The Political Economic Social Cultural And Technological Environment Marketing Essay

The Political economic kind Cultural And technological Environment Marketing EssayIt is important for these reasons By making effective lend cardinalself of PEST Analysis, you uncoering out that what you be doing is aligned positively with the forces of ex swap that atomic number 18 affecting our world. By taking advantage of change, you ar a good deal more likely to be successful than if your activities oppose it.Good utilize of PEST Analysis helps you avoid taking action that is condemned to failure for reasons beyond your control.PEST is callful when you start operating in a spic-and-span pastoral or region. Use of PEST Analysis helps you break waive of unconscious assumptions, and helps you quickly adapt to the realities of the tonic environment.(http//www.mindtools.com/pages/article/ saucyTMC_09.htm)Our mission to juice up and nurture the human spirit one person, one cup and one neighborhood at a fourth dimension.Starbucks Objective to establish Starbucks a s the virtually recognized and respected brand in the world. cable Ethics and abidance 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 work.The program directs and distri just directlyes a contendeness materials, including theStandards of Business Conduct facilitates legal compliance and ethics training investigates sensitive issues such(prenominal)(prenominal) as potential conflicts of interest and provides additional channels for partners to voice concerns. Partners be encouraged to report all types of issues or concerns to the program through their natural selection of the offeredcommunication channels.PESTLE stands forPolitical The current and potential influences from political pressures frugal The local, national and world economy impactSocial The ways in which changes in society affect usTechnological How saucy and appear technology affects our b usiness?Legal How local, national and world legislation affects usenvironmental The local, national and world environmental issuesThe PESTLE analysis forget be utilise to identify and understand the important performers Starbucks must twaddle in all fields of the business.Political* put downation policy high tax imposed on farmers in those countries producing the cocoa bean will normally mean Starbucks pay a higher price for the cocoa theypurchase. any(prenominal) fluctuations in gross levels in the industry atomic number 18 almost surely ultimately passed on to the consumer. Recently (June 13, 2003) Tanzanias Minister ofFinance harmonized and rationalized local politics taxation to boost rural outputivity of the chocolate bean. Tax was lowered for these small holder farmers and this saving will discombobulate been passed on to purchasers of coffee like Starbucks.* Deregulation A decade ago, the USA pulled stunned of the ICA (international Coffee Agreement) t hat set export quotas for producing nations and kept the price of coffee somewhatwhat stable. Coffee quotas and price controls ended. Since the deregulation farmer s make suffered and their earnings rush dropped. Many have struggled to make a living so have given up.* International calling regulations/tariffs Trade issues will affect Starbucks predominantly when exporting and importing goods. When a nonher fields government imposes a tariff it non only results in an efficiency loss for Starbucks but large income transfers brush aside become inconsistent with equity. This extra charge shag go a bargain into a rip-off. Also, since 9/11, trade relations have been adversely affectedbetween the USA and some other countries.* Government perceptual constancy Starbucks should thoroughly investigate the political stability of any country they end to expand to. Changes in government can lead to changes in taxation and legislation. The forthcoming American elections whitethorn hav e an effect on Starbucks as new legislation or new or existing government whitethorn bring in taxes. Also, those countries in political turmoil or civil war (e.g. Zimbabwe at present) should be approached with great caution when come acrossing new ventures.* International stability The international economy must be brought into circumstance as it can affect Starbucks sales and foodstuffs. The aftermath of 9/11 was an example of an economic downturn that affected the world securities industry. If the world trade is in a slump it is not usually the ideal time for a business to experience at grand expansion.* Employment law of nature A reduction in licensing and permit costs in those countriesproducing the coffee bean for Starbucks would lower intersectionion costs for farmers. This saving would in turn be passed on to the purchaser.Economic* Interest pass judgment A nobble in interest place means investment and expansion plans are put-off resulting in falling sales for St arbucks and their suppliers. Also mortgage repayments organise so consumers have less disposable income to spend on luxuryproducts such as coffee. Low interest rate should have the opposite effect.* Economic Growth If growth is low in the nation of location of Starbucks thitherfore sales whitethorn in addition fall. Consumer incomes tend to fall in dots of forbid growth leaving less disposable income. Consumer confidence in products can as well as fall if the economic mood is low* Inflation pass judgment 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 inflation, as will shoe-leather costs as they shop virtually 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 loaded that borrows L1000 during an inflationperiod will pay back less in real hurt as the value of this money will decline overthe period.* Competitors determine Competitive pricing from competitors can start a price war forStarbucks that can drive down profits and profit margins as they strive to increase, or at least advance, their dower of the mart.* 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 slew will to do it for a living, which will mean a decrease in coffee produced, resulting in a drop in Starbucks supply levels and belike profits.* Exchange rates Starbucks are affected by exchange rates when dealing with international trade. If the value of the currency 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 for eerchanging throughout the world in todays market.Social* Population demographics Population demographics are a actually important factor forStarbucks as they identify what parts of the population they read to aim their product sat or which parts of the population they make to encourage to visit their stores more than they presently do. Looking at the table in the slip-up study demonstrating the per centum of the age multitudes that drink coffee or peculiarity coffee it can be seen that the age groups that Starbucks should be aiming their merchandise at are the dealbetween 35 and 54. They should consider targeting the 18-24 age group as they drinkthe least amount comparatively and by supporting(a) this segment to choose Starbucks coffee now, in that location is a chance they whitethorn 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 the ir 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 want to locate to an area where the localpopulation have a poor attitude to work. recruitment would be difficult, training arduous, and mental faculty 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 premises 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 thebusin ess, 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 single professionals etc, will be prone to high standards. Starbucks must ensure its shops are clean and comfortable, service is of the highest send and health and safety issues are fully addressed* Location comport needs to the premises must be considered for both supply and customers. wakeful access is vital to ensure there is no excuse 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 proportion for young people diminishes. The most profitable way front may be to widen theirtarget market despite the jeopardize of alienating present customers.* Health consciousness Good health a nd foodstuffs associated with muscular living are important I todays market place, as this is a trend that is occurring at the moment in western societies. Starbucks can use this information when deciding the additionalproducts to sell, as well 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 earnings facilities. Starbucks launched its first-generation e-commerce Web site in 1998. In late1999, Starbucks resolved 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 constitute 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, an d 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 universe served quicker and create the potential to serve more customers in a day. This willprevent customers from having to wait around for long periods thus alter 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 wait up with the competition. This applies to the improving the accessibility of their website (www.starbucks.com) and also improving the speed and feature 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 depa rtment. 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 developing market, and even more so to try to stay leading of competitors.Legal* Trade and product restrictions Starbucks need to be aware of the trade laws in the various 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 varying employment laws. Some m ay 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 Starbucks may find these regulations are not as stringent or well obligate 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 prerequisite for them to enable that their staff and customers are safe when they are in their stores.* Monopolies delegacy 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 calamity of breaking monopolies legislation as they may have a share of the marke t 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 in the market and get away with it due to the lack of competition. The Competition Commission are in place to try and prevent these situations occurringe.g. CC (back then the MMC) pulley-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 protect orunsuitable. All matters would be addressed by the local government.Environmental* Pollution problems Starbucks customers create a lot of waste as they very much leave the shop with their cup of coffee and then dispose of it in the street. The packaging forthis cup must be carefully considered to make it as biologically degradable aspossibl e. Certain other materials can be very harmful to the natural environment.* Planning permissions Planning permission may not be granted if Starbucks wish tobuild in an area that could be harmful to the environment. The land may be protected.* Work disposal 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 stand up the logo of Starbucks.* Environmental pressure groups Starbucks should be aware of the physical and important 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 swift a nd attention-drawing protest from one of the groups. Brand image and customer bases are often irreconcilably tarnished due to the actions of these groups