Starbucks PESTLE

2. 10th October 2011

3. Team

4. Contents
I. Overview Starbucks -Milestones
II. PESTLE-Analysis
• General Information
• P – Political Issues
• E – Economical Issues
• S – Social Issues
• T – Technological Issues
• E – Environmental Issues
• L – Legal Issues
III. Conclusion

5. I. Company overview – Milestone (1)
• Founded 1971 in Seattle‘s Pike Place Market
• 1982: Howard Schultz becomes Director of Retail Ops;
– Starbucks provides coffee to fine restaurants and
espresso bars
• 1984: First Starbucks Coffeehouse in Downtown Seattle
• 1988: Full Health Benefits to employees
• 1995: over 500 US-stores

6. Company Overview – Milestones (2)
• 1998: starbucks.com
• 2000: licencing agreement with TransFair USA to sell
Fairtrade coffee in USA and Canada
• 2009: East Africa Farmer Support Centre in Kigali
/Rwanda; Social Engagement to save lives in Africa
• 2010: Asia Farmer Support Centre in Yunnan, China
• Total Stores: approximetely 17,000

7. II. PESTEL ANALYSIS
Use: Measuring
the organization’s
goals against
influences and
demands of
environment
Political
Environmental
Technological
Economical
Social
Legal

8. 1. Political issues
- Issues: Stability of
political environment,
law, taxes, policies
on economy, trading
agreements,
government’s view
on culture and
religion, terrorism
 Example: Hong
Kong, Thailand

9. 2. Economical issues
 The level of inflation.
 Interest rates.
 Income per capita.
 Long-term perspectives for the economy.
 Stabilization
 Unemployment rate

10. 3. Social issues
Our Mission: to inspire and nurture the human spirit
– one person, one cup and one neighborhood at a time.
Goals:
-Continious Improvement of
Quality
External Stakeholder
(Customer) Satisfaction
-„Business Endurance and
thrive“
-Ethical Sourcing
Raising living standards
in Production Areas

11. Social issues (2)
 Goals:
-Promotion of Diversity and Respect
 Internal Stakeholder Satisfaction
-Integrating into the community (environment-orientated
goals)
-Responsibility „to be good neighbours“
-Connection between value chain (suppliers, partners,
customers) and community
-Everyday contribution through positive action
-Success in Business (organization-orientated goals)

12. Social issues (3)
- Critizism
 Genetically modified
ingrdients
 Implications:
Financial
Moral
Legal
Loss of reputation
 Defense
- Fair Trade support
• LESS THAN
10% OF TOTAL
PURCHASES!!!
- Only traditional
brewing
- Blaming on US
legislation

13. 4. Technological issues
• Technology has been played a vital role in Starbucks
 Example:
 Starbucks card
 Starbucks Pay-By-Phone
http://www.techhog.com/featured/app-review-my-coffee-
card-vs-starbucks-for-android/

14. 5. Environmental issues
 Recycling: Recycling in Stores, Reusable
cups, Greener Cups. Composting of coffee
ground.
 Energy:Reduce energy consumption by
25% by 2010. Purchase renewable
energy equivalent to 50% of the
electricity used by 2010
 Water: continue to include water-saving
technology in our equipment
specifications and going to reduce water
consumption by 25% by 2015

15. Environmental issues (2)
 Green Building:create a system to
certify retail stores and store
prototypes.Beginning in December
2010, build all new, company-owned
stores to achieve LEED® certification
 Climate Change: implementing a climate
change strategy since 2004, focusing on
renewable energy, energy conservation,
and collaboration and advocacy. ensure
a long-term supply of high-quality
coffee through responsible coffee
purchasing practices and by investing in
farmers and their communities.
Source: Starbucks USA Homepage

16. 6. Legal issues
 Employment law: working time, age, minimum wage
rate, etc.
- Ex: Starbucks CEO’s announcement that he’s cutting his own
salary from $1,2 million to $ 10.000 per year
(Shawvalenza.blog, 2009)
 Health and safety regulations
- Ex: Starbucks spend more on health insurance — $250 million
— surmount its coffee bill
(Chief executive Howard Schultz, 22/03/2011)
 Consumer protection:
- Ex: Starbucks pay $225.000 to settle Consumer Protection
case for gift card violations. (Santa Rosa, CA , 2009)
- Ex: Stored-valued card: this is a prepaid card offer by
Starbucks.

17. III. CONCLUSION
 Politics: Starbucks concerns about political issues in different
countries
 Economics: constantly growing; raising market capital since 2009
(28bn USD, share value: 40,86 USD). Sales decline due to econ. crisis
 Society: Non-conformance with aims, loss of image and credibility
 Technology: state of the art tech. equipment integration in business
processes
 Environment: focus on producing green products, conducting
environmental campaign, climate change
 Law: favourable employee conditions, reasonable proportion of
wages, consumer protection
 Adequate marketing activities essential for future development,
focus on CSR and company image among the customers

18. References
 Oscar. V. (2010) 'Starbucks growing in the Spanish market', Oscarvadillo, [Online]. Available at:
http://www.google.com.vn/url?sa=t&source=web&cd=1&ved=0CBkQFjAA&url=http%3A%2F%2Fwww.osca
rvadillo.info%2Fuploads%2F6%2F5%2F2%2F6%2F6526599%2Fstarbucks_growing_in_the_spanish_market
.pdf&rct=j&q=Oscar%20Vadillo%20(2010)STARBUCKS%20Growing%20in%20the%20Spanish%20Market%
20%09&ei=hVKTTsSnLsap8QPuouBB&usg=AFQjCNF37GL3TKwwHj0Qp5r5E1XSIyvT7g&cad=rja (Accessed:
09 October 2011).
 Oxford University Press (2010) 'PESTEL analysis of the macro-environment', Oxford University Press,
[Online]. Available at: http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm
(Accessed: 10 October 2011).
 Politico (2011) ‘Starbucks CEO rethinks health law position', Politico, [Online]. Available at:
<http://www.politico.com/news/stories/0311/51727.html#ixzz1aOXYdpe9> (Accessed: 09 October 2011).
 Starbucks (2009) ‘Annual report', Starbucks, [Online]. Available at: <http://media.corporate-ir.
net/media_files/irol/99/99518/SBUX_AR.pdf> (Accessed: 10 October 2011).
 Starbucks (2011) ‘Facts about Starbucks in Middle East', Starbucks, [Online]. Available at: <
http://news.starbucks.com/article_display.cfm?article_id=200> (Accessed: 09 October 2011).
 Starbucks (2011) ‘Mission Statement', Starbucks, [Online]. Available at: < http://www.starbucks.com/about-us/
company-information/mission-statement> (Accessed: 09 October 2011).
 Starbucks (2011) 'Responsibility', Starbucks, [Online]. Available at: <
http://www.starbucks.com/responsibility/environment> (Accessed: 09 October 2011).
 Technorati (2011) ‘Starbucks pay-by-phone', Technorati, [Online]. Available at:
<http://technorati.com/technology/article/new-starbucks-pay-by-phone-will/> (Accessed: 09 October
2011).

19. Many thanks for your attention

20. Q&A
P E S T E L