MGT 361

INTERNATIONAL BUSINESS
STARBUCKS UNITED STATES
(MARKETPLACES OF NORTH AMERICA)

CLASS: JBA1115A
SEMESTER: MARCH 2022 – AUGUST 2022

NAME MATRIC ID

NUR SYAFIQA YASMIN BINTI ISHAM 2020751933

NOORSHAMEERA BINTI NOORHELMI 2020179847

FARAHANA BINTI ISMAIL 2020736949

NOR MAISARAH BINTI ISMADI 2020171221

WAN NAZMI BIN ABDEL NASSER 2020938399

MOHAMAD YASSEEN BIN KAMARUZZAMAN 2020385801

MADAM ZURINA OMAR

DATE OF SUBMISSION: 18 MAY 2022
 TABLE OF CONTENT

NO. CONTENT PAGES

1. 1.0. BACKGROUND OF UNITED STATES OF AMERICA 2-4

2. 2.0. UNITED STATE WORKING CULTURE (DO’s & DON'Ts) 5-6

3.0. EXTERNAL FACTOR WHEN STARBUCKS DECIDED TO

3. 7-9
OPEN THEIR BUSINESS IN USA

4. 4.0. SCENARIO OF STARBUCKS IN USA 10-11

5. 5.0 CONCLUSION 12

REFERENCE
6. 13-14

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1.0 BACKGROUND OF UNITED STATES OF AMERICA

The United States, formally the United States of America, abbreviated U.S., or
U.S.A., and known as America, is a country in North America that consists of 50 states and is
governed by a federal republic. The United States is the world's oldest surviving functioning
democracy, operating as an example and inspiration for other countries aspiring to establish
democratic systems. A free press is one of the most essential principles of American liberty.
The president, vice president, presidential advisors, and Cabinet, as well as 15 executive
departments and hundreds of additional ministries and agencies, try to compensate the
executive branch of the United States government.

In U.S.A political life, there are two major political parties who are running the
government. Firstly, the democratic party or also known as The Democratic National
Committee which will elects leaders who can fight for equality, justice and opportunity for
all. The officers of the Democratic National Committee, led by Chair Jaime Harrison, come
from many areas of life and reflect the best of the Democratic Party. Our party has led the
fight for civil rights, health care, social security, workers' rights, and women's rights for more
than 200 years. The party is led by Barack Obama, John F. Kennedy, FDR, and the millions
of ordinary Americans who strive every day to make the country better. In 2020, the
presidential nominee for The Democratic National Committee is Joe Biden while for
Democratic-Republican Party is Donald Trump.

As it is mentioned before, about the Democratic-Republican Party, this is another

major party politics in U.S.A. It is also referred as the Jeffersonian Republican Party founded
by Thomas Jefferson and James Madison. A Democratic-Republican Party is a system of
government in which individuals elect representatives to execute power and influence on
their behalf, either directly or indirectly. The Democratic-Republican Party claimed that the
law did not have the authority to acquire extra authorities to carry out its legal
responsibilities. Democrats-Republicans believed that agriculture should remain the
foundation of the US economy, and that the US should serve as the world's agricultural
provider. This party fight for individual rights and justice.

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 The wide variety of the United States is perhaps its most unique feature. Although the
United States' total population is large by world standards, its general population density is
low. The capital of United States is Washington D.C while the most popular states that attract
tourists are New York City, Texas, Los Angeles, and Chicago. California is the most
populated state in the United States since Hispanics or Latinos represent approximately
39.4% of California's total population. California also is the state with the largest Asian
American population in the United States which is 15.5 percent while Los Angeles Metro is
California's biggest metropolitan area. In California, it has up until 39.5 million of citizens.

The country contains some of the world's largest urban concentrations as well as some
of the most massive territories that are almost devoid of habitation. The country's richness is
partly related to its abundant natural resources and massive agricultural output, but it owes
more to the country's advanced economy. Its exports and imports account for a significant
percentage of global trade. The US has an impact on the global economy as both a source and
a destination of investment capital. The country's economy is more diverse than any other on
the world, and most of its citizens enjoy one of the world's greatest living standards. In
United States of America, Maryland is the richest states Maryland might have a relatively
low median home value compared to many other places in the United States, but the Old-Line
State has the highest median household income in the country, making it the richest state in
America for 2022. The cost of housing in Maryland is $384,928.

With relatively high incomes and a low cost of living, the American economy provides great
opportunities. The emphasis on efficiency and meritocracy in the United States has pushed
innovation to new heights and feels downright freeing to those used to rigid structures.
Nonetheless, immigrants working in the United States face a work culture that might be
contradictory. Due to its size, the mainland United States has a diverse variety of weather.
However, it has a mild climate, with cold winters which is often severely cold and hot
summers which is often blazing, with seasonal spans vary according to latitude and altitude
from the sea.

Since the American belief in equality, working culture in the United States is often less
formal and hierarchical than that of other countries. Employees are frequently addressed by
their first names, have more access to bosses, and dress and communicate in a relaxed
manner. Americans work longer hours and take fewer breaks than people in most other

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developed countries. According to a 2016 study, Americans work around 20% longer hours
than Europeans which is equal to an extra day per week and take fewer holiday days per year.
Monday through Friday, 9:00 a.m. to 5:00 p.m., is the usual work week, but be prepared to be
flexible with your schedule.

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2.0 UNITED STATE WORKING CULTURE (DO’s & DON'Ts)

The work environment in the United States is both professional and casual. In the United
States, the work culture and dress code are distinct. People prefer to dress casually, work
times are flexible, and the work environment is generally relaxed. There is little obvious
hierarchy between managers and their subordinates, and the office atmosphere is casual.
Employees are treated equally and are encouraged to express their own opinions. Meetings
are a big part of the American work culture. To demonstrate professionalism, arriving on time
or slightly early are encouraged. For United States citizen, lateness can have a negative
impact. If you're hosting the meeting, it's even more necessary to start on time. Not only that,
depending on the importance of the business being discussed, meetings might be informal.
These sessions are more like talks than decisions, and they are focused on assessing,
planning, and reviewing a project. Furthermore, the United States is known for creating a
welcoming environment that encourages openness. For example, bring humour into the
discussion. Though not often by choice, United States people work longer and harder than
other Western people. Executives frequently keep a close eye on staff absence and
productivity. There may be social conditioning in some workplaces to avoid taking time off
unless essential.

Dos and Don’ts in American work culture

Dos in American work culture 

1. Spend time and effort getting to know your American counterpart. Ask questions
throughout the meeting to get to know your contact but be cautious about asking
personal questions.
2. Prepare by reading up on the organisation, structure, culture, and history of activities,
which allows you to skip the fundamentals and gain a deeper understanding during a
personal contact.
3. Follow-up is important to maintain relationships 'warm' and expanding your network,
therefore value your contacts and network. When possible, attend networking events
as well.
4. Recognize that contracts in the Netherlands and the United States are quite different
due to various legal systems and strive to establish a middle ground.

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 5. Use American spellcheck in communications, presentations, and other situations

Don’ts in American work culture

1. Don't be too straight or brutal, and don't pass judgement. In comparison to the Dutch,
Americans are less judgmental.
2. During initial business interactions, avoid discussing politics or religion.
3. Avoid using European letter sizes and use American standards instead
4. Avoid bringing up contentious issues such as gun control, the death penalty, abortion,
civil rights, and so on. In the public domain of debate, these conversations rarely
achieve a conclusion and can swiftly devolve into intense disagreement.
5. A recent Gallup poll found that 9 out of 10 Americans are proud of their country. As a
result, do not mock the United States. Many Americans consider themselves patriotic
and ridiculing their country would very certainly offend them.

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3.0 EXTERNAL FACTOR WHEN STARBUCKS DECIDED TO OPEN THEIR
BUSINESS IN USA

Starbucks Coffee's success is linked to the company's ability to deal with external factors like
those identified in this PESTEL/PESTLE assessment. The PESTEL/PESTLE evaluation
framework identifies several the most important external factors that the company must
account for in its business plans in order to stay competitive against food service firms like
Dunkin', Tim Hortons, and McDonald's McCafé, as well as consumer items like Kraft Heinz's
Maxwell House and J.M. Smucker's Folgers.

Politic Factors

Market integration and disintegration provide opportunities and risks to Starbucks and its
global expansion. While integration helps the coffee house company penetrate the local
market (opportunity), disintegration causes obstacles (risk) to its expansion. Furthermore,
government laws aimed at improving infrastructure allow Starbucks to reach out to more
customers and suppliers. However, regulatory red tap still exists in many countries. This
political external factor poses a concern because it obstructs the espresso company's
economic progress, potentially favouring local competition with strong political ties. As a
result, this section of the PESTEL/PESTLE analysis not only identifies opportunities for
Starbucks Coffee but also considers political barriers to growth.

Economy Factors

Starbucks can benefit from increased sales from a variety of marketplaces around the world
as the number of developing countries grows and the rate of unemployment falls. However,
rising labour costs in developing countries are an external threat to Starbucks, as it will
increase the company's ingredient spending. Many of the company's espresso beans are
reassessed from developing countries. As a result, even though delivery balance may be a
concern, this aspect of the PESTEL/PESTLE review frequently provides opportunities for
Starbucks Coffee.

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Social Factors

Starbucks has the potential to increase its sales-based entirely on the increased demand for
strong point coffee, which is due to a growing coffee counterculture and growing centre
elegance populations over the world. Additionally, the company might expand its range of
nutritious products to attract health-conscious clients to its coffeehouses and products.
Despite these advantages, Starbucks faces risks from independent coffeehouse acts, which
could be sociocultural actions that favour tiny independent coffeehouses over large
multinational franchises. This threat is also identified within Starbucks Corporation's SWOT
Analysis. As a result, the social outside aspects of this PESTEL/PESTLE evaluation offer
opportunities, but also an acceptable risk that could reduce the coffeehouse chain's sales.

Technology Factors

Starbucks has the ability to improve its mobile apps and connected products to increase
mobile sales. The company can also improve its supply chain performance by utilising the
most recent technology used by espresso farmers. However, the increasing availability of
home-use speciality espresso machines represents a threat to Starbucks by increasing the
availability of replacements for the company's products. As a result, the technical outside
factors in this PESTEL/PESTLE analysis point to the importance of Starbucks products that
effectively compete while addressing new and emerging technology that affects the sector.

Ecologist Factors

Starbucks may improve its sustainability standards and implementations by taking advantage
of the expanding availability of sustainable commercial enterprise methods. This upgrade will
strengthen the company's logo image and gain more customers for its food and beverages.
Accountable sourcing, which includes Starbucks' supply chain, stresses corporate social
responsibility. In those areas, the coffee company has opportunities to improve its overall
performance. The company may maintain and improve its present responsible sourcing
standards, which include coffee distribution and purchasing. Starbucks may also innovate to
make their products more environmentally friendly. For example, the company could expand
its use of recyclable materials for packaging food and other products. As a result, the

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ecological parts of this PESTEL/PESTLE evaluation show prospects for upgrading
Starbucks' corporate image based entirely on the company's ecological impact.

Legal Factors

Starbucks has the capacity to boost its overall performance by implementing pleasant product
protection measures. Likewise, the company can improve its delivery chain to accommodate
standards governing materials from genetically modified organisms (GMOs). Starbucks is
currently performing well in several areas, but improvements can help boost total enterprise
performance. Furthermore, employment regulations, particularly in developing nations,
represent a threat to Starbucks Coffee's access to the labour market and affordable coffee
beans. This external factor has an impact on the coffee industry through increased human
resource spending. However, the company can implement new methods to improve human
resource management.

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4.0 SCENARIO OF STARBUCKS IN UNITED STATES

Starbucks has grown from a small coffee bean business in Seattle to a worldwide coffee
powerhouse. In late August 2021, there were 14,944 Starbucks outlets in the United States.
Given US present population, this equal to one Starbucks for every 22,313 individuals in the
United States. However, depending on which part of America, Starbucks unit numbers and
per capita coverage can both fluctuate significantly. According to Vine Pair statistics,
California seems to have the most Starbucks locations. It is now having 2,959 outlets, while
Texas has the second greatest total of 1,215 outlets, which does not seem to come near. With
786 Starbucks stores, Florida comes in third rank, followed by Washington, where the
company was started Last but not least, New York ranked sixth with 643 Starbucks locations
in United States. This data shown proves that Starbucks have been successfully survive and
sustain in United States up until year 2021.

Since about January 2, 2022, Starbucks has 34,317 open outlets worldwide including little
under 17,000 in the United States. Starbucks has long struggled to increase the number of
consumers who visit its cafés in the United States. While revenues have increased, the
number of customer visits has stagnated in the beginning. But now, it can be said that people
are obsessed with this coffee house. It has been so successful because it has been able to
deliver an experience that has transformed the way the world views coffee shops and how
many of us consume coffee outside of our homes. Starbucks has created a space in between
home and work where people can chill, have a cup of coffee, and absorb in the appealing
atmosphere.

However, great expansion has not come without challenges. Back to the year 2020, where the
Covid-19 outbreaks happen, Starbucks is one of the many businesses that faced downsides.
Starbucks expects to lose income in the third quarter of its fiscal year, with the covid-19
outbreak costing the company up to $3.2 billion in revenue. The company were to operates
with modified hours of its store operation since May 2020. In the same month, the same-store
sales in the United States fell by 43%. After a while, majority of the closed sites in the United
States have reopened, with the most of them in the New York City region. However,
Starbucks was compelled to change its cafes to drive-thru or pick-up only after the COVID-
19 pandemic essentially stopped eating out in most of the United States for weeks.

Year 2021 has become the turning point for Starbucks in United States. Now that the
pandemic has been resolved, the company normal routines has begun. Same-store sales in the

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United States increased by 12% as customers spent more per order and revisited more
regularly and its active loyalty programme participation increased by 17% to 26.7 million
customers. But there are a few pandemic patterns remain unchanged such as drive thru and
mobile ordering. Also, Starbucks released its profits one day after raising wages for its US
employees. Workers at the company's U.S. stores will earn at least $15 per hour, with the
possibility of earning up to $23. Employees who have been with Starbucks for at least two
years are also getting increases of wages. Starbucks in United States continue to grow
massively in the post-pandemic era with more stores were set up.

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5.0 CONCLUSION

In conclusion, Starbuck is one of the most successful and well-known companies in the
worldwide and it keeps growing years by years. Not only because it is a coffee house
business, but it delivered an experience that transformed the way many people thought about
coffee shops and how we consume coffee outside of our homes. Starbucks is a brand that
customizes its worldwide product to meet the local and cultural demands of many countries
and people, and it will be able to establish a strong hold on the coffee market as a whole by
expanding into more places and nations. It does not compete with other coffee companies
because it has their own specialty in attracting people. In short, Starbucks has a strong
international business strategy, but it must continue to develop its objectives. Starbucks will
never stop expanding as a company; therefore, it is important to maintain its objectives in
mind and plans precisely in order to tackle any obstacles that may arise. All in all, Starbucks
has successfully navigated organizational and management challenges, establishing itself as a
powerful example for international business. It proves that choosing the right strategy is
crucial for gaining a long-term competitive edge and succeeding in international business.

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