This document provides an analysis of the external environment affecting Starbucks in Singapore using the PESTLE framework. It identifies opportunities for Starbucks including Singapore's growing economy and coffee culture. Threats are also noted such as increasing competition from other coffee shops. The document recommends a marketing strategy for Starbucks focusing on product development like new menu items and market development through promotions, expanding their mobile app, and online delivery options.
This document provides an analysis of the external environment affecting Starbucks in Singapore using the PESTLE framework. It identifies opportunities for Starbucks including Singapore's growing economy and coffee culture. Threats are also noted such as increasing competition from other coffee shops. The document recommends a marketing strategy for Starbucks focusing on product development like new menu items and market development through promotions, expanding their mobile app, and online delivery options.
This document provides an analysis of the external environment affecting Starbucks in Singapore using the PESTLE framework. It identifies opportunities for Starbucks including Singapore's growing economy and coffee culture. Threats are also noted such as increasing competition from other coffee shops. The document recommends a marketing strategy for Starbucks focusing on product development like new menu items and market development through promotions, expanding their mobile app, and online delivery options.
This document provides an analysis of the external environment affecting Starbucks in Singapore using the PESTLE framework. It identifies opportunities for Starbucks including Singapore's growing economy and coffee culture. Threats are also noted such as increasing competition from other coffee shops. The document recommends a marketing strategy for Starbucks focusing on product development like new menu items and market development through promotions, expanding their mobile app, and online delivery options.
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1 External Analysis
To find out how external environment is affecting the Starbucks, Pestle framework is used in this report. Pestle analysis is a framework for analyzing how external factors such as political, economic, social, technological, legal and environmental factors are affecting the organization (Professional Academy, 2018)/ (Oxford College, 2016). It can be also used to evaluate the threats and opportunities which formed the basic for the SWOT analysis ( Perera,).
The PESTLE analysis of Starbucks in Singapore market will be as followed.
Opportunities
Starbucks had opened its first store in Singapore in 14 th December 1996. From the very first beginning, Starbucks had explored numerous opportunities in Singaporean market. Because of the growing GDP throughout the years, Singaporeans usually drink more than 10,000 gourmets a day. Hence, Starbucks can leverage these growing spending on the coffee market to increase their profit. Moreover, growing concerns of westernized lifestyles will pose major opportunity for Starbucks. Being an American coffee chain, Starbucks can become as an American Icon like McDonald’s in the growing westernized trend in Singapore. By utilizing these potential opportunities , Starbucks can enhance their revenue stream. Although there are some competitors in the market, Starbucks can leverage the competition by creating a more powerful brand equity.
Economic
Being one of the richest countries in the world, Singapore holds the world 40 th largest economy with the GDP of US $54,350 per capita in 2017. Despite the downturn during the pandemic, the economy is recovering much better now. Also, the growing coffee trend in Singapore is also notable over the last ten years. The increasing disposable income and purchasing power has opened many opportunities in the café market in Singapore. More than 100 coffee shops are being opened in Singapore yearly. Many young Singaporeans want to taste more premium coffee instead of a traditional kopi from the hawker store which will only cost a dollar. As we can see, Starbucks has potential opportunities to expand its market share in Singapore. The growing concern of the café culture and increasing disposable income will be a good notion for Starbucks.
Technology
Starbucks is the first coffee chain to run a digital platform to enhance
customer experience back in 2009. The Starbucks Loyalty program gains massive success. The program needs customers to create profile on the website and register. Then, customers can collect points in the system and exchange them with gifts. Customers can also pre order their drinks to save time. Hence, the digital enhance Starbucks experience will boost the customer satisfaction that result in creating retention and attraction of customers. Starbucks can gain revenue through these technologies. Threats
Although Starbucks have opportunities in Singapore market, it has lots of
competition, too. The growing café trend in Singapore has produced various coffee shops around Singapore. Some are local and some are global giants like Starbucks. Starbucks need to face with these emerging threats. For instance, Starbucks has direct competition with giant retailers like Suntec Dome Holding in the coffee market. There are also another competitors in the market like Coffee Connection and Coffee Club which Singaporeans are familiar with. Hence, Starbucks need to leverage their resources to overcome threats.
Political Factor
Singapore is a democratic republic with the parliamentary system. The
president is the head of state and the prime minister being the head of government. Singapore is one of the countries with stable political issues in South East Asia. Having a stable politics, the global operation like Starbucks. Although strict rules are imposed upon the food industry, some policies are in the favor for food organizations to run their business in Singapore.
Social Factor
The increasing purchasing power and the growing concern in café have lead Singaporeans to explore new social activities. Singaporeans are not foreign to the coffee culture. They have traditional coffee shops that sell kopi. Also, foreign coffee chains like Starbucks open many outlets around Singapore. Nowadays, Singaporeans are eating out in café in the form of relaxation activity. They enjoy the sipping of coffee as a leisurely activity. Café are not just places for selling coffee. They have somewhat become lifestyle for certain people. Some people perform their work at coffee shop. Doing work at café is also an emerging trends. Some people reflect their personality with respective coffee shops. A customer from Starbucks will always choose Starbucks not only for sipping the Starbucks coffee but also view oneself as developing connection with major American café. Therefore, the growing social trends in café will empower Starbucks in creating customer engagement.
Overall Marketing Strategy
Ansoff Matrix
Ansoff matrix is a tool for managers and executives to devise
strategies for growth of the business in future. It was develop by mathematician Igor Ansoff in1957.The model consists of 4 pillars: Market penetration, Market development, Product development and Diversification. All these elements have their own risks and opportunities in setting their respective strategies. According to the marketing objectives, the report will used market development and product development in implementing marketing strategies. Ansoff Matrix
Product Development
To increase sales and profit, it is necessary for Starbucks to
update their menu which will attract more customers thus enhancing the revenue stream. Most of the items in the menu are nearly the same as every other coffee shop. Only the unique products like Frappaccuino are different from other competitors. Hence, Starbucks need to introduce new products to retain customers. The café market in Singapore is growing steadily with numerous local and global café shops are entering the market to compete with Starbucks. It is important for Starbucks to come up with new menu quarterly to stay fresh among competitors. With unique offerings, Starbucks can also attract new customers thereby increasing their sales and profits.
Market Development
Starbucks already have nearly 80 outlets in Singapore. This can be
considered a wide coverage for the company to obtain market share. For the market development strategy, Starbucks can capture new market through exciting promotion and discounts. Most of the customers in Starbucks are normally between 25 to 45. So, Starbucks can tap into older market segment by introducing promotions tailored to that age groups. They have already developed the Starbucks mobile application. They can also enhance the number of their mobile app users to acquire more market. Digital technology is a very useful innovation for companies to develop their market. They can also add new features like online delivery system in their own application for the convenience of customers. Integrating the usage of other delivery platforms (Foodpanda, Grab) and their own online platform, Starbucks can develop their online market. High Environmental Friendliness
