PESTLE analysis is a method used to understand how the external macro environment

PESTLE analysis is a method used to understand how the external macro environment, such as national specific can affect a business. PESTLE stands for Political, Economic, Social-Cultural, Technological, Legal and Environmental. It is necessary to review how the country external macro environment can affect the operation.

Political factor
One of the political factors that have affected Starbucks directly is the sourcing of its raw material. The sourcing of raw material has drawn a lot of attention from the source countries and the politicians in the West. For this reason, Starbucks needs to adhere to social and environmental norms and to follow the sourcing strategies that are appropriate and in conformance to the “Fair Trade” practices that have been agreed upon by global corporations and the governments of the developing and the developed countries.

Besides that, Starbucks have to adhere to the rules and regulations by Agri-Food & Veterinary Authority of Singapore (AVA) for importing its raw material.

Tax policies in the country are part of the political factor. As Starbucks was being the No.1 choice in Singapore, their annual gross profits should be high. The tax submission every year to the government can affect the overall profits made by Starbucks.

Economic factor
The performance of the business will be affected by a country economic status. A higher GDP will result in higher living standard, which also brings up the affordability to spend more by the people. Therefore, it will benefit the company in term of the earning. Another important factor is the inflation rate. When the rate is high, the willingness to spend more will be reduced. The inflation rate in Singapore is considering moderate as compared to other country and businesses can use this aspect as an opportunity.

Social-Cultural factor
Singapore is rated as one of the high living standards in Asia. The quality of life has always been improving. Due to the different consumer behaviours in Singapore, Starbucks is providing a concept that suits their culture which is different from Starbucks in other countries.

Nowadays, Singaporeans are being increasingly health conscious. This aspect is an important factor for the success in Singapore as they have to maintain the high standard quality of product and the health benefits that it can provide to the consumer. The population has been growing and this will increase the number of purchase. As Singapore is also a multi-culture country, they will need to cater to the country taste of flavor.

Technological factor
As technological is changing how the world work, the business will need to make use of the technological that’s available in Singapore to help the business grow. Starbucks Singapore has introduced a “Card On App” functions. By installing the Starbucks App on the phone, consumers can reload a value via the App and simply tap and pay in the Starbucks store counter. It is more convenient for the consumer as they do not need the bring out any cash money or cards.

Nowadays, the internet is very important to all the people. Hence, Starbucks Singapore has now provided a free Wi-fi capability in its outlet. The consumers can do their works while enjoying Starbucks coffee.

Legal factor
Starbucks must ensure that they are Not violate any laws and regulations. As Starbucks have more 130 stores in Singapore, many legal compliances must adhere to such as importing of materials, licence, labour laws, company tax policy and etc.

A violating of laws and regulations may cause the company face to financial loss, even company close down.

Environmental factor
Nowadays, government and people are favoring to the brands or product that beneficial to the environment. A responsible environmentally brand can help to build the loyalty of consumers.

Hence, Starbucks has also made an investment in environmental initiatives.

Consumers can make a difference in saving the environment with every coffee run at Starbucks.

Here are 5 ways that consumers can go green at Starbucks.
• Cut down on paper bags – Consumers can bring their own paper bags or reuse the take away paper bags on the next visit to Starbucks.

• From grounds to garden – Starbucks has brew lots of coffee daily, for those consumers with green fingers, they can connect with Starbucks store manager and keep for them the used coffee grinds as their fertilization of soil.

• Bring your own tumbler – Consumers can bring their own Starbucks tumbler to fill their drinks when visiting Starbucks and enjoy $0.50 off with every drink.

• For here or to go? – Consumers can let the staff know whether they “having here” or “take away”. It can help to reduce the use of paper bag and plastic cup.

• Take only what you need – Consumers can also be an environmental supporter. They can help to reduce the wastage by taking enough what they need such as straws, napkins and etc.