Taiwan PEST

by Janice on March 27, 2012

Analysis
Political
In the political side Taiwan has been facing very few opportunities for example the local dollar has increased which will prove as a benefit to the economy as well as the people working in Taiwan. However on the negative side, Taiwan has faced a lot of pressure with China with issues like the ban issued on Taiwan food imports as well as the government trying to end the employment of Taiwanese in China. This will only provide a negative impact on Starbucks as they are a food company that relies on these food imports as a main supplier. Adding onto that since Starbucks expanded into Taiwan it’s been receiving a warm welcome by the local citizens, if the government is facing issues with the employment of Taiwanese this will be a big threat to Starbucks employees. Starbucks would have to look into their suppliers and try to rethink their supply chain as they’re currently facing pressure with food imports into Taiwan.

Economic
Starbucks being a company that relies heavily on the manufacturing industry to manufacture their cups, tumblers and many other products is currently safe in Taiwan is Taiwan’s manufacturing industries are growing at a steady rate. It’s predicted that Taiwan’s manufacturing industries will continue to increase in the future which proves as a benefit to Starbucks as Taiwan is one of it’s most successful stations globally. However to say that Taiwan is completely unfazed by the economy is wrong, recently Taiwan has been facing criticism on the food safety concerns and as a result Taiwan’s shares has fallen which will heavily impact Starbucks as it relies heavily on these local farms. Starbucks may need to rethink their food safety promises and convince consumers of their hygiene policies.

Social and Cultural
Starbucks will face a lot of threats as Taiwan’s society rebels against food safety in Taiwan, Starbucks is famous for not only providing their coffees but also the sandwiches and salads that they offer, with the local citizens having doubts about the food safety Starbucks will need to step up in terms of hygiene and food safety to keep their consumers. In the PEST table we can see that the threats to Taiwan’s food industry is big as activists have started a protest against food safety in Taiwan. This will bring about negative messages across society about the food safety in Taiwan and will bring negative impacts to Starbucks that’s main income comes from the food they provide.

Technological
From the PEST Table we can see that the benefits in terms of advancing technologically in the food industry is proven beneficial to Starbucks. Scientists in Taiwan have invented a biochip to recognize harmful pathogens in their ingredients, this can help solve the problem of food safety speculations that are rising in Taiwan society. Along with this another Taiwanese biologist has also developed a bacteria formula that will help strength the roots of crop plants and will in the future reduce the need for pesticides or fertilizers that will also improve food safety. Starbucks can use this technology as confirmation or to reassure their consumers that food safety is an issue that can be addressed. These advancements and findings will be beneficial to Starbuck’s reputation.

Evaluation
So far since Starbucks has expanded into Taiwan it has received a good response by adapting to local tastes for example providing a new Green Tea frappuccino to adapt to local tastes or putting in the famous bubble tea taste into their drinks to tend to local needs and wants. This year their profit has jumped close to 30%. Their promotional activities like buy-one-get-one-free has been attractive among customers and has been bring in a lot of new customers. Another activity includes a bonus point program where one point is awarded for every $40 spent, these points can be accumulated and will be exchanged in the buy-one-get-one-free activity. Customers in Taiwan are loyal and Starbucks is said to start adding more stores in Taiwan, currently there are 212 stores in Taiwan and it is predicted that that number will grow by 10 percent. Starbucks marketing strategy in Taiwan is staying strong and boosting sales  proving the success of choosing to expand into Taiwan.

Works Cited

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