Monday, June 3, 2019

The Political Economic Social Cultural And Technological Environment Marketing Essay

The Political Economic Social Cultural And Technological Environment Marketing assayIt is smasheding(a) for these reasons By making effective spend of PEST Analysis, you ensure that what you argon doing is aligned positively with the forces of change that are affecting our human. By taking advantage of change, you are much more than likely to be triple-crown than if your activities oppose it.Good map of PEST Analysis helps you avoid taking pop off on that is condemned to failure for reasons beyond your control.PEST is useful when you st artwork operating in a virgin country or region. Use of PEST Analysis helps you divide free of unconscious assumptions, and helps you quickly adapt to the realities of the new environment.(http//www.mindtools.com/pages/article/newTMC_09.htm)Our mission to inspire and nurture the human spirit unrivalled and only(a) person, one cup and one neighborhood at a time.Starbucks Objective to establish Starbucks as the to the highest degree re cognized and respected brand in the world. seam Ethics and Compliance is a program that supports Our Starbucks Mission and helps protect our culture and our reputation by providing resources that help partners make ethical decisions at clip.The program develops and distri thoes awareness materials, including theStandards of Business Conduct facilitates effective compliance and ethics training investigates sensitive issues such as potential conflicts of interest and provides additional channels for partners to voice concerns. Partners are encouraged to report all in all types of issues or concerns to the program through their choice of the offeredcommunication channels.PESTLE stands forPolitical The current and potential influences from political pressuresEconomic The local, national and world economy restoreSocial The ways in which changes in society affect usTechnological How new and emerging technology affects our business?Legal How local, national and world legislation a ffects usEnvironmental The local, national and world environmental issuesThe PESTLE analysis provide be used to identify and understand the important factors Starbucks must(prenominal) consider in all areas of the business.Political* Taxation policy high taxation imposed on farmers in those countries producing the hot chocolate bean lead commonly mean Starbucks pay a higher price for the coffee theypurchase. Any fluctuations in taxation levels in the industry are almost certainly at wide last passed on to the consumer. Recently (June 13, 2003) Tanzanias Minister ofFinance harmonized and rationalized local government taxation to boost ruralproductivity of the coffee bean. Tax was lowered for these comminuted holder farmers and this saving will have been passed on to purchasers of coffee like Starbucks.* Deregulation A decade ago, the USA pulled out of the ICA ( internationalistic Coffee Agreement) that set merchandise quotas for producing nations and kept the price of cof fee fairly stable. Coffee quotas and price controls ended. Since the deregulation farmer shave suffered and their earnings have dropped. Many have struggled to make a living so have given up.* International trade regulations/tariffs Trade issues will affect Starbuckspredominantly when exporting and importing goods. When another countrys government imposes a tariff it not only consequents in an efficiency loss for Starbucks but whacking income transfers can become inconsistent with equity. This extra charge can crack a bargain into a rip-off. Also, since 9/11, trade relations have been adversely impactbetween the USA and some other countries.* Government constancy Starbucks should thoroughly investigate the political stability of any country they plan to expand to. Changes in government can lead to changes in taxation and legislation. The coming(a) American elections whitethorn have an effect on Starbucks as new legislation or new or existing government may take on in taxes . Also, those countries in political turmoil or civil war (e.g. Zimbabwe at yield) should be approached with great caution when considering new ventures.* International stability The international economy must be brought into consideration as it can affect Starbucks sales and markets. The aftermath of 9/11 was an example of an sparing downturn that affected the world market. If the world market is in a slump it is not usually the ideal time for a business to look at fantastic expansion.* Employment law A reduction in licensing and permit costs in those countriesproducing the coffee bean for Starbucks would lower production costs for farmers. This saving would in turn be passed on to the purchaser.Economic* Interest order A rise in interest rates means investment and expansion plans are put-off resulting in falling sales for Starbucks and their suppliers. Also mortgage repayments rise so consumers have less disposable income to spend on luxuryproducts such as coffee. Low inter est rates should have the opposite effect.* Economic Growth If growth is low in the nation of location of Starbucks then sales may also fall. Consumer incomes tend to fall in periods of negative growth leaving less disposable income. Consumer confidence in products can also fall if the economic mood is low* Inflation rates Inflation is a condition of increasing prices. It is measured using the Retail Price Index (RPI) in the UK. Business costs will rise for Starbucks through ostentation, as will shoe-leather costs as they shop around for new best prices ofmaterials, menu costs will rise as Starbucks have to create new price lists. Also, uncertainty is created when making decisions not least because inflation redistributes money from lenders to borrowers. A firm that borrows L1000 during an inflationperiod will pay back less in real terms as the value of this money will decline overthe period.* Competitors set Competitive pricing from competitors can start a price war forStarbuc ks that can drive down profits and profit margins as they attempt to increase, or at least abide by, their share of the market.* Globalization Globalization of the coffee market has meant farmers of the bean now earn less money than they used to. This can result in a decrease of people willing to do it for a living, which will mean a decrease in coffee produced, resulting in a drop in Starbucks supply levels and probably profits.* Exchange rates Starbucks are affected by exchange rates when dealing with international trade. If the value of the property falls in the country of a coffee supplierthis enables Starbucks to get more for their $ or L when importing the goods to theircountry. This saving can be passed along to the customer. Exchange rates are foreverchanging throughout the world in todays market.Social* Population demographics Population demographics are a very important factor forStarbucks as they identify what parts of the population they need to aim their product sa t or which parts of the population they need to encourage to examine their stores more than they presently do. Looking at the table in the case study demonstrating thepercentage of the age groups that suck coffee or specialty coffee it can be seen that the age groups that Starbucks should be aiming their marketing at are the peoplebetween 35 and 54. They should consider targeting the 18-24 age group as they drinkthe least amount comparatively and by encouraging this segment to choose Starbucks coffee now, there is a chance they may continue to drink it long into the future.* Income distribution Where income is distributed is another factor that Starbucks should look at as this also demonstrates the ideal place to aim their marketing or to locate their stores. Coffee is more of a luxury product so it is those people/places with the most amount of disposable income to spend that should be targeted the most intensely.* Attitude to work Starbucks would not desire to locate to an ar ea where the localpopulation have a poor attitude to work. Recruitment would be difficult, training arduous, and staff turnover would be high. Attitudes to work are important in otherways. A large number of workers in large cities now go out for their lunch rather than use an internal canteen. Starbucks can use this to their advantage and promote the shop as a place where people can meet up and so it will mean that they will get larger amount of people in their stores at this time of the day.* Standard of education/skills When Starbucks are deciding upon new premise they must look at the standards of education and skills locally. They must be sure there arepeople who live there with sufficient skills to ensure successful operation of thebusiness, or at least the potential to learn that comes with a good education.* Working conditions/safety Those people with the most disposable income, e.g. young wholeness professionals etc, will be accustomed to high standards. Starbucks must en sure its shops are clean and comfortable, service is of the highest order and health and safety issues are fully intercommunicate* Location Transport needs to the premises must be considered for both staff and customers. Easy access is vital to ensure there is no unbosom for staff to arrive late orfor customers not to visit.* Age distribution search shows the average age of the population is getting olderand birth rates are stagnating. Starbucks is presently aiming its product at youngpeople but maybe these views will change in the long-term as the market comparison for young people diminishes. The most profitable way forward may be to widen theirtarget market despite the risk of alienating present customers.* Health consciousness Good health and foodstuffs associated with healthy living are important I todays market place, as this is a trend that is occurring at the here and now in western societies. Starbucks can use this information when deciding the additionalproducts to sell, as healthful as coffee, as a large number of their customers are looking forhealthy alternatives to cakes and biscuits, which have been associated with coffee in the past.Technological* IT development Starbucks is always looking to develop and improve its lucre facilities. Starbucks launched its first-generation e-commerce Web site in 1998. In late1999, Starbucks decided the site needed a major upgrade to enable new functionality and prepare for long-term growth. To achieve these goals, Starbucks upgraded to Microsoft Commerce Server 2000, one of the key Microsoft .NET Enterprise Servers. As a result, scalability and performance have improved, and the company now has the tools it needs to profile and target customers, analyze site data, and deliver new features to the market in the shortest time possible.* New materials and processes Developments in the technology of coffee making machines and the computers that Starbucks use to run their cash registers will enable their staff to work more quickly and efficiently. This will result in customers being served quicker and create the potential to serve more customers in a day. This will impede customers from having to wait around for long periods thus improving customer relations along with increasing the customer base.* Software upgrades In the short-term, Starbucks must identify the most efficient software upgrades to use to keep up with the competition. This applies to the improving the accessibility of their website (www.starbucks.com) and also improving the speed and quality of the service provided on the shop floor.* Research and Development activity As a multi-national business empire, Starbucks has the budget and the resources to have a cutting-edge R+D department. The websites very accessible, the facilities are state of the art but more importantly new ideas are consistently being tried in terms of a constantly updating menu.* Rate of technological change The rate of technological change in the current world market is high, much higher than, say, thirty years ago. Much of this is down to the Internet and the speed with which information can be communicated around the globe. Starbucks will need to invest heavily just to stand still in their ever expanding and ontogeny market, and even more so to try to stay ahead of competitors.Legal* Trade and product restrictions Starbucks need to be aware of the trade laws in the unlike countries they occupy and do business with. They need to ensure they are not in violation of e.g., religious laws. Also, certain countries impose a tariff that has to bepaid when goods are imported/ exported so this must be taken into account.* Employment law Each country has alter employment laws. Some may have a Sabbath day, some may have a limit on the number of hours an employee may workper week, all will have varying levels of minimum wage. Starbucks should considerthese factors when deciding on relocation.* Health and Safety regulations S tarbucks may find these regulations are not as stringent or well enforced in certain countries. It would be wise though to enforce universally high standard of health and safety throughout all its shops to maintain a good global image and ensure all laws are abided by. Also, by not maintaining high standards they will be liable for a large amount of civil cases as it is a legal requirement for them to enable that their staff and customers are safe when they are in their stores.* Monopolies commission If Starbucks consider expanding their operations furtherto control an even larger percentage of the market than they already have they will have to consider the possibility of breaking monopolies legislation as they may have a share of the market that is too large. This would mean that they would have unfairadvantage over other companies in the same market. This would mean that they couldbenefit from economies of scale and would also be able to charge prices that were not competitive i n the market and get away with it due to the lack of competition. The contender Commission are in place to try and prevent these situations occurringe.g. CC (back then the MMC) block BskyB attempted takeover of Manchester United in 1999.* Land use Starbucks may have to abide by local planning regulations when building shops or altering purchased sites, as certain areas of land may be saved orunsuitable. All matters would be addressed by the local government.Environmental* Pollution problems Starbucks customers create a lot of waste as they often recant the shop with their cup of coffee and then shut up of it in the street. The packaging forthis cup must be carefully considered to make it as biologically degradable aspossible. Certain other materials can be very harmful to the natural environment.* Planning permissions Planning permission may not be granted if Starbucks wish well tobuild in an area that could be harmful to the environment. The land may be protected.* Work disp osal Starbucks need to carefully consider the methods in which they dispose of their waste as there are strict laws in most countries to ensure a firm trading in their country disposes of the waste that is created in their business in a specific and efficient way. If they do not follow these laws they may find themselves being sanctioned, which not only affects them financially but also tarnishes the reputation ofthe brand name, as most of the waste created will bear the logo of Starbucks.* Environmental pressure groups Starbucks should be aware of the physical and powerful power of groups such as Greenpeace and Friends of the Earth. Any violation of animal or environmental rights by a company is usually followed by a lively and attention-drawing protest from one of the groups. Brand image and customer bases are often irreconcilably tarnished due to the actions of these groups

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