Pestel Analysis Starbucks

Executive Summary - Madi Daher

Starbucks started in Seattle and expanded throughout the world. The case study focuses on the External Environmental Analysis by conducting SWOT, STEEP, & Situational analysis followed by formulating a balanced strategy that can reduce the threats and seize the opportunities. Starbucks is about integration of cultural values that are inherent in the Italian Espresso Bars. The mission statement of starbucks is to inspire and nurture the human spirit, one person, one cup, and one neighborhood at a time. This means that the organization is targeting the community by bringing its quality blend to the doorstep of the local community in which it operates. It started with Japan in the mid 1990’s and expanded to the

The SWOT analysis done in the report lists the strengths, weaknesses, opportunities, and threats that the company has accumulated including elements from the societal environment through the STEEP analysis. The notable thing about the SWOT analysis was the increasing correlation between the young generation and coffee consumption which is the opportunity that Starbucks will most likely capitalize on. Furthermore, the average consumer in India eats a wide variety of foods so the compatibility with western traditional snacks & pastries offered in starbucks would not work. After the SWOT analysis, the market analysis was conducted to provide a more indepth look at the ways India can be entered. The case analysis ends with providing three distinct alternatives that Starbucks could capitalize on and formulate their strategy from. These alternatives are given pros and cons in order to choose the least harmful one. Finally, the case ends with where starbucks is now in India and if they succeeded or not.

Problem Statement - Madi Daher

Ways to escalate the entry to the Indian coffee market amongst the varying conditions that hinder Starbucks progress such as the need for a joint venture and many other factors that interplay with the current strategy

On the front end there is an inclination towards a western lifestyle, a more liberalized government that lead to higher growth rates and lower inflation rate. This means more foreign investment than before, a growing retail segment, and a growing population of youth. In 2006, FDI was up to 51% in retail trade of single brand products, and the middle class in India was estimated at around 250 million and was doubling in urban crowded cities. However, it is far from good news for Starbucks. This is because as this balanced case study will reveal, there are many threats such as bureaucracy, poor infrastructure, and a sort of retaliation as the STEEP analysis will show. There is a threat of a substitute product being tea. This makes it harder to enter India because the growth of the market is stagnant and it would take more time to devise a strategy that would enable Starbucks to meet its goals and increase demand for Coffee in India. This will mean longer time and resources to devise a pricing strategy as well to gain profit from premium quality coffee beans taking into consideration a competitive environment of urban hubs such as Bangalore to name one. Competitor analysis reveals three competitors: Cafe Coffee Day, Qwiky’s, and Barista that also targeted youth between the ages of 18 to 30 years of age, had increasing revenues, and were against