Subject; “Discuss the impact macro factors may place upon your chosen organisation in the future (1-5 years) and how the organisation may positively manage this”. When speak from macro and micro perspective we must bear in mind that these are two different phenomenon’s.
Micro factors can be described as factors that people and businesses keep in mind when making decisions concerning the allocation of resources, whereas macro factors can be described as the factors that are kept in mind when making decisions regarding not only specific companies but industries as a whole and economies, more over micro environmental factors are the one’s over which the business has control for example price, product and promotion whereas macro environmental factors are the one’s over which the business has no control as such as social, cultural, technological and political factors.
Businesses operate in markets keeping in mind changing situations not only of their market conditions but also the trends of the economies that they operate in, so that they can adjust and survive in accordance with new situations because adaptation is a must for a business to survive and prosper otherwise a business might be forced to cease operations and shut down. Starbucks is one of top five(Caribou coffee, Tully’s ,Coffee bean and tea leaf, Peet’s Coffee) businesses in a $11 billion industry. The coffee house industry grew from merely 500 stores in 1991 to over 40,000 in 2011.
This shows how well adaptable the whole industry is to economic trends especially because these businesses stayed strong even in current economic downturn. When we discuss the impacts of macro factors on businesses and how well they are able to take advantage of most economic situations, Starbucks provides the best example because since it is a consistent brand therefore it cannot afford to change its marketing and its policies to suit a specific country therefore it must focus on maintaining its brand throughout the world.
However considering macro-economic factors affecting its biggest market which is North America we can briefly discuss the factors as such as the technological factors, economic factors and the cultural factors that affects Starbucks. When we talk of technological factors regarding the coffee houses are changing rapidly and the demand for wireless internet(Wi-Fi) is increasing, although Starbucks has provided internet access in most of its stores, when its competitors start providing cheaper or even free internet access, then Starbucks might have to let go of its internet charges.
Secondly Legal factors might affect Starbucks since the beans that it imports are not from Latin America but from other south American and African nations and because of the political situations in those countries it is very hard to predict the changes in taxation and tariffs policies due to which they don’t know how reliable their sources are therefore Starbucks must always have alternate sources of importing coffee to meet its demand in north America.
Thirdly starbucks must maintain a flexible workforce and a system that is efficient in hiring, this is one of the reasons that Starbucks performed well even when the economic situations were not right.
This is because Starbucks sales depend upon how well the economy is doing, so when the economy is doing good it will expand its workforce and when its experiencing a downturn it will let its workers go, further adding to economic factors in 2008 Starbucks lost almost 50% of its stocks value and because of the global economic crash, and by organising their resources their profits rose eightfold by second quarter of 2010 and by 2012 their total revenue increased by 16% to $3. 4 billion (Day, 2012). Moreover people preferences and cultural factors also affect Starbucks a lot because Starbucks has been formed as a cultural institution in America, therefore if there is a change in peoples preferences this will hugely impact the business of Starbucks, so as long as Starbucks can maintain the brand quality and services it might not have to face such a problem in north America.