External environmentStarbucks mainly operates in the retail coffee market. The UK cafe market alone is estimated at over 16,000 outlets and recorded a strong growth of 6.4% in sales in 2013 (FDIN, 2014). The branded coffee chain segment recorded a turnover of £2.6 billion, representing above-market sales growth of 9.3% (FDIN, 2014). The coffee shop sector has seen considerable growth over the past 15 years and Allegra Strategies (cited in FDIN, 2014) predicts that the UK branded coffee market will experience compound growth of 10% over the next five years . A “PESTLE” analysis is a strategic analysis model used to identify the current and future external environment in which a company operates as well as the macroeconomic functions of the environment (Worthington & Britton, 2006). The analysis includes political, economic, socio-cultural, technological, legal and environmental factors that influence and affect a business. I will use “PESTLE” analysis to identify and understand the macroeconomic factors that Starbucks must consider when conducting its business. Policy:• Tax policies – High taxation imposed by a country's government on coffee bean producers can ultimately lead to Starbucks having to pay a higher price for the coffee it wishes to purchase, which can be passed on to the customer.• Government Stability – Starbucks must consider and investigate the political situation in any country in which it plans to open stores. Changes in government can lead to drastic changes in tax laws and policies. The same consideration should be made when looking at suppliers of coffee beans.• Tariffs and trade regulations – Trade regulations will affect Starbucks mainly when exporting and...... middle of paper ...... Prentice HallRamagopal, C. 2008. Financial Management 1st ed. New Delhi: New Age International (P) Ltd., publishersStarbucks Investor Relations, 2014. Starbucks Annual Shareholders Meeting Highlights Record Performance Driven Through Lens of Humanity [Online] Available: http:/ /investor.starbucks.com/phoenix.zhtml? c=99518&p=irol-newsArticle&ID=1910182&highlight= [March 28, 2014]Starbucks Corporation, 2014. Starbucks Annual Report for Fiscal Year 2013 [online] Available: http://phx.corporate-ir.net/External.File? item=UGFyZW50SUQ9MjE4MDQyfENoaWxkSUQ9LTF8VHlwZ T0z&t= 1 [March 26, 2014]Shultz, H. 2011. Onward: How Starbucks Fought for Its Life Without Losing its Soul. New York: Rodale Books. Rochester Institute of Technology, RIT, (nd), Cost Benefit Analysis [Online] Available: https://www.rit.edu/~w-outrea/training/Module5/M5_CostBenefitAnalysis.pdf [March 28 2014]