PESTLE analysis for Coffee industry

Operation of successful business has to be based on well-done analysises. Especially, it is a significant aspect for international businesses because it gives evidences for decision making. So, in this post I would like to discuss the PESTLE analysis and apply it to coffee industry.

Just for remind yourself, PESTLE analysis is an analytical tool for strategic business planning. This analysis is a strategic framework for understanding external influences on a business.

Political
According to the policy, there are could be barriers to open stores in other countries because of bad relationships between them. Also the reason of problems could be the changes of trade law by local government because of unstable political situation inside of country.

Economical

Coffee industry also affected by economy. It become expensive to open stores and buy new equipment in different regions the reason of it is rise of local currency exchange rates. 

Social

It might be risky for branching stores in the new places (countries) because potential customers may prefer local coffee shops. Moreover, there is a possibility of boycott, eg. in 1791 in England was the boycott of sugar produced by slaves, as a result of it sales dropped by between third and a half.

Technological

Consumers are less prone to buy coffee in cafes. The reason of it is that currently a variety of Hi-tech equipment and diversity of ingredients are easily accessible in shops that gives opportunity to create as tasty coffee as sold in coffee shops. Eg. Coffee machines ‘Nespresso’. So, the technology developing may affect demand of the product.

Legal

The fact of introduction of policies and regulations by health authorities on caffeine production and consumption leads to the new standards of product quality that companies will need to achieve. Also business may face problems with the licensing regulations related to the industry.

Environmental

It directly depends on its suppliers. There is a probability of poor land productivity because of the environmental disasters in countries producing coffee beans such as earthquake, drought, and poor harvest. All things mentioned influence the quality of product consequently impact on its realisation as well.