Mba 580 Starbucks Environmental Analysis Paper

Environmental Analysis Paper

Macroeconomic Forecast

The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Financial release, 2007). Starbucks Corporation has established by purchasing high quality coffee beans and sells the customers along with a variety a specialty drinks and food that has met with an ever-increasing amount of success.

Starbucks have succeeded several economic factors as well as price elasticity of demand. Price elasticity of demand can be determined by the percentage change in the quantity demanded with the percentage change in price. They should consider household income that people are willing to spend more on food and beverages when household income increases. Starbucks innovation in joint ventures has opened new markets and opportunities increasing product use among different demographics. Starbucks has proven to be highly innovative in business culture that offers prepaid cards, priced from $5 to $500. Joint ventures with Pepsi Company, Dreyer's Grand Ice Cream Inc and inspiring entertainment with the launch of “Hear Music” have developed Starbucks with great success. Starbucks has shown their values, leveraging market power, resources, and capabilities to achieve returns higher than their competition (Investment Group, 2001).

Social and Culture

The social factors that affect Starbucks involve the beliefs, values, attitudes, opinions and lifestyles of persons in the external environment as developed from cultural, demographic, education, ethnic conditioning and customers’ needs and the size of the potential market (Pearce-Robinson, 2004). Starbuck’s approach to corporate social responsibility (CSR) includes developing “ethical sourcing practices for products such as coffee and cocoa, strengthening their involvement in education programs focused on cultural diversity globally, funding water projects in developing countries, and reducing our environmental footprint” (Starbucks Corporation, 2007). They treat employees as the most valuable asset for the company and empower to make decisions. They continue to sustain the values of personal dignity, mutual respect, shared success and diverse workforce culture in the organization. In addition, they focus on ethical sourcing that offers affordable loans for farmers, sustainable farm management practices, the prohibition of forced child labor, and economic transparency to increase their value chain (Starbucks Company Profile, 2007).

Starbucks in local stores created an environment accommodation that customers can use free wireless internet usage to increase more customers. Schultz believes that “Operating with a social conscience has always been a core purpose and competency at Starbucks.” So, they involved a corporate social responsibility and contributed US $5 million in the establishment of china educational project in 2005. They built executive community leadership program to facilitate Starbucks executives’ service on non-profit boards and building community to support neighborhood organizations ((Starbucks CSR Report, 2007). To create a great work environment, Starbucks supports network in place, two-way communication channels and promote a respectful workplace culture.

One of many Starbucks environmental efforts included Global Green's plan educate individuals, stakeholders, businesses, and governments how they can take action to address climate change. They conducted an inventory of GHG emissions as an effort to better understand and quantify their environmental footprint. They have used the “World Resources Institute Greenhouse Gas Protocol” to perform the inventory of major emissions from the company-operated retail stores, coffee roasting, administrative operations and distribution network. They have been working the risks of climate change for their business and reduce GHG emissions (Starbucks Environment Affairs, 2007).

Political and Legal Issues

Starbucks committed safety environments to reduce the risk of injuries for their partners and customers. They have completed anti-slip floor mats in California company-operated stores to address workforce safety issues and introduced new digital brewing equipment and

automated espresso machines to reduce the risk of burns for employees. Starbucks