PEARSON BTEC HND LEVEL 5 IN BUSINESS

Unit 1 - Business and the Business Environment

Submitted by:
Mohamed Hesham Ghannoum

Registration Number:
JG97427

Assignment No and Title:

2: Business Environmental Analysis

Today is Date:
5/31/2017

ABChorizon BTEC approved Centre Number

91667

Mohamed Hesham Ghannoum Unit 1 -Business and Business Environment 1

LEARNER ASSIGNMENT SUBMISSION AND DECLARATION
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Learner Full Name Mohamed Hesham Ghannoum

Registration No: JG97427
Program Title PEARSON BTEC HND LEVEL 5 IN BUSINESS
Unit No and Title Unit 1 - Business and the Business Environment
Assignment No and 1: Business Environmental Analysis
Title:
Lecturers Name Mr. Anas Kriz
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similarity is within the range of plagiarism 20%. I have clearly referenced and
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understand that false declaration is a form of malpractice and subject to
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Learner Signature: Mohamed Hesham Ghannoum

Date: 31-May-17

Table of Contents
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples........................................................................................................ 3
Pestle analysis of India: ......................................................................................................................................... 3
1. Political factors: ............................................................................................................................................... 3
2. Economic factors:............................................................................................................................................ 3
3. Social factors: ................................................................................................................................................... 3
4. Technological factors: .................................................................................................................................... 4
5. Legal and environmental factors:................................................................................................................ 4
P5 Conduct internal and external analysis of specific organizations in order to identify strengths
and weaknesses. .......................................................................................................................................................... 4
Strengths of Starbucks: ......................................................................................................................................... 4
Weaknesses of Starbucks: .................................................................................................................................... 5
Analysis of internal and external factors and how these factors relate to strengths and
weaknesses in Starbucks in India: ...................................................................................................................... 5
References ........................................................................................................................................................................ 6

Mohamed Hesham Ghannoum Unit 1 -Business and Business Environment 2

LO3 Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
The PESTEL professional analysis process helps companies to understand the various forces
related to external variables and effects and to collect data and information. So Starbucks followed
these steps when analyzing the external environment in India.
Pestle analysis of India:
1. Political factors:
India is one of the largest democracies in the world and operates in the form of a federal
government.
The political environment in India is affected by many factors such as government policy
and the interests of politicians and ideologies of many parties, so the business environment
in India is heavily affected and considered a negative factor.
Has a very modern tax system, making it able to impose many taxes such as income tax,
service tax and sales, is a positive factor.
Various programs affect privatization, government and entrepreneurship.
Starbucks can offer its products in India after analyzing situation and political variables.
2. Economic factors:
These factors include economic growth, interest rates, exchange rates and inflation. These
factors affect unusually how companies work and make decisions (negative points).
India's economy has remained stable and balanced since the introduction of industrial
reform programs in 1991, which is consistent with public policy and is a positive factor (and
a positive point).
There are discounts in the field of industrial licenses and the liberalization of foreign capital,
which leads to a continuous recovery in the economic environment in India, which is a
(positive factor).
These factors and variables give Starbucks information and data on economic changes.
3. Social factors:
Social factors indicate any developments or changes in trends affecting the business
environment, so the aging population in India leads to increased pension costs. (This is a
negative point Starbucks should take into account.)
India has a population of more than 1.2 billion people with about 70% between the ages of
15 and 65. Therefore, there are indications of percentages according to age. These

Mohamed Hesham Ghannoum Unit 1 -Business and Business Environment 3

 structures contain varying flexibility, in education, work positions, income distribution, (and
are considered a positive point).
4. Technological factors:
Technologic factor has a significant impact on product development, making the work
environment based on the creation of tools and strategic plans aimed at reducing costs (a
positive point).
India is one of the world's most powerful technological sectors, working on the continuous
development of the world of technology to obtain information.
5. Legal and environmental factors:
Recently, a number of legal changes have been implemented in India, such as recycling,
minimum wages, and discrimination in disability. This has a direct impact on business
activity (a negative point for Starbucks).
When it comes to the environment, air quality in India has been adversely affected by
industrialization and urbanization, resulting in serious health conditions, which are negative.
There are institutions for environmental pressure groups, noise controls, and waste control
and disposal programs; hence, here is the Pestle analysis in India, which will provide the
company with a detailed analysis of the four important factors that affect the external macro
environment (a positive point).
(pestleanalysis.com, 2014)

LO4 Determine the internal strengths and weaknesses of specific businesses and explain
their interrelationship with external macro factors
P5 Conduct internal and external analysis of specific organizations in order to identify
strengths and weaknesses.
Starbucks entered India and has a joint venture with Tata Global Beverages to become Starbucks
'Tata Alliance'. Tata Starbucks opened its first store in Mumbai and now has nearly 80 stores in
India serving a variety of products in their stores. There are strengths and weaknesses for the
internal status of Starbucks.
Strengths of Starbucks:
Famous brand vision. Starbucks is the largest coffee chain in the world in terms of number
of stores (about 23,000) and is very famous among coffee lovers. Starbucks will help to gain
popularity easily in local markets in India.
Ritual cafes are attractive, giving you the perfect ambiance and entertainment services like
free Wi-Fi.

Mohamed Hesham Ghannoum Unit 1 -Business and Business Environment 4

 Starbucks card and the famous loyalty card system available in India, giving a huge loyalty
opportunity to its customers. This leads to frequent purchases and rewards.
Having a huge Starbucks menu has a lot of diversity in terms of coffee and tea with over 25
options in the hot and cold part of the beverage department they have the option to
customize your drink, which will help increase customer satisfaction and have a department
of fast food and famous pastries
Weaknesses of Starbucks:
Access is relatively new in the Indian coffee market and has a competitive strength. This will
result in lower sales in Starbucks.
Excellent image and high pricing may lead to lower espresso coffee price at Tata Starbucks
130 (including taxes) Starbucks Premium may increase premium costs and high costs to the
target audience.
No items at lunch. Indians prefer side dishes with coffee. Starbucks has very few varieties in
the food category that will only make coffee while the tea will be demand less.
(Starbucks swot analysis, 2016),
Analysis of internal and external factors and how these factors relate to strengths and
weaknesses in Starbucks in India:
After completing the process of analyzing the internal and external environment of Starbucks by
collecting information, data, and variables for the environment and analysis to make them closely
compatible with the objectives and products of Starbucks. It is clear to us that there are many
strengths and weaknesses associated with external factors in India, which make Starbucks targets
can be achieved first can maintain its strategic position in India.
1. Starbucks has a strong point that it has a reward system that rewards and rewards its loyal
customers. This point is tied to India's social worker because India has more than 1.2 billion
people, with about 70 percent aged between 15 and 65. Therefore, there are indications of
age-centric percentages. What makes the increase and loyalty of customers this is due to
Starbucks' strength and strategy of attracting customers?
2. There is a second energy point at Starbucks that cafes have attractive ritual qualities, and
offer their customers an ideal ambiance. It focuses on entertainment such as free Wi-Fi. We
note that they relate to environmental and technological factors. When it comes to the
environment, air quality in India has been adversely affected by industrialization and
urbanization, leading to serious health conditions, which are negative. Thus, Starbucks,
through the process of analysis, made the atmosphere of cafes more suitable for Indian
rituals and culture.
3. One of the negative points of Starbucks in India is that the Indian market has a competitive
power to its product and is therefore linked to some extent by economic factors such as
Mohamed Hesham Ghannoum Unit 1 -Business and Business Environment 5
 economic growth, interest rates, exchange rates and inflation. These factors influence how
companies operate and make decisions and strategies that make them strong and
unaffected by the competitive marketing environment.
4. There is also a second negative point to Starbucks in India. Excellent image and high pricing
may result in a lower price target for Espresso at Tata Starbucks 130 (including taxes)
Starbucks Premium may increase the distinctive costs and high costs of the target audience
due to developments or changes in trends affecting the business environment. Increase the
costs of pensions and imbalance in salaries and control of prices and lack of knowledge of
the culture and requirements and the need for age group old class. This is a negative point.

References
pestleanalysis.com, 2014. PESTLE ANALYSIS OF INDIA. [Online]
Available at: http://pestleanalysis.com/pestle-analysis-india/
[Accessed 2017].

Starbucks swot analysis, 2016. Starbucks swot analysis. [Online]

Available at: https://www.quora.com/What-is-SWOT-Analysis-of-TATA-Starbucks
[Accessed 2017].

Mohamed Hesham Ghannoum Unit 1 -Business and Business Environment 6