Starbucks Coffee Company Analysis Essay Example | Topics and Well Written Essays - 3000 words

Starbucks Coffee Company Analysis - Essay Example Starbucks Corporation is a US based company and is engaged in the business of purchasing and roasting whole coffee beans. It is regarded to be one of the premier brands of speciality coffee retailing in the world and operates its business in more than 50 countries of the world. Starbucks is headquartered at Seattle, Washington and was founded in the year 1971 (Yahoo Finance, 2012a). Its stocks are traded on NASDAQ Global Select Market with the ticker symbol â€Å"SBUX†. Starbucks is one of the fortune 500 companies of the world and has been ranked 229th in the fortune 500 list for the year 2012 (CNN Money, 2012). For the fiscal year ended October 2011, the US segment accounted for around 69% of the total revenues generated by the company (Starbucks Corporation, 2012). The revenues are generated in United States mainly through the licensed stores and company operated stores run by the company all over the country. Starbucks mainly operates its business in the speciality eaterie s industrial segment of US economy and has a market capitalisation of around $34.9 billion (Yahoo Finance, 2012b). ... Various strategic analysis tools like PESTEL, Porter’s Five Forces, etc. would be utilised to attain the objectives of this study. TASK A – Market Environment Analysis PESTEL Analysis PESTEL is an external environmental analysis tool, which is used for analysing the political, social, technological, economical, legal and environmental factors associated with an organisation like Starbucks (Henry, 2008, p.51). PESTEL analysis is particularly useful in analysing the macro environment associated with a business organisation. The PESTEL analysis of Starbucks (Appendix - 1) with respect to its US business segment is presented below: 1. Political Factors: Political factors do have some impact in the speciality coffee industry of United States because the green coffee beans are actually needed to be imported from other countries that are characterised of having tropical climate which is needed to grow coffee. Hence, if the trade relations that exist between US and the supplier country get deteriorated then this industry could have a negative impact on it. 2. Economical Factors: The recent economic downturn in US economy because of the Global Financial Crisis (GFC) is having a significant negative impact on the speciality coffee industry. Speciality coffee is generally considered to be a luxury good. Hence with the decrease in income levels of consumers in US, they tend to switch over to other lower cost substitutes available to them. Moreover the increasing prices of the commodities in the market are also having an adverse impact on this industry. 3. Social Factors: Social trends are also observed to have a significant impact on the speciality coffee industry in the United States. The coffee culture has evolved in the