1. PESTEL for the chosen company i.e. Starbucks UK (if at some point need more information, you can refer to Starbucks globally).
Starbuck UK enjoys an enabling political environment despite the fact that the government has shown instability over the past years. This is why Starbuck had encountered numerous challenges more so the economic recession that has been witnessed in the recent past. The high regulatory environment that characterizes the United Kingdom has made it easier for Starbuck to carry out its activities because of the lower cost of doing businesses (Linn, 2008). The relationship between the United States and United Kingdom has also been of great influence to the success of Starbucks. However, the economic crisis that rocked the global environment affected the operations of the company and has not yet recovered to a steady position.
In terms of the economy, the rate of unemployment in the UK remains high as a result of static GNP growth rate. In addition, when there is an increase in the rate of inflation as is the case in the UK, there is a drop of disposable income. This is an indication that few people will be active participants in the services initiated by Starbuck. The economic crises of 2007 affected consumers were established members of Starbucks and this affected the expansion plan at Starbucks.
Health remains fundamental for the success of the company in the United Kingdom and the increasing rate of obesity cases only serves to caution people about their health (Iwata, 2006). The company has been affected by the reported cases as people are becoming more health consciousness. The switch to a more fabric and vegetable oriented diet for most people indicates that most people are switching from the popular diets offered by Starbuck. The migrating population to the UK has been an opportunity for Starbuck to attract more consumers.
Technological revolution in the UK has continued to improve and the government encouraged technological development (Reynolds, 2011). Wireless networking even in Coffee Shops in UK shows the pace of technological development as well as a fast technology transfer speed. In order to cut the long queues that are normally experienced at peak times, Starbucks initiated a new phone payments system that cuts down the duration of service delivery. Furthermore, Starbucks embraces the use of Facebook and other social networking site and this continues to encourage social network memberships.
The orientation that Starbucks engages in different services dictates that pressure groups and non- governmental organizations can change their practices so as to be in line with the accepted environmental standards and regulations. For instance, such groups have been able to lobby consumers through protests and boycotts. In order to ensure that environmental policy is taken into account, the company works together with the Fair-Trade movement so as to gain support from the group. This makes it favorable for Starbucks to operate in the United Kingdom.
In addition, the decreased level of restrictions to those migrating to the UK has made business quite entertaining. Starbuck remains committed in ensuring that it respects the opinions of employees who express their ideas and opinions about their activities. Starbucks expansion strategy on the other hand is likely to be affected by legal issues like national protectionist laws and monopoly. As a result, the need to expand is likely to be affected by these issues.
2. Starbucks Strategy)
- Leverage the Franchise
It is worth noting that Starbuck had not previously operated within the franchise module but later realized its significance in business. In 2012, Starbuck announced that they were initiating franchise module as part of its organic strategy. This strategy has seen the company open in smaller towns as well as improving competitiveness in the UK market which is highly competitive. It is true that Starbucks has more than 700 stores in the UK market and the entry of its franchise strategy will only add more revenues for the company in a short term (Jagger, 2008). The lesson of franchise in the UK will be a step towards introducing more franchise around the globe.
- Intensify Non-Apparel
There are a group of consumers who lover merchandises and one way of reaching to several people is by intensifying non-apparel. Starbucks has been instrumental in promoting its mission by the sale of different merchandise such as caps, t-shorts and hand bags (Starbucks, 2010b). This not only boosts its public image but makes consumers become acclimatize with their services. Merchandising through its website has contributed to the sale of various services to the consumer. Through this strategy, it has been able to reach many consumers.
- Accelerate Retail-Led Growth
Leadership plays an important role in any organization and this is the same at Starbuck UK. The management believed that a change in leadership at the company was one way through which they are able to accelerate growth within a short time. As a result, several departments in the company were affected as new leaders took charge. Some of the positions that had new leadership include the Vice Presidency, general Counsel and Secretary among others (Starbucks, 2010a). The purpose was to strengthen the three region operating model that is employed at Starbuck.
- Invest in Under-Penetrated Markets
In order to penetrate the markets which have not yet been accessed, it will be vital for Starbuck to take into account its strong brand awareness among its target segment. There are consumers who are already knowledgeable about their brand and hence it will be easier for them to access these markets (Starbucks, 2010a). The second advantage that Starbuck can use to penetrate the market is through an able domestic partner.- Pursue Operational Excellence
Leadership at Starbucks values the revolution of technology and opted to create a new global technological network so as to optimize and infuse the organization. This was by ensuring that there was a learning environment where employees can continue to improve on their talents while at the same time learning how to communicate effectively (Starbucks, 2010b). Other measures that were introduced to improve operations were the development of an IT acquisition play book as well as a new Health and Wellness platform.