PESTLE Analysis of Starbucks
The macroeconomic environment that Starbucks operates in is characterized by the ongoing global economic recession, which has dented the purchasing power of the consumers. However, market research done in the last few months has indicated that consumers have not cut down on their coffee consumption and instead, are shifting to lower priced options. This means that Starbucks can still leverage the buying power of the consumers in a manner that would give it a significant advantage over its rivals by offering cheaper alternatives. Apart from this, Starbucks has already made some moves to jump on the emerging mobile computing revolution by tying up with Apple to introduce discounted coupons in the apps used in the iPhones. Further, this exercise has also been accompanied by co-branding and cross selling which means, that Starbucks is well placed and poised to reap the benefits of the Smartphone revolution. Having said that, it must be noted that consumers in the United States are increasingly turning Ethical Chic which means that the products they buy and the brands they consume need to prove that they are following social and environmental norms in their manufacture. This is the key challenge that Starbucks faces as it confronts the emerging challenges of the new era of consumer awareness and the galloping Smartphone revolution.
The preceding analysis proves the point that Starbucks is operating in a relatively stable external environment. The main reason for this is the fact that it operates in the Food and Beverages space which means that despite the recession, consumers cut down on the consumption to a certain extent and not completely. Therefore, the task before Starbucks is to lower costs and increase the value so that it retains its consumer base and attracts consumer loyalty.
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