PESTEL

Political: 

The majority of the producers of coffee come from developing countries and some are in conflict such as Ethiopia, Colombia, Cuba... Moreover, work conditions are more and more discussed just like the ethical aspect. There is an increased demand for sustainable coffee which assures a fair price to the producers.

Political organizations have influences on the tariff and taxes.

Economic:

The price of the coffee is very volatile so Costa and Starbucks could be obliged to change their prices.

The economic recession has a huge impact on the consumers’ behaviour. They shop less.

Social:

As Starbucks and Costa have opened coffee shop in many different countries, they should analyse the culture and the habits of each country in order to offer the best product to their consumers.

Consumers become more health conscious which has an impact on the coffee market. We can find many alternatives drinks in the market. Costa and Starbucks have to create new lines of product to satisfy the new expectations of the consumers.

Technological:

We can find in the market a lot of high end coffee machine at affordable prices. The consumer can prepare his beverage at home. Moreover, competition is rude so that Starbucks and Costa need to invest more in research and development. They are obliged to innovate if they want to keep their customers.

The two brands must also take into account the importance of internet and social network.

Environmental:

Nowadays, a firm cannot make business without taking into account the environment. Many organizations make pressure on companies that do not adopt environmental measures. The consumer is increasingly sensitive to sustainable development.

Legal:

Costa and Starbucks are involved in sustainable development and they care about ethical issues. That is why they need to respect some constraints.

Article written by Elsa Bertrand