canada, 1,000 in Japan, 500 in South Korea, 800 in United
Kingdom, 750 in China, 300 in Taiwan, 350 in Mexico & 170 in Thailand.
The very first store of Starbucks coffee houses was opened in Seattle Washington in the
year 1971. This store was opened by three partners i.e. Bowker, Baldwin & Siegl. These
three partners were inspired by one of the leading coffee entrepreneur namely Alfred Peet.
Alfred Peet was dealing with high end coffee equipments & coffee beans. The initial years of
Starbucks i.e. 1971 1976 were accomplished at 2000 Western Avenue & soon shifted to
1912 Pike Place. Initially the company sold only roasted coffee & did not start the brewing
process due to lack of equipments etc. In the first year, Starbucks purchased green coffee
beans from Peet & then started to buy the same directly from the growers (Starbucks
Corporation, 2012).
1.2 Market position
Starbucks has been referred to as one of the largest coffeehouses within the coffee market.
Starbucks is a single coffee shop that does not has a single direct competitor. Its closest
competitor is Caribou coffee house with less than 5% number of stores as compared to more
than 11,000 stores of Starbucks situated in United States. Starbucks hold a dominant
position within coffeehouse market (Starbucks Corporation, 2012).
1.3 Market strategy
In order to attain high levels of success every enterprise needs to adopt
some marketingstrategy. Same way, Starbucks opted for various marketing strategies which
would help to expand & grab one of the highest shares within the brewery industry. Some of
the strategies opted by Starbucks were to buy the competitors leases, intentionally operate
under losses & make its presence felt in several locations. For example, Starbucks took its
first mover advantage in the UK market by buying the Seattle Coffee House but after
sometime they realized opening of stores at such prime locations have led to financial loss
(Starbucks
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Political Aspect: The first factor which shall be kept in mind while studying the macro
environment of Starbucks is the political aspect. It has been seen that, Starbucks has
significant levels of presence in the coffee market. Starbucks consists of various types of
products for government offices, corporate offices, etc. In the year 2011, Seattle Coffee has
been reported a growth double digit. It shall be taken into consideration that, the volume of
growth in the overall coffee market has declined by 2.5% whereas the volume at which
Starbucks has increased is by more than 12% (Schrage, 2004).
Economic Aspect: The second factor to be kept in mind while studying the macro
environment of Starbucks is the economic aspect. For the financial year 2010 & 2011, the
leading coffee retailer closed approximately 70 company operated stores all across the
globe. United States (US) has been referred to as one of the largest contributor of coffee;
closure of the stores in the recent past has led to a decrease in the overall profits earned by
the same (Schrage, 2004).
Social Factor: The third factor which shall be kept in mind while evaluating the macro
environment for Starbucks refers to the social factor. Lately, Starbucks have been reported
with increased instances of product recalls. In the year 2011, the department of Agriculture
Food Safety inspected Listeria bacteria in the chicken to be used at Starbucks. In order to be
on the safer side, the Department of Food & Safety recalled all the Chicken Chipotle Wraps
and Chicken Hummus boxed meals(Schrage, 2004).
Technological Factor: The fourth factor which shall be kept in mind while evaluating the
macro environment for Starbucks refers to the technological aspect. Starbucks being one of
the reputed coffee houses had a robust distribution strategy which helped them to stay ahead
of the competition. In the recent years, Starbucks had opted for various types of distribution
strategies in order to reach maximum number of customer in a stipulated time frame
(Schrage, 2004). The company has been trying to opt for various technological
advancements such as use internet & the mobile applications. Starbucks launched a mobile
payment system. This technological advancement helped the customers to pay while sitting
at the store with the help of their smart phones. In the later years, Starbucks also launched a
i-phone mobile payment application. With this application, the customers would be able to
have an access of their favorite Starbucks card application. With the use of various
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technologies, the organization was not only masses but also offered a convenient way of
dealing with the transactions. The use of technology will help the enterprise to break through
the various distribution channels & be a step ahead of its immediate competitors.
constant
global
economic
recession
has
dented
the
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The main political factor is about sourcing the raw materials. This
has gathered a lot of the attention from politicians in the West and
from the source countries. For this reason, the company wants to
adhere to social and environmental norms. It is willing to follow the
sourcing strategies. It gives importance to fair trade practices.
Another
impact
is
the
need
to follow
the
laws
and
Tax policy
Employment laws
Taxation level
Consumer preferences
Biotechnological developments
Developments in agriculture
Many
Starbucks
business
practices
concern
activists
and
beans
Global warming and other environmental issues in a
global level
IMPACTS OF LEGAL FACTORS ON STARBUCKS
Starbucks must ensure that it does not violate any laws and
regulations in the home market and countries from where they buy
raw materials.
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