(Housing Industry Association, 2011). .
This essay sheds light on the use of the PESTLE analysis by Starbucks Corporation. It focuses on what Starbucks perceive to be important factors in its growth and hence draws first hand information from its annual reports. Starbucks is the world's largest coffee shop chain, with over 20,000 stores in 62 countries (Loxcel Starbucks Map, 2013). Starbucks has a very aggressive expansion policy; in the 2007 fiscal year alone it opened 1,342 new stores worldwide (Starbucks 2007 Annual Report). It expands into new countries very often, and is always evolving its production procedures and business activities. The PESTLE analysis plays an important role in such situations. .
Before venturing into a new country, Starbucks judges the political climate of the country. One of the main things considered, is the political stability of the country. Changes in government leads to changes in policies affecting the firm or industry, and unfavourable government policies can hinder the growth and success of the firm. Common occurrences of such policies are high taxation by new governments, or increasing costs of coffee beans. "In September 2007, prices moved sharply higher as poor weather led to decreased expectations for the next harvest in the world's largest 'arabica' coffee producer, Brazil". Therefore, prices were increased by 10%. Because of this increase in price, Starbucks devised a new business strategy to purchase commodities at fixed prices. Pre-mature agreements were drafted with suppliers regarding the quality, quantity and delivery periods of the coffee beans in order to combat the issue of rapidly increasing prices (Starbucks 2007 Annual Report). The trade relationship between countries can also greatly affect the business of Starbucks. Because Starbucks and other large companies are so dependent on imports and exports, trade relations and agreement between the concerned countries play a vital role in the performance of the company.