There are 76 Starbucks stores in Singapore as of November 2011, increased from 65 stores in 2009. SB international net revenue was $717.9 million, increased by 16% compared to Year 2010. The consolidated net revenue in 2011 was $11.7billion, an increase of 9% from last year. The Singapore government forecast that economic growth will probably drop to between 1 percent and 3 percent in 2012 from 5 percent this year. In order to ensure consumers continue to make sustainable choices, Starbucks needs to make sure that their sustainable products are high performing and cost efficient. For Starbucks, sustainable development means adopting business strategies and activities to meet needs of the Starbucks and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. The PEST analysis given below provides the information of coffee industry’s current situation, problems and opportunities which Starbucks respond effectively in relations to the changes of the marco environment. Economic
The economic segment is characterized by the general economic conditions in the non-controllable environment that the coffee industry operates in Singapore. Rents of retail spaces in Singapore continue to increase in the recent years. According to Department of Statistics Singapore, Year 2011 shows an increase in disposable income per capita. However, going forward, the economic outlook looks more uncertain, economists are not ruling out a technical recession for Singapore. Political
Singapore provides a friendly business environment to Starbucks due to its political stability. Government is encouraging entrepreneurship and also an open market that welcome all foreign investors. Starbucks is required to comply with the rules and regulations by Agri-Food & Veterinary Authority of Singapore (AVA) for importing their coffee beans. Social
The social factors focused on how the consumers exert forces on the industry and how the firms do business. Starbucks committed to address concerns about the social responsibility of the industry to perpetuate sustainability of coffee bean growers. Due to the different consumer behaviours in Singapore, Starbucks here offers an in-house concept that suits their culture which is quite different from Starbucks in other countries. A research done by Nielsen also shows that Singaporeans are becoming increasingly health conscious. Technological
Technological advancements have never been so fast, hence Starbucks need to consistently follow the trends and exploit any opportunities that may result and implement any change required. Developments in the technology of coffee making machines, the computers that Starbucks use to run their cash registers and WIFI speed are some areas Starbucks should focus on. Implications of Assessment
More people are working round the clock in this fast growing economy, this gives Starbucks opportunity to operate 24 hours to gain more market shares. With more disposable income, consumers would choose premium coffee over normal coffee. AVA control on food quality also ensures the high-quality of Starbucks’ coffee beans. Singapore government opened up the market to foreign investors, this would further increase Starbucks level of competition. The rise in retail space put pressure on Starbucks’ pricing strategy and if recession occurs, it will affected both Starbucks with rising operational costs and lower profit margins, and consumers will be more careful on the spending. Starbucks CSR program enhanced their brand equity to increase reliability. Besides offering just coffee, they provide their consumers a lifestyles concept. It has also become a meeting point for white collar executives and study area for students. Health consciousness trend would affect Starbucks future businesses of selling food high in fat and sugar content and what they can do. Given this pressure, Starbucks will need to either reduce sugar...
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