The grid above is the 10 factors that affect the Spread of Innovations. Starbucks’ target market is young people, highly educated, and trend group. The life-style in China also evolves….
There are the known international company that become the competitor for the Starbucks.
There are: Coffee Bean & Tea Leaf
The endurance and popularity of The Bean, as it is affectionately referred to by devotees, can be attributed to the high standards that were established from the beginning. From trend-setting drinks like the World Famous Ice Blended, to the employees who become a part of the communities they work in, The Coffee Bean & Tea Leaf ® has discovered the formula for a successful coffee and tea company.
San Francisco Coffee
The company that serve fresh coffee sourced from the best coffee farms on this green earth and the roast master, uses company to concoct blends and roasts that have the people wringing their hands, anxious for their next hit.
Secret Recipe Cakes & Café offers a friendly and personalised full-service dining experience for customers and incorporates a modern contemporary and vibrant interior concept with comfort ambience, and great food.
It provides a great respite for customers to enjoy good food and quality time with friends, family or associates, after a long day at work.
Old town white coffee
To be Asia Pacific’s leading white coffee brand, providing high quality products to customers globally
All the competitors try to win the demand of the customer who loves to drink coffee. Each company have their own strategy and uniqueness of their product.
THE MACRO AND MICRO ENVIRONMENT THAT AFFECT THE STARBUCKS COMPANY MACRO ENVIRONMENT
For the Starbucks micro and macro environment factor, we can use PESTEL element to evaluate and observed about the Starbucks. The (PEST) element included:
The first factor which shall be kept in mind while studying the macro environment of Starbucks is the political aspect. It has been seen that, Starbucks has significant levels of presence in the coffee market. Starbucks consists of various types of products for government offices, corporate offices. The growth of Starbucks has increased and it means there are lots of demands about the Starbucks Coffee.
However, in certain country, the political try to avoid the Starbuck because some of the countries try to boycott the Israel product. The cases of the boycott make the Starbucks have problem for their expansion of the business. Indirectly, the political of the country will affect the performance and growth of the Starbucks.
Economic factors such as recession which hard a big impact to the different organizations also to the consumer ability to purchase their product due to been unemployed and having debts. The way income is distributed among the individuals impact the marketing activities such as higher income earners, middle and low earners. These economic factors influence marketing segmentation and decisions.
The exchange rate also will affect the Starbucks Company. When the currency decreases their value, it affects the monetary policies. Most of the supplier of the coffee comes from outsider. When the monetary decrease, it will affect the higher cost and the raw material become expensive. Finally, this situation makes the price of the Starbucks become expensive. It’s also become risk for Starbuck in making its coffee with the higher cost.
Social factors that influence marketing decisions are such as demographic factors which is relating to the population where when the population increases creates good opportunity for the marketing activities but if it decreases results to great impact in the market. Age, marketers tend to target their market according to the number of age available in an area.
Behaviour also may influence the marketing decision where by some ethnics may not be able to purchase certain products due religion aspects also due to consumer’s different in taste, style and fashion some may like the products others may find them not attractive.
Another than that, the social also included the changing in culture, taste and health consciousness. The culture of Malaysia who loves the coffee made the demand of Starbucks increase. However, Starbucks also need to learn about the culture among the country. Starbucks is International product and well known. Some of the country most prefers tea compare than coffee. That means , that is one of the challenges for Starbucks to come out with variety of product.
Health consciousness of people also influences company to come out with healthy product for its customers. They need to plan new product that concern about the good healthy. It will provide opportunity to Starbucks to expand its business.
The fourth factor which shall be kept in mind while evaluating the macro environment for Starbucks refers to the technological aspect. Starbucks being one of the reputed coffee houses had a robust distribution strategy which helped them to stay ahead of the competition.
Starbucks try to variety their distribution strategy within use the internet and mobile application. Starbucks launched a mobile payment system. This technological advancement helped the customers to pay while sitting at the store with the help of their smart phones.
Starbucks also launched an I-phone mobile payment application. With this application, the customers would be able to have an access of their favourite Starbucks card application. The use of technology will help the enterprise to break through the various distribution channels & be a step ahead of its immediate competitors.
The micro environment factors are about internal aspect of Starbucks. The micro environment are evaluate using Porter’s 5 forces model). There are about bargaining power of buyer, bargaining power of supplier, threat of substitute product, threat of new entrant and rivalry among competitors.
Rivalry among existing competitors is high within the industry Starbucks operates in with major competitors like San Francisco coffee, Old Town White Coffee, Coffee Bean & Tea Leaf, Dunkin Donuts and thousands of small local coffee shops and cafes.
Starbucks customers possess large amount of bargaining power because there is no and minimal switching cost for customers, and there is an abundance of offers available for them.
The threat of substitute products and services for Starbucks is substantial. Specifically, substitutes for Starbucks Coffee include tea, juices, soft drinks, water and energy drinks, whereas pubs and bars can be highlighted as substitute places for customers to meet someone and spend their times outside of home and work environments.
Starbucks suppliers have high bargaining power due to the fact that the demand for coffee is high in global level and coffee beans can be produced only in certain geographical areas. Moreover, the issues associated with African coffee producers being treated unfairly by multinational companies are being resolved with the efforts of various non-government organizations, and this is contributing to the increasing bargaining power of suppliers.
However, the threat of new entrants to the industry to compete with Starbucks is low, because the market is highly saturated and substantial amount of financial resources associated with buildings and properties are required in order to enter into the industry.