Question

The assignment is based on the case study “Starbucks’ Strategy in the Specialty Coffee Market”.

QUESTION 1: [30] Starbucks is planning on opening more stores in South Africa. You are requested to do an analysis of the South African macro environment and Starbuck’s market environment to assist Starbucks in making the decision if it is viable for them to do business in South Africa. You can use any method or approach (i.e. PESTEL, scenario planning, Porter’s Five Forces model) to obtain the information that you will put in the report on what the external environment looks like.

Answer 1

Name of the organization - Starbucks
Target market - south Africa
Product - specialty coffee market

Latest consider the Macro environmental factors of South Africa
PESTEL analysis
P- political
E- economical
S-Social
T-Technological
E-Environmental
L-Legal

Political
The marketing plan of the organization depends on the government interventions and its policies
The government can pay off some taxes industrial taxes if they want any foreign funding to their country
South Africa has sound government policies speeches promoting foreign investment in their own country

South Africa is a good country for supporting for and businesses and also their government is supportive for new business startups so starting new outlets in South African territory will be having no political interventions

Economic factors

Any organization growth depends on the economic factors of that country
Economical factors -, taxation policies, exchange rate.,Interest rate economic growth

South African Government have given tax concessions to the industries
Starbucks will be going to have the tax benefits while installing outlets in the South African market

South African country is a developing country so the economic growth is consistently good and performing better in every cycle of the year so the Starbucks having a positive economic background in South Africa

Social factors
Social factors are the beliefs and attitudes of the people around themselves
These factors help to understand the customers' point of view towards
Organization

Technological
Which organization need technological support while doing any business in a particular country proper infrastructure is needed
- production
- distributions
South Africa have decent infrastructure development which promotes Marshallbusinesses they have good road connections to the city and metro cities

environmental
Any country wants sustainable growth and they want don't want to compromise is a growth against environmental pollution
South Africa have stringent norms regarding the pollutions control
So unless a Starbucks have any process by which day don't harm to the environment if there is no disturbance in the operation and starting outlets in Africa

Porter's Five force model

Bargaining power of supplier
When organizations have a limited number of suppliers the bargaining power is in the hands of supplies but not in the hands of the company
Starbucks have their own franchise model so they don't have any issues regarding to supply

Bargaining power of buyers
Barwani power is always on the ends of the customers unless and until Starbucks charges nominal prices for their products South African economy and population don't create trouble to Starbucks
To study the current economic pattern and spending pattern of individuals in order to fix the rates and prices of the copies and their valuable products

Competition
Competition plays an important role while the progress of any business
Light bleedingSouth Africa is a developing Nations so which attracts many foreign investors for the funding San investment in Africa
Net cafe and other international players, as well as local players, are the key competitors for Starbucks

Threats of new entrants
All organizations face this threat of new entrants.
Whenever new company brings good quality valuable products to market people will prefer it and there would be a negative downfall of growth organization
This thread can be solved by creating good and values and customer loyalty by providing quality products

Threats of substitute
Old product is always replaced by new and advance product this is called the threat of substitute
When people find a good product then a coffee then definitely De will switch to a new product and this is a threat to each and every company in the industries