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Analysis of the strategy and business performance of Starbucks Coffee UK.

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Introduction

221 BSS Coursework Business Management This report will analysis the strategy and business performance in the retail food sector, the company I will be analyzing is Starbucks Coffee UK, using the PESTEL. Starbucks is a multinational coffee and coffeehouse chain based in the USA. It is the largest coffeehouse company in the world. Starbucks was founded in 1970, with the first store opening that year in USA. In 1982 Howard Schultz joined the company, later going on to be the Chairman, CEO and President of the company. The first UK store of Starbucks opened in 1998. In 2007, there were 15,011 Starbucks outlets in 42 countries, 6,793 of these being in the US. Additionally Starbucks was voted one of the top ten UK workplaces in the Financial Times 2007. In the future Starbucks aim's to operate over 40,000 outlets worldwide. The PESTEL framework gives broad list of influences on the likely success or failure of particular strategies. It is important to analyse how environmental influences are effecting an organization in the present and in the future. The PESTEL analysis is used as it sufficiently can be used to understand and identify the important factors that Starbucks must consider in all areas of the business and industry. ...read more.

Middle

Thus low interest rates will have the opposite effect. * Globalisation - farmers of the bean now earn less then they did in the past. The low income and labour intensive method means that there is a decrease in the number of people willing to do it for a living, in turn a decrease in the coffee produced, thus resulting in a drop in the supply of coffee to Starbucks and profits. Social * Location - The transport and easy access for both customers and staff is important. Easy access such as online store located is vital in order for customers to visit and show an interest. * Age Distribution - The average age of the world population is getting older and birth rates are constantly evolving. At present the market that Starbucks is targeting is mainly young people, however these views may change in the future as the market for young people decreases. In order to increase their profits in the future, they must widen their target market, but not loosing the interest from present customers. * Income Distribution - Where income is distributed is important, it is important for Starbucks to investigate this as it gives the idea of where to aim their marketing or to locate to their stores. ...read more.

Conclusion

From looking at the PESTEL analysis it can be seen that Starbucks is a strong brand, and this strength of the brand is an important factor in the future of the company. The PESTEL analysis is mainly used to assess the future impact of environmental issues that may occur. However it only deals with the external business environment, additionally another limitation is that these environmental influences that have been expressed may be important to one company, but in turn may not be as important to another. Often it can be seen when analysing the issues using the PESTEL analysis it can be seen a merely listing al the external influences as opposed to was in which the company can improve or the strengths of the company. For the environmental analysis to be more accurate it is important for the company to monitor and focus on the factors that most influence the industry. 1636972 221 BSS Business Management Coursework 2 : Individual Report Referances: Chambers I, (1997), Business Studies, Casueway Press Johnson G, Scholes & Whittington, (2005), Exploring Corporate Strategy, FT Prentice Hall Mullins L.J, (2004), Management and Organizational Behaviour, FT Publishing http://en.wikipedia.org/wiki/Starbucks http://www.starbucks.co.uk/en-GB/_About+Starbucks/ http://en.wikipedia.org/wiki/Deregulation http://www.ico.org/show_document.asp?id=1340 http://www.countercurrents.org/glo-frank050104.htm http://news.bbc.co.uk/1/hi/business/3204523.stm 1636972 Coursework 2 221 BSS ...read more.

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