PESTEL ANALYSIS OF STAR BUCKS

Political:
The United Kingdom has a system of parliamentary democracy. the politically stability index is
0.25 which is in the range of stability index (-2.5 to +2.5). The transparency international
reported rate of UK is 77 out of 100 and the rank of UK in corruption perceptions index is 11 out
of 180. Starbucks have disclose that they experience significant political impact headwinds in
this year which affect sales, including slow economic growth, impact of Braxit [ CITATION Man \l
1033 ]

1. How the system of UK effects the business performance of stark buck UK ?

Starbucks
2. Why they are effecting?

The politically stability and the corruption perception index directly interconnected with the
business growth. As the stability index is 0.25 which is in the range (-2.5 to +2.5) and corruption
perception index is 11 out 180, which means there is low corruption. Starbucks is doing good
business in UK because of low corruption rate and politically stability.

Economic:
The United Kingdom is highly developed social market and also market oriented economy. In
ranking it is the fifth largest national economy analyzed by gross domestic product (GDP) and
ninth largest in purchasing power parity (PPP) and twenty first by GDP per capita 3.3% world
GDP. In 2019, UK was the fifth largest importer and exporter. In 2020, After Brexit they
experience less growth in economy. UK’s trade with more than 27 states of European union
having 49% of the export and 52% import. Starbucks have experienced economic and
geopolitical problems this year which effect sales, including slowing economic growth. They
experienced strong competition in the UK, in its UK business lost 22 million last years, the
business made a profit this with increase of 4% sale. [ CITATION Oxf13 \l 1033 ]

1. How these factors effect Starbucks?

As a general rule, during seasons of economic growth, consumer confidence is high, people
have greater disposable income, and employments rate are low. In case of UK the
unemployment rate is 4.9% which is quiet impressive.
 2. Why are they effecting Starbucks?

Starbucks is affect in a scene that they have the business of food and drinks, if the people have
greater disposable income then they love to visits such places and enjoy and hence their sale
will be greater and business will run smoothly.

3. Are they effecting Starbucks in a positive or negative way?

They affect Starbucks in negative way in a sense that it faces slower economic growth due to
which they loss profit in the market. People were demanding coffee and drink on their table
without delivery charges.

Social:
The United Kingdom is on 21 number in the list of world population having the estimated
population of 66.7 million based on the latest united nations data (January 29,2021). Currently
UK is generating over two billion British pounds in organic and food market. Starbucks have
faced many problems with public relations. It arises in the result of aggressive tax avoidance. It
have been successful in growing their store but in its last 15 years the company paid tax only
once.[ CITATION Wun20 \l 1033 ]

1. How it effects Starbucks in UK?

Starbucks have the customers which daily visits their café in morning or evening for a cup of
coffee so, it is important thing that what actually their customers think about their company?
They discuss when they have having their cup of coffee about their tax avoidance.

2. Why they effecting?

If the daily customers discussing their rumors in the market, it will affect their company by
slowing down the sales and customer will shift to another café, which are competitor if it.

3. Are they affecting in a positive way or negative?

It is affecting Starbucks in a negative aspect , when bad news is spreading bad news about
company in the market it will distract consumer attention to towards alternative.

Technological:
The United Kingdom is the second-best country for startups. In the digital industry UK has the
great prosperous economy and expertise, due to which UK become the great well known in
new idea creation .UK economy much more depend on the digital technology businesses. The
age of the people of UK ranges 40.5 years, this age of people is mostly active to technology.
Starbucks is switch to technology to built-up strong connection with their customers. they have
launched the mobile order and pay feature so, that customers easily buy their orders without
getting in the line, because 80% population is on social media. they are also boosting its mobile
loyalty program through partnership with New York Times.[ CITATION Jam \l 1033 ]
1. How they are effecting Starbucks in UK?

It effects in a way that the age group in UK is up to 40.5 years, this age group is more covalent
with the technology. So, it will effect directly the company.

2. Why they effect it?

It effects directly because of if customers are of modern minds then company should upgrade
their services in a modern sense that people love it and not distract towards alternative.

3. Is it effects in a positive way or negative?

It will effect company in a positive way because the company have launched its online order
service and

Environmental:
The temperature of UK on average ranging from 18 to 25 °C (64 to 77 °F).and in
summer the Northern Isles have temperature of 15 °C (59 °F). while in some parts
of UK the temperature reached to 38 °C (107°F). In the UK many types of weather
can be experienced in a single day generally the weather in UK is cloudy, rainy
and cool and high temperature is rare. Pollution has huge risk to health and also to
environment so, an article was passed in 1974 to control and cover the
environment issues like noise, air, water and wastes. Starbucks starts caring about
environmental impact in 1999 and decided to running a “Grounds for your
Garden” and also start giving the leftover coffee grounds to anyone who requests it
for composting.[ CITATION Dem08 \l 1033 ].
Legal:
United Kingdom has implement the employment equality law in which prejudge-actions in the
workplace is not negotiable. The UK labor laws states that it is unlawful to discriminate a person
as they having “protected characteristics”, which are age, gender, disability, civil partnership,
race, religion, sex and pregnancy. The UK government have sets the laws for employment that
the minimum wage of per hour is £8.21(ages ranges 25 or over while younger workers have
low rate) and having certain minimum laws. There is also consumer protection laws, if you are
treated unfair in buying goods or service everyone can access to the consumer protection law.
An Article was passed in 1974, in which the duties of employer towards employee and members
of public. In 2012, Starbucks in UK faced a problem of public relation that its failure in paying
cooperate income tax. Starbucks is very much popular in the community of socialized, well-
mannered and well discipline people in which they operate. It was just a propaganda about
Starbucks to depict the image with their consumers although they are paying fair wages to
employees paying fair prices to coffee growers.[ CITATION Cam16 \l 1033 ][ CITATION CHi \l 1033 ]