Business Case

WEAKNESS

Entire business rests on the coffee industry where as other competitors, such as Dunkin Donuts have investments in a variety of industries.

Refuses to guarantee that milk, beverages, and baked goods sold in the company's stores do not contain any genetically modified ingredients.

High costs

a) High quality milk

b) Labor costs such as increased health care costs, general market wage levelsand workers compensation.

c) New store openings: - Construction.

PEST ANALYSIS

POLITICAL FACTOR

* Government Stability

Political stability of countries is a main issue that firms need to consider because either indicator may aim to a country as being investor friendly, however that could rapidly change when there is a election or politically instability. This could lead to huge trouble in a firm operations and strategy or in a worst case situation where Starbucks was forced to totally pull out of Israel because of such issues therefor harmfully affecting its strategy for expansion.

Economical Factor

* Exchange Rates

The falling dolor rates compared to other currency which was caused in part by weaker economic policy will affect imports. Most of Starbucks virtual supplies such as coffee beans, sugar and milk will be affected because they are imported, so incurring higher cost due to weak dollar .this raise a question s to whether the company will pass the extra cost to consumer and risk creation its coffee even more costly.

Technical factors

* technological advancements have never been so fast, hence firms need to consistentently follow the trends and exploit any opportunities that may result and implement any change required.for example ,starbucks have embraced the new phone payments system that was introduced recently which helps cut long queues at peak time.