There are various external factors that affect the target market of Starbucks. One of the external factors is the politics. The CEO of the company (Howard Schultz) specified that political factors in the U.S. has developed challenging environment for the company to operate. He specified that an environment of anxiety is the resultant of the U.S. presidential campaign, local level racial tensions and terror attacks. In turn, the rate of making stops at local Starbucks by the consumers is decreasing. The confidence of the consumers weakened and created global uncertainty (DiChristopherm 2016). The economy of the U.S. is another factor that affects the company’s target market. It can be ascertained by the increase in the wages of U.S. employees by the company due to competition for labor in relation to service economy (Udland, 2016). On the other hand, dull economy of the U.S. and other regions like Europe affected the sales of the company due to lack of tourism and hospitality trends (Sozzi, 2016).
In relation to social factor, changing consumer patterns affect the target market of the company. Most of the consumers are moving away from the brick and mortar shopping to online deals. In addition, cultural macro shift influenced the consumers to move to mobile devices to make payments. Accordingly, the growth of the traffic and sales has been reduced. It also identified the technological factor that affects the company. Hence, the company made investment in the project of Mobile Order & Pay (Roderick, 2015). Rules and regulations as part of legal aspect of external environment affects the company’s target market. It can be understood by the new law (Prop.65 Chemical Warning Law) in California imposed on companies like Starbucks to disclose the inclusion of chemicals lead to cancer or reproductive harm (Hardcastle, 2016). Last but not the least; environment is an external factor affecting the company’s target market. The climate change increased the risk of difficulty to grow coffee. In turn, the company is working to force Congress and Obama administration to make efforts to climate change (Goldenberg, 2011).
References
DiChristopher, T. (2016). Starbucks CEO says social, political turmoil is putting pressure on consumer. Retrieved from: http://www.cnbc.com/2016/07/22/starbucks-ceo-says-social-political-turmoil-is-putting-pressure-on-consumer.html
Goldenberg, S. (2011). Starbucks concerned world coffee supply is threatened by climate change. The Guardian. Retrieved from: https://www.theguardian.com/business/2011/oct/13/starbucks-coffee-climate-change-threat
Hardcastle, J.L. (2016). Prop. 65 Chemical Warning Law Changes Take Effect. Is Your Business Ready? Retrieved from: http://www.environmentalleader.com/2016/04/01/prop-65-chemical-warning-law-changes-take-effect-is-your-business-ready/#ixzz4Fyq7nQoi
Roderick, L. (2015). How Starbucks is using technology to boost revenue. Retrieved from: https://www.marketingweek.com/2015/10/30/how-starbucks-is-using-technology-to-boost-revenue/
Sozzi, B. (2016). A Weak U.S. Economy Just Caused Starbucks to Break One Amazing Streak. Retrieved from: https://www.thestreet.com/story/13644919/1/a-weak-u-s-economy-just-caused-starbucks-to-break-one-amazing-streak.html
Udland, M. (2016). What Starbucks' Pay Raises Can Tell You About the U.S. Economy? Retrieved from: http://www.inc.com/business-insider/starbucks-gives-employees-wage-raise-us-economy.html
