External and Internal Analysis 8 External and Internal Environmental Analysis STR/581 Professor Alfonso Rodriguez July 30, 2014 Sheila Medina Introduction Coffee has become an integral part of the lives of numerous people. In 1971, Starbucks coffee opened its first coffee shop in the Pike Place Market in Seattle, Washington. Now, according to research “Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world, with more than 6,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim” (www.investor.starbucks.com). Starbucks aims to be the consumer’s favorite coffee shop and to achieve this the company focused on customer satisfaction as well as company advancement. Therefore, it is important to act based on what is written in Starbucks mission, value and vision statement, “To inspire and nurture the human spirit-one person, one cup, and one neighborhood at a time” (www.starbucks.com). A review of Starbucks financial reports has identified an increase in revenue over the past few years. However, this increase in revenue doesn’t account for the increase in profits. The profit increase is not as high as it could be due to external factors such as other coffee shops and the increase in amount of competition. This report aims to identify the different internal and external environment factors attributing to the changes in Starbucks external environment by utilizing several different analyses. SWOT Analysis Strengths Starbucks possesses several main strengths including their high visibility being located in high traffic areas, quality of service and products and their established brand loyalty. Starbucks remains an established leader being the number one known coffee house in the world while possessing a competent workforce, providing quality service, and continuing financial soundness. They also are known for their strong internal and external relationships with their suppliers. Weakness Weaknesses that Starbucks must address include: Product affordability and pricing, coffee beans price is the major influence over the firms profits, maintaining the positive public opinion of their products, avoiding any negative publicity, and remaining connected to their customers. Starbucks must also consider the fact they have expanded domestically and internationally resulting in saturation of the markets. They are also a non-smoking facility alienating some customers from purchasing coffee or other products from their store. Opportunities Opportunities include the ability for Starbucks to enter into different and new markets, partnership opportunities with businesses, growing acceptance and customer satisfaction, and increase different product offerings. Starbucks must strive to continue expanding their products and food service to remain competitive and reach other consumers. Another option would be for Starbucks to allow consumers to order t ...

1. External and Internal Analysis 8
External and Internal Environmental Analysis
STR/581
Professor Alfonso Rodriguez
July 30, 2014
Sheila Medina
Introduction
Coffee has become an integral part of the lives of numerous
people. In 1971, Starbucks coffee opened its first coffee shop
in the Pike Place Market in Seattle, Washington. Now,
according to research “Starbucks Corporation is the leading
retailer, roaster and brand of specialty coffee in the world, with
more than 6,000 retail locations in North America, Latin
America, Europe, the Middle East and the Pacific Rim”

2. (www.investor.starbucks.com). Starbucks aims to be the
consumer’s favorite coffee shop and to achieve this the
company focused on customer satisfaction as well as company
advancement. Therefore, it is important to act based on what is
written in Starbucks mission, value and vision statement, “To
inspire and nurture the human spirit-one person, one cup, and
one neighborhood at a time” (www.starbucks.com).
A review of Starbucks financial reports has identified an
increase in revenue over the past few years. However, this
increase in revenue doesn’t account for the increase in profits.
The profit increase is not as high as it could be due to external
factors such as other coffee shops and the increase in amount of
competition. This report aims to identify the different internal
and external environment factors attributing to the changes in
Starbucks external environment by utilizing several different
analyses.
SWOT Analysis
Strengths
Starbucks possesses several main strengths including their high
visibility being located in high traffic areas, quality of service
and products and their established brand loyalty. Starbucks
remains an established leader being the number one known
coffee house in the world while possessing a competent
workforce, providing quality service, and continuing financial
soundness. They also are known for their strong internal and
external relationships with their suppliers.
Weakness
Weaknesses that Starbucks must address include: Product
affordability and pricing, coffee beans price is the major
influence over the firms profits, maintaining the positive public
opinion of their products, avoiding any negative publicity, and
remaining connected to their customers. Starbucks must also
consider the fact they have expanded domestically and
internationally resulting in saturation of the markets. They are
also a non-smoking facility alienating some customers from
purchasing coffee or other products from their store.

3. Opportunities
Opportunities include the ability for Starbucks to enter into
different and new markets,
partnership opportunities with businesses, growing acceptance
and customer satisfaction, and increase different product
offerings. Starbucks must strive to continue expanding their
products and food service to remain competitive and reach other
consumers. Another option would be for Starbucks to allow
consumers to order their products online and afterwards pick it
up at their stores.
Threats
Threats that Starbucks might encounter include strong
competition (expansion of product offerings by other coffee
shops), vulnerability to economic change, disruptions in supply,
saturated markets in the developed economies, the trend of
consumers changing to a healthier lifestyle, rising prices of
coffee beans and dairy products, as well as the new products
innovation from their competitors.
PESTLE Analysis
A Political, Economical, Social, Technological, Legal, and
Environmental (PESTLE) Analysis is typically used by
organizations as an aid to assist them to understand and analyze
the impacts of external factors on a organization/company they
operate now and will operate in the future.
Political
From a political standpoint, political stability is needed
throughout regions where coffee in generated as this will impact
Starbucks as farmers are able to produce quality coffee beans.
Strabucks needs to ensure they remain connected and continue
their relationships between the countries that produce the coffee
beans.
Economic
Inflation rates are growing rapidly around the world, resulting
in probably a decrease in sales of coffee. Slow economic
growth and may result in decrease in buying power of the
consumer, implying decrease in demand for coffee due to the

4. vulnerability to the economic change. Although, Starbucks
remains an established leader in the coffee industry and they
export to several countries they could also be faced with
exchange rates (fluctuating), which could hinder/fluctuate their
overall profits generated. Starbucks is also faced with a
saturated coffee market in which consumers are looking
elsewhere for their coffee purchases.
Socio-Cultural
Coffee plays a significant/integral role in the lives of consumers
all around the world. Drinking coffee has become part of a
social event for consumers both in the business and private
lifestyles of consumers.
Technological
Advanced technology throughout the years has allowed
Starbucks to introduce WIFI and even develop apps to be
downloaded via iTunes. You are now able to remain informed of
all the newest products and store locations throughout the
world. This advanced technology will assist in the emergence
of innovative technology, biotechnological developments,
developments in agriculture, as well as the development of the
research and developmental team.
Legal
Policies and Procedures play a large role in any organization
and may cause restrictions and
even decreased consumption of coffee by the consumer.
Particularly when engaging in policies and procedures set forth
by different health authorities pertaining to caffeine production,
consumption, and the impact on a consumers overall health.
Another aspect of legal pertains to the trade restrictions that
Starbucks might encounter as production of customs are
becoming tougher. Finally, licensing regulations may contribute
to the legal aspects of coffee production.
Environmental
Environmental factors that should be considered consist of
pollution as well as planning permission, environmental rules
and regulations, environmental disasters in countries that are

5. producing the coffee beans, and finally global warming and
other environmental issues in a global level as some countries
may be more stringent than others on the impact that Starbucks
may have on the environment. Starbucks needs to consider all
of these factors addressed in the PESTLE analysis to introduce
their presence in markets not already identified and even to
remain competitive in the markets they have already established
presence in.
Competitive position and possibilities
Starbucks strives to sell the finest, high-quality coffee beans
and serve the finest quality of coffee beverages. They are the
most recognized brand in the coffee area and were ranked 91st
in the best global brands of 2013 (Elder, Lister, & Dauvergne,
2014). They are located in high visibility areas near a variety
of different settings (ie; campuses, malls, downtown, etc.).
Starbucks is also known for their strong social responsibility to
the community. They have made several contributions to
several charities, researches, shelters, etc. In 1991, Starbucks
established a relationship with the international and relief and
developmental organization known as CARE.
Starbucks remains competitive and will continue to have
competitive advantage over their counterparts based on their
reputation, customer loyalty, their branding, ethics, product
differentiation, reputation, location, and even technology
making it difficult and costly for other competitors to imitate.
Starbucks will need to introduce new products to include
organic coffee and decaffeinated lattes. This will satisfy the
growing trend of consumers seeking to live a healthier lifestyle.
The industries demand for high quality coffee products are
driven by price, quality, taste, and attitudes towards health.
The competitive threat for Starbucks will continue to rise due to
the increase in coffee shops entering the market as well as the
quality of coffee beans being used. Large global roasters such
as Nestle, Kraft, Sara Lee and Smuckers “moved into spaces
opened by liberalization to increase their influence over
production” (Elder, Lister, & Dauvergne, 2014, p.78). Today,

6. while roasters continue to dominate market share, more and
more it is retailers such as Starbucks, McDonalds, and Dunkin
Donuts that are driving the market for higher-grade specialty
coffee. This specifically includes coffee that meets “Voluntary,
sustainable production standards to include: Fairtrade, Organic,
Rainforest Alliance, UTz Certified, and CAFÉ Practices”
(Elder, Lister, & Dauvergne, 2014, p.79).
Dunking Donuts is one of Starbucks main competitors as they
sell coffee and donuts and has not started to sell their creamers
in the stores. Although, there is no other specialty coffee shop
that has more stores than Starbucks, there is a chance this could
change. Starbucks has helped Americans turn into Java junkies,
thus making the likelihood of the number of new competitors
high. Starbucks will need to ensure their products remains
different to include the use of coffee beans (such as country of
origin of coffee beans being consumed; changing the coffee
beans along the year and providing information about the coffee
beans being used; producing a wider range of beans from
different countries; flavors, darkness of roast, changing the
packaging being used for the products; and making new product
lines for non-coffee drinkers).
Conclusion
Starbuck’s strives on being known for selling the finest quality
of coffee and other products. However, this could change with
the rapidly growing competition, the economy, and the
consumers’ preference. In order for Starbucks to remain
competitive and stay ahead of the competition that is in the
market, they must develop and expand their products.

7. References:
Elder, S., Lister, S., & Dauvergne, P. (2014). Big Retail and
sustainable coffee: A new
development studies research agenda. Progress in Development
Studies14(1), 77-90.
Pearce, J.A. & Robinson, R.B. (2013). Strategic Management:
Planning for Domestic and
Global Competition (13th ed). New York, NY: McGraw Hill.
Schultz, M. (2013). Starbucks Global Responsibility Report:
Goals and Progress. Retrieved from www.starbucks.com
Unknown (2014) Starbucks Investor Relations. Retrieved from
www.investor.starbucks.com).
Zhang, X. (2011). Communicating Coffee Culture through the
Big Screen: Starbucks in
American Movies. Comparative American Studies, 9(1), 68-84.
CHAPTER 5 Corporations 249
agreed to apply the Chinese censors' blacklist
to its new Chinese search engine. And a con-
gressional investigative committee* has accused
Google, Yahoo, and Cisca of helping, to main-
tain in China "the most sophisticated Internet
control system in the World." In their defense,
the companies ask what good it would do for
them to pull out of the Chinese market. They
contend that if they resist the Chinese govern-
ment and their operations are closed down or
if they choose to leave the country for moral
reasons, they would only deny to ordinary Chi-

8. nese whatever fresh air the Internet, even fil-
tered and censored, can provide in a closed
society. It's more important for them to stay
there, play ball with the government, and do
what they can to push for Internet freedom. As
Yahoo chairman Terry S. Semel puts it: "Part of
our role in any form of media is to get whatever
we can into those countries and to show and
to enable people, slowly, to see the Western
way and what our culture is like, and to learn."
But critics wonder what these companies, when
they are compficit in political repression, are
teaching the Chinese about American values.
Some tech companies are turning to the U.S.
government for help. Bill Gates, for example,
thinks that legislation making it illegal for
American companies to assist in the violation of
human rights overseas would help. A carefully
crafted American anti-repression law would give
Yahoo an answer the next time Chinese offi-
cials demand evidence against cyber-dissidents.
We want to obey your laws, Yahoo officials
could say, but our hands are tied; we can't break
American law. The assumption is that China
would have no choice but to accept this because
it does not want to forgo the advantages of hav-
ing U.S. tech companies operating there.
Still, this doesn't answer the underlying moral
questions. At a November 2007 congressional
hearing, however, a number of lawmakers made
their own moral views perfectly clear. They
lambasted Yahoo, describing the company as
"spineless and irresponsible" and "moral pyg-
mies. " In response, Jerry Yang apologized to the

9. mother of Shi Tao, who attended the hearing.
Still, Yahoo has its defenders. Robert Reich,
for instance, argues that "Yahoo is not a
moral entity" and "its executives have only
one responsibility ... to make money for their
shareholders and, along the way, satisfy their
consumers." And in this case, he thinks, the
key "consumer" is the Chinese government. -
Discussion Questions
1. What moral issues does this controversy
raise? What obligations should Yahoo have
weighed in this situation? Was the company
a "traitor" to its customer, as Liu Xiabo
says?
2. In your view, was Yahoo right or wrong to
assist Chinese authorities? What would you
have done if you were in charge of Yahoo?
3. Is Jerry Yang correct that the company had
"no choice"? Assuming that Yahoo was
legally required to do what it did, does that
justify its conduct morally?
4. Assess the actions of Yahoo and of Micro-
soft, Google, and Cisco from the point of
view of both the narrow and the broader
views of corporate responsibility. What view
of corporate responsibility do you think
these companies hold? Do you think they
see themselves as acting in a morally legiti-
mate and socially responsible way?

10. 5. In light of this case, do you think it makes
sense to talk of a corporation like Yahoo
as a moral agent, or is it only the people in
it who can be properly described as having
moral responsibility?
6. Would American companies do more good
by refusing to cooperate with Chinese
authorities (and risk not being able to do
business in China) or by cooperating and
working gradually to spread Internet free-
dom? In general, under what circumstances
is it permissible for a company to operate in
a repressive country or do business with a
dictatorial regime?
7. Assess the pros and cons of a law forbid-
ding American high-tech companies from
assisting repressive foreign governments.
248 PART TWO American Business and Its Basis
G A S E 5 . 1
Yahoo in China
Shi Tao is a thirty-seven-year-old Chinese
journalist and democracy advocate. Arrested
for leaking state secrets in 2005, he was sen-
tenced to ten years in prison. His crime? Mr.
Shi had disclosed that the Communist Party's
propaganda department had ordered tight
controls for handling the anniversary of the
infamous June 4, 1989, crackdown on dem-
onstrators in Beijing's Tiananmen Square. A

11. sad story, for sure, but it's an all too familiar
one, given China's notoriously poor record
on human rights. What makes Mr. Shi's case
stand out, however, is the fact that he was
arrested and convicted only because the
American company Yahoo revealed his iden-
tity to Chinese authorities.^^
You see, Mr. Shi had posted his information
anonymously on a Chinese-language website
called Democracy Forum, which is based in
New York. Chinese journalists say that Shi's
information, which revealed only routine ins-
tructions on how officials were to dampen
possible protests, was already widely circu-
lated. Still, the Chinese government's elite State
Security Bureau wanted to put its hands on
the culprit behind the anonymous posting.
And for that it needed Yahoo's help in track-
ing down the Internet address from which
[email protected] had accessed his
e-mail. This turned out to be a computer in
Mr. Shi's workplace. Contemporary Business
News in Changsha, China.
A few months after Shi's conviction, the
watchdog group Reporters Without Borders
revealed the story of Yahoo's involvement and
embroiled the company in a squall of contro-
• versy. After initially declining to comment on
the allegation, Yahoo eventually admitted that
it had helped Chinese authorities catch Mr. Shi
and that it had supplied information on other
customers as well. But the company claimed
that it had no choice, that the information was

12. provided as part of a "legal process," and that
the company is obliged to obey the laws of any
country in which it operates. Yahoo cofoundeq
Jerry Yang, said: "I do not like the outcome
of what happens with these things . . . but we
have to comply with the law. That's what you
need to do in business."
Some critics immediately spied a technical
flaw in that argument: The information on
Mr. Shi was provided by Yahoo's subsidiary
in Hong Kong, which has an independent
judiciary and a legal process separate from
that of mainland China. Hong Kong legisla-
tion does not spell out what e-mail service pro-
viders must do when presented with a court
order by mainland authorities. Commenta-
tors pointed out, however, that even if Yahoo
was legally obliged to reveal the informa-
tion, there was a deeper question of principle
involved. As the Financial Times put it in an
editorial: "As a general principle, companies
choosing to operate in a country should be
prepared to obey its laws. When those laws
are so reprehensible that conforming to them
would be unethical, they should be ready
to withdraw from that market." Congres-
sional representative Christopher H. Smith,
a New Jersey Republican and chair of a
House subcommittee on human rights, was
even blunter: "This is about accommodating
a dictatorship. It's outrageous to be com-
plicit in cracking down on dissenters." And
in an open letter to Jerry Yang, the Chinese
dissident Liu Xiabo, who has himself suf-

13. fered censorship, imprisonment, and other
indignities, wrote: "I must tell you that my
indignation at and contempt for you and
your company are not a bit less than my
indignation and contempt for the Commu-
nist regime. . . . Profit makes you dull in
morality. Did it ever occur to you that it is a
shame for you to be considered a Jraitor to
yoiir customer Shi Tao?"
Whether profit is dulling their morahty is
an issue that must be confronted not just by
Yahoo but also by other. Internet-related com-
panies doing business' in China. Microsoft, for
example, recently shut down the MSN Spaces
website of a popular Beijing blogger whose
postings had run afoul of censors. Google has
Week Three Assignment: External and Internal Environmental
Analysis
Week Three Assignment: External and Internal Environmental
Analysis 4
Week Three Assignment: External and Internal Environmental
Analysis
Matthew Olinger
STR/581

14. August 4th, 2014
Alfonso Rodriguez
Introduction
Apple Inc. was first launched into the technology market as a
computer company. In 1976, Steve Jobs and Steve Wozniak
launched Apple Inc. with the mission of reaching a diverse
community globally to market its products. Since that time,
there have been changes in the external environment of the
company that has an impact on the decisions the organization
makes. Apple Inc. has implemented frameworks to assess its
external and internal environment. The company identifies the
specific domains that affect the operations of the company from
the outside. These forces of the organization enable the
operations of the company to be influenced.
External Environmental Factor in the Remote, Industry, and
External Operating Environments
Apple Inc. considers the global market to be of high
importance. Globalization is becoming a criterion for large
organizations to excel above their competition. Apple Inc. needs
managers and executives proactively understanding that if the
company is not globalizing it can leave them behind of the
competition. This can be a tough challenge for Apple because
many U.S. companies have not been successful capturing many
global markets. Apple never focused on capitalizing on the
digital future globally until they made a change in their
strategy. Apple had to realize just how much influence it would
make by expanding its products and service to a global level. It
would help to increase their visibility and marketability
worldwide. Because of the rise in revenue and the need to go
international, specifically in Japan, Apple created a strategic
plan to go forward in the direction of globalization. There are
many companies who market some of the same products as
Apple. If Apple gains a percentage of the digital technology
market in other major countries no other rivalry or new entrants

15. in the market can compete in the next 50 years. Apple Inc. can
take advantage of the global countries that always have Apple
computer stores located. Apple can feed off the success these
stores have as they have remained operational and profitable.
Technology is a continuous development in today’s society and
is an important factor in management. Apple Inc. is a
technology company that profits from the development and
selling of personal computing products and services. Apple
must continue to stay ahead of the competition with their
continuous increase in technology. There are currently many
other companies in the same business as Apple such as
Microsoft and Google, which poses a threat to the company.
Google is a major competitor because of its Android platform
that competes with Apple’s iPhone and Microsoft with its
Windows platform against Apple’s OSX platform (Apple, 2014).
Apple has developed new technologies to create new innovative
products, such as the iPhones and the iPads. These products
have forged and created new technology markets.
Apple’s challenge is with the competitors and rivals that they
are faced with daily. Many companies have computers that they
continue to market such as IBM and Microsoft. These
companies along with other companies try to beat out Apple in
innovation, product performance, and quality of products.
Companies such as Blackberry, Samsung, and Google, just to
name a few are making products to mirror what Apple has
produced. Apple Inc. continues to enhance its products and will
need to improve each year. Apple has continuously enhanced
the iPhone to make it the best product over any other company.
There is word that the iPhone 6 will be released soon with
better quality and updates than the iPhone 5s. Apple continues
to look for ways to make its products better than ever and keep
customers intrigued and looking for more. Apple is also faced
with many companies who try to do product substitutes of its
products. These products have included the Walkman, iPod,
iPad, etc. For specifically, Blackberry and Samsung have
continued to try and compete with the iPhone. Apple has to be

16. pay attention to these products and other companies to ensure
they continue to advance their products as much as possible.
Apple has continued to stay ahead of the competition by
developing new ideas and technology. They must continue to
develop, design, and evaluate the overall success of the
products to determine if it is good enough.
Implementation and planning of a new product to launch to
consumers is crucial to the success of the product and the
company. A strong management team enables a product to be
successful because they understand the industry and what
customers want and need.
Internal Strengths and Weaknesses of Apple
Internal factors will contribute to the growth of Apple’s
success. Innovation, differentiation, competition, and leadership
are factors that can contribute to the success of Apple. Steve
Jobs put Apple in the place where they would be successful and
even after he is gone they continue to travel down the right path
to continue to remain innovative in the phone world.
Innovative strategies are what make Apple who they are today.
Apple is always in the front in producing digital technology,
which keeps them ahead of competitors. Apple is the first to
introduce many of its products, such as the iPod nano and the
original iPod. Apple never waits for any product to become old
before a new one is already shaped. Many of its competitors
have a hard time keeping up with Apple and will do so as long
as Apple stays in the forefront of the digital marketing world.
Steve Jobs developed a strategy that enabled Apple to be at the
beginning of the computer generation. Jobs led Apple’s
introduction of such as application as iTunes, the iPhone,
iMovies, the Apple computer, and the IPod. Apple Inc’s goal is
to create value and competition sustainable for the company to
attain high profit maximization levels. Apple Inc can remain
number one in the computer market with the strong brand image
the company portrays to consumers which will in turn lead to

17. strong relationships between the company and its customers.
Organizations use SWOT analysis to analyze its progress in the
market and where the strengths, weaknesses opportunities of an
organization can be uncovered. Through the company
innovative products, the Apple organization creates a great
impact in the PC industry. It is through these innovative
ventures that the organization can be able to fulfill the needs of
the customers despite the changes being experienced in e-
commerce.
One weakness Apple Inc. is facing is the act of product recalls.
This occurs when the defective products from the company are
returned to the company from the market. This request of
product recall entails the return of a selection or the entire
product line of commodities to the selling company because of
specific reasons. This company weakness costs the organization
valuable funds because of the legal liabilities that they have to
meet in terms of the damages for withdrawal when the goods are
recalled back to the Company. It is important that the external
environment is controlled to avoid any circumstances that will
affect the operations of the company. This can be attained
through planning and forecasting of the company operations.
The company has great competitive advantage over other
corporations in the same field of business because of its unique
products constantly placed in the market. The opportunities that
the company has are the new smart phones that have captured
great market value. The products have been proven to give the
esteemed clients value for their money yielding to high levels of
customer satisfaction. These high rates of customer satisfaction
create customer loyalty for Apple Inc (“All about strategic
planning“, 2014).
Conclusion
Apple Inc. stands ahead of other companies because of the
offering of its products in retail stores. The company provides

18. itself with an opportunity to build on a relationship with its
customers, meet their needs, and build clientele within the
business market. The retail stores are a great competitive
position that Apple has because customers can provide their
feedback on the performance and quality of the products with
employees directly. The company is internally consistent hence
driving the clarity of association between the organization's
corporate identity and the external environment of the
organization.
References
Apple. (2014). Retrieved from http://www.apple.com
Apple (2014). Apple and the Environment. Retrieved August 25,
2012, from
http://www.apple .com/environment/
Apple Reports Third Quarter Results. (2012). Retrieved from
http://www.apple.com/pr/library/2005/07/13Apple-Reports-
Third-Quarter-Results.html
All About Strategic Planning. (2012). Retrieved August 25,
2012 from
http://managementhelp.org/strategicplanning/index.htm

19. Barney, J.B. (2007). Gaining and sustaining competitive
advantage (3rd ed.). Upper Saddle River, NJ: Pearson Prentice
Hall.
History of Apple Inc. (2012). Retrieved from
ttp://en.wikipedia.org/wiki/History_of_Apple_Inc.
Pearce II, J. A., & Robinson, J. R. (2011). Strategic
management: Formulation, Implementation, and Control (12'th
ed.). New York: McGraw-Hill Irwin.
External and Internal Environmental Analysis7
External and Internal Environmental Analysis
Trisha Eisele
August 2, 2014
Alfonso Rodriguez
Abstract

20. This paper is an external and internal environmental analysis on
the company called Bright Horizons Family
Solution
s. Bright Horizons Family