Challenges in the External Environment of Starbucks
Choose an international business that interests you. Identify challenges in its business environment that are of current strategic importance. How, in your opinion, should the international business you have chosen respond to those challenges?
An international business, often referred to as an MNE (Multinational Enterprise) is one which has a wide-reaching approach and will operate in more than one country. Recognisable international businesses include the likes of McDonald’s, Apple and BP. Although these colossal businesses operate overseas and therefore have vast markets, it doesn’t go to say that they don’t face similar problems to localised businesses operating in smaller market segments. The best way to analyse an international business’ external environment and the problems they face is probably to look at the PESTLE factors. PESTLE will mostly focus on a business’ external environment looking at political, environmental, social, technological, legal and economic issues. Also of importance when evaluating an international business’ environment is a method called the SWOT matrix. This method allows an insight on the company as a whole, allowing the user to gain understanding of the internal and external business environment. As both PESTLE and SWOT are being used, more than one concept of the external business environment can be collected. To add further analysis, Porter’s Five Forces (Michael Porter, 1979) will be used to measure the competiveness in the coffee market enabling me to see whether or not any change of strategy is needed. Through this essay, PESTLE, SWOT and Porter’s Five Forces will be put in place to explore the problems of Starbucks’ business environment that are of current strategic importance. Starbucks’ was originally set up in Seattle, USA by Jerry Baldwin in 1984. It began its expansion in 1996 when they opened a store in Japan, their first outside of North America. Since then, Starbucks took off and have now expanded into over 50
An international business, often referred to as an MNE (Multinational Enterprise) is one which has a wide-reaching approach and will operate in more than one country. Recognisable international businesses include the likes of McDonald’s, Apple and BP. Although these colossal businesses operate overseas and therefore have vast markets, it doesn’t go to say that they don’t face similar problems to localised businesses operating in smaller market segments. The best way to analyse an international business’ external environment and the problems they face is probably to look at the PESTLE factors. PESTLE will mostly focus on a business’ external environment looking at political, environmental, social, technological, legal and economic issues. Also of importance when evaluating an international business’ environment is a method called the SWOT matrix. This method allows an insight on the company as a whole, allowing the user to gain understanding of the internal and external business environment. As both PESTLE and SWOT are being used, more than one concept of the external business environment can be collected. To add further analysis, Porter’s Five Forces (Michael Porter, 1979) will be used to measure the competiveness in the coffee market enabling me to see whether or not any change of strategy is needed. Through this essay, PESTLE, SWOT and Porter’s Five Forces will be put in place to explore the problems of Starbucks’ business environment that are of current strategic importance. Starbucks’ was originally set up in Seattle, USA by Jerry Baldwin in 1984. It began its expansion in 1996 when they opened a store in Japan, their first outside of North America. Since then, Starbucks took off and have now expanded into over 50