Starbucks External Environmental Analysis

However, due to the current market changes and for future productivity, the company needs to carry out regular environmental analyses both internally and externally. The following essay includes a STEEP analysis, Porter’s 5 forces analysis and a competitor’s analysis for the company. These analyses are factors of the external environment of the same. STEEP analysis A steep analysis refers to a tool used by analysts mainly in the marketing department to evaluate and analyze external factors of an organization (PAC 2015). The tool consists of five factors namely: Social, Technological, Economic, Environmental and Political developments of an organization. However due to the ongoing economic decline people tend to incline more to cheaper coffee options. This problem can however be fixed by the company producing affordable products in exchange for quality.

Inflation and high costs of operation are also factors that could affect the company’s productivity. The environmental aspect Recently, there has been a worldwide environmental protection wave that has forced the impartment of environmental regulations and rules. The rise of conservation activism has shed a light on management of wastes such as plastic through recycling among others. The coffee industry is less competitive in this aspect. The drinks industry has relatively high supplier power with a majority of the companies sourcing their raw materials from other countries. Raw materials for substitute products such as tea are also readily available which makes it a very competitive industry. Switching to alternative materials is relatively expensive but profitable as tried by Starbucks with soft drinks and tea in.