Environmental Analysis Paper
RUNNING HEADER: ENVIRONMENTAL ANALYSIS
Environmental Analysis Paper: Starbucks
University of Phoenix
July 14, 2008
Environmental Analysis Paper: Starbucks
Macroeconomic Forecast
The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Starbucks strategy is to expand globally to provide high quality coffee in convenient and highly visible locations. Despite recent economic setbacks the company is continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Financial release, 2007).
Starbucks has succeeded due to several economic factors as well as price elasticity of demand. Price elasticity of demand can be determined by the percentage change in the quantity demanded with the percentage change in price. They should consider household income that people are willing to spend more on food and beverages when household income increases. Starbucks innovation in joint ventures has opened new markets and opportunities increasing product use among different demographics. Joint ventures with Pepsi Company, Dreyer's Grand Ice Cream Inc and inspiring entertainment with the launch of “Hear Music” have developed Starbucks with great success. Starbucks has shown their values, leveraging market power, resources, and capabilities to achieve returns higher than their competition (Investment Group, 2001).
Social and Culture
The social factors that affect Starbucks involve the beliefs, values, attitudes, opinions and lifestyles of persons in the external environment as developed from cultural, demographic, education, ethnic conditioning and customers’ needs and the size of the potential market (Pearce-Robinson, 2004). The Starbucks approach to corporate social responsibility (CSR) includes developing “ethical...
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