PROJECT OF BUSINESS ENVIRONMENT ON

SLEPT ANALYSIS FOR A FIRM

SUBMITTED TO: SUBMITTED BY:

DR. AJAY VERMA PRIYAL SARRAF
JALPA MADEKA
PURVI SHARMA
AISHA KUKHRANIA
AARTI PAWAR
MANISHA JOSHI

(GROUP 4)
STARBUCKS

"STARBUCKS
REPRESENTS
SOMETHING BEYOND

A CUP OF COFFEE"
COMPANY OVERVIEW

NAME : STARBUCKS CORPORATION

HEADQUARTERS : SEATLE, WASHINGHTON,

U.S.

EMPLOYEES : 176000 IN 2008

CEO: HOWARD SCHULTZ (FOUNDER OF

STARBUCKS COFFEEHOUSE)
COMPANY PROFILE

 Starbucks Corporation is a largest international

coffeehouse company with 16,120 stores in 49
countries, including around 11,000 in the United
States, followed by nearly 1,000 in Canada and more
than 800 in Japan
 Starbucks sells drip brewed coffee, espresso-based
hot drinks, other hot and cold drinks, snacks, and
items such as mugs and coffee beans
 Many of the company’s product are seasonal or
specific to the locality of the store
 Starbucks Italian style coffee, espresso beverages,
teas, pastries and confections had made Starbucks
one of the greatest retailing stories of recent history
and world’s biggest specialty coffee chain
STARBUCKS VISION STATEMENT
 “To establish Starbucks as the most recognized and
respected brand in the world and become a national
company with values and guided principles that
employee could be proud of”

STARBUCKS OBJECTIVES
 Is to grow by making employees feel valued
 Is to recognize that every dollar earned passes
through employees’ hand
 Use the pays, benefits and opportunities for
personal development to help gain employee loyalty
and become difficult to imitate.
STARBUCKS MISSION STATEMENT
“Establish Starbucks as the premier purveyor of the
finest coffee in the world while maintaining our
uncompromising principles while we grow.”
The six principles are:
1. Provide a great work environment and treat each
other with respect and dignity
2. Embrace diversity as an essential component in the
way we do business.
3. Apply the highest standards of excellence to the
purchasing, roasting and fresh delivery of our coffee.
4. Develop enthusiastically satisfied customers all of
the time
5. Contribute positively to our communities and our
environment
6. Recognize that profitability is essential to our future
success.
STARBUCKS IN INDIA
 Tata Global Beverages vice chairman R K
Krishna Kumar had announced plans to
open 50 cafes in the country in 2012,
entailing an investment of Rs 400 crore
 Tata Starbucks Ltd, the 50:50 joint venture
between Starbucks Coffee Company and
Tata Global Beverages Ltd. launched the
latest outlet at Select City Walk Mall.
 Starbucks had entered the Indian market in
October 2012 and currently operates five
stores in Mumbai and four outlets in New
Delhi.
CORE COMPETENCIES
 Human Resources
Employee/Company culture
Starbucks values its employees, and shows this
through employee benefits
 Employee training program

 Tangible resources
Coffee beans
Example :- They have sole ownership of
the Narino Supremo beans, which is considered
to be oneof the highest quality coffee beans in
the world

 Intangible resources
 Perception/Reputation of quality (beans,
company name, etc)
 Largest and best known of coffee house chains
INTRODUCTION OF SLEPT ANANLYSIS
 SLEPT analysis is a framework to assess the external
environment of an organization that have an
influence on it.
 It considers five factors affecting the macro
environment – Social, Legal, Economic, Political and
Technological
 SLEPT helps to identify and take advantage by
maximizing opportunities and minimizing threats.
 It give an understanding of the broad and long term
trends and makes the firm in a better position for
strategic decision making
 Social factors: Includes education level, population
growth rate, sex distribution, social classes etc
 Legal factors: Includes laws such as anti-trust law,
intellectual property laws, consumer protection
laws, employment laws, regulatory mechanism etc
 Economic factors: Include growth rates, inflation
rates, interest rates, exchange rates, fiscal policies,
monetary policies, credit availability etc
 Political factors: Includes government policies and
intervention in the economy such as corruption
level, government stability, competition regulation,
involvement in trade unions, consumer protection
laws, employment laws etc
 Technological factors: Includes technological aspects
such as R&D activity, technology incentives, rate of
technological change, infrastructure level, access to
technology etc.
SLEPT ANALYSIS OF STARBUCKS
 Starbucks Coffee’s industry leadership is linked to
the company’s effectiveness in addressing external
factors identified in this SLEPT analysis
 The SLEPT analysis model is used to determine the
most important issues that Starbucks must address
in its business strategies
SOCIAL FACTORS
This aspect of the Slept analysis framework shows the
social conditions and trends influencing consumers and
business.

Starbucks must address the following social/socio-

cultural external factors in its remote/macro-
environment:

1. Growing coffee culture (opportunity)

2. Increasing health consciousness (opportunity)
3. Growing middle class (opportunity)

 Though Starbucks can offer cheaper

alternatives as mentioned previously, it has to
do so without sacrificing the quality

 This is the key socio cultural challenge that the

company faces as it expands its consumer base
 to include the consumers from the lower and
the middle tiers of the income pyramid
 Apart from this, the “green” and the “ethical
chic” consumers who fret about the social and
environmental costs of the brands they
consumer means that Starbucks has to be
cognizant of this trend

Starbucks has opportunity to increase its revenues

based on increasing demand for specialty coffee,
which is due to a growing coffee culture and a
growing middle class around the world.

Also, the company has the opportunity to widen its

array of more healthful products to attract health-
conscious consumers to Starbucks cafés
LEGAL FACTORS

The legal factors in the Slept analysis model are the

laws and regulations on business. Starbucks must
address the following legal external factors in its
remote/macro-environment:
In this part of the PESTEL/PESTLE analysis model,
technologies and related trends are identified.
Starbucks experiences the following technological
external factors in its remote/macro-environment:

1. Rising mobile purchases (opportunity)

2. Technology transfers to coffee farmers
(opportunity)
3. Rising availability of specialty coffee machines for
home use (threat)
  Starbucks has to ensure that it does not run
afoul of the laws and regulations in the
countries from which it sources its raw
materials as well as the home markets in the
United States

Starbucks has opportunities to improve its

performance by satisfying product safety
regulations and regulations on ingredients from
genetically modified organisms (GMOs).

Starbucks is already performing well in these

aspects.

However, increasing employment regulation,

especially in developing countries, threatens
Starbucks Coffee’s access to the labor market.

This external factor also impacts Starbucks through

increased spending for human resources
ECONOMIC FACTORS

This component of the Slept analysis model refers

to the economic conditions and changes significant
to business. Starbucks faces the following economic
external factors in its remote or macro-
environment:

1. High growth of developing countries (opportunity)

2. Declining unemployment rates (opportunity)
3. Rising labor cost in suppliers’ countries (threat)

 The foremost external economic driver for

Starbucks is the ongoing global economic
recession, which as explained in the
introduction has dented the profitability of
many companies.

 However, studies have shown that consumers

instead of cutting down on their coffee
 consumption are shifting to lower priced
alternatives which is an opportunity for
Starbucks.

 Of course, the company still has to contend

with rising operational and labor costs as the
inflationary macroeconomic environment
coupled with the falling profitability is
squeezing the company from both ends of the
spectrum

The high economic growth of developing countries

and the declining unemployment rates create
opportunities for Starbucks to gain more revenues
from various markets around the world.
However, the rising labor cost in developing
countries is an external factor that threatens
Starbucks because it increases the company’s
spending for ingredients.
 POLITICAL FACTORS
This part of the Slept analysis framework identifies
the impact of governments on business. Starbucks
experiences the following political external factors
in its remote/macro-environment:

1. Regional integration of markets (opportunity)

2. Improving governmental support for
infrastructure (opportunity)
3. Bureaucratic red tape in developing countries
(threat)

 The key political imperative that Starbucks faces

is the concerns over sourcing of its raw
materials that has attracted the attention of the
politiciansin the West and in the countries from
where it sources its raw materials.
 This is the reason why Starbucks is keen on
adhering to social and environmental norms
and to follow sourcing strategies that are
appropriate and in conformance to the “Fair
Trade” practices that have been agreed upon by
global corporations and the governments of the
developing and the developed countries.

 The other political imperative that Starbucks

faces is the need to adhere to the laws and
regulations in the countries from where it
sources its raw materials. This has been
necessitated because of activism and increased
political awareness in the developing countries,
which form the basis for Starbucks’ sourcing
strategies
  The third political imperative, which Starbucks
faces, is the regulatory pressures within its
home market in the United States because of
greater scrutiny of the business processes that
multinationals based in US are now subject to

Regional integration is a current trend and external

factor that presents an opportunity for Starbucks to
globally expand.

Also, most governments around the world are

improving infrastructure, which creates the
opportunity for Starbucks to access more markets
or suppliers.

However, bureaucratic red tape persists in most

countries. This external factor is a threat because it
makes business expansion more difficult for
Starbucks, especially in developing countries
TECHNOLOGICAL FACTORS

In this part of the Slept analysis model, technologies

and related trends are identified. Starbucks
experiences the following technological external
factors in its remote/macro-environment:

1. Rising mobile purchases (opportunity)

2. Technology transfers to coffee farmers
(opportunity)
3. Rising availability of specialty coffee machines for
home use (threat)

 Starbucks is well poised to reap the benefits of

the emerging mobile wave and as it has tied up
with Apple to introduce app based discount
coupons, it can expect to ride the mobile wave
with ease
  The company has already introduced Wi-Fi
capabilities in its outlets so that consumers can
surf the web and do their work while sipping
coffee

 This is indeed an added value to the Starbucks

brand and something, which enhances the
consumer experience

Starbucks has the opportunity to improve its mobile

apps and linked services to gain more revenues
through mobile purchases.
The company also has the opportunity to improve
its supply chain efficiency based on new
technologies coffee farmers use.
However, the rising availability of home-use
specialty coffee machines is a threat to Starbucks
because it increases the availability of substitutes to
Starbucks products.
RECOMMENDATIONS BASED ON SLEPT
ANALYSIS

 This SLEPT analysis shows that most of the

external factors in Starbucks Coffee’s
remote/macro-environment present
opportunities.

 However, the company must work to address

the identified threats, especially the threat of
substitution linked to the increased availability
of home-use specialty coffee machines.

 On the other hand, Starbucks cannot do much

but to avoid the threat of bureaucratic red tape.

 Overall, the SLEPT analysis framework indicates

that Starbucks Coffee has plenty of room for
further global growth
CONCLUSION

 The preceding analysis proves the point that

Starbucks is operating in a relatively stable
external environment.
 The main reason for this is the fact that it
operates in the Food and Beverages space
which means that despite the recession,
consumers cut down on the consumption to a
certain extent and not completely.
 Thus, this aspect of the Slept analysis
framework presents mostly opportunities for
Starbucks Coffee
 Therefore, the task before Starbucks is to lower
costs and increase the value so that it retains its
consumer base and attracts consumer loyalty.