Essay on Assign 1

2837 Words Feb 1st, 2016 12 Pages
Carlos Monsanto

Assignment No. 1

CS 782

1) Business Model

Starbucks Corporation, an American company founded in 1971 in Seattle, WA, is a premier roaster, marketer and retailer of specialty coffee around world. Starbucks has about 182,000 employees across 19,767 company operated & licensed stores in 62 countries. Their product mix includes roasted and handcrafted highquality/ premium priced coffees, tea, a variety of fresh food items and other beverages. They also sell a variety of coffee and tea products and license their trademarks through other channels such as licensed stores, grocery and national foodservice accounts.1 Starbucks also markets its products mix with other brand names within its portfolio of companies,
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taking the rest.

2) PEST Analysis.3

2.1) Impacts of Political Factors on Starbucks

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 regulations in the countries from where Starbucks buys the raw materials. Activism and increased political awareness in developing countries have made his essential.

The regulatory pressures within the home market in the US are also a factor. Multinationals based in the US are now subject to greater scrutiny of the business processes. The company must monitor political stability within the country as well.

Some other factors to consider are:

* Tax policy * Employment laws 2.2) Impacts of Economic Factors on Starbucks

The ongoing global economic recession is the prime external economic driver for Starbucks. As I already mentioned, this factor dented the profitability of Starbucks. This has convinced buyers to shift to cheaper alternatives. As they did not quit buying coffee, Starbucks should seek an opportunity here.

The company has to deal with rising labor and operational costs. The inflationary environment and

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