Starbucks Case
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2. Economical
Totality of economic factors such as employment, income, inflation, interest rates, productivity, and wealth that influence the buyer behavior of consumers and firms. (www.businessdefinition.com)
Figure 1, Economic definition (Self-Made)
Old Town White Coffee business was equally focused on its three-in-one coffee mix retail business, which started a decade ago, and the food and beverage chain, which took off in 2005,
Being the pioneer white coffee brand with roots in Ipoh, the Old Town White Coffee brand at present has about 40 per cent of the market share for the white coffee mix retail market. The rest is believed to be shared by more than 20 other brands. The expansion of the Food&Beverage business was based on three models — fully owned outlets, joint ventures and licensing. Their strategy was to expand as fast as possible to capture market share.
During economy crisis, Old Town White Coffee is still making money. The price of foods for Old Town White Coffee are cheap and reasonable, as a result the profit is not decreasing. Promotion of breakfast set or set meal help a lot in profit gaining because the price is cheaper than other restaurants
The Economic conditions affecting old town white coffee company in easiness or difficulties is to be successful and profitable at any time because its affect both capital availability and cost, and demand, hence, customers play a very important role in organizations in gaining profit.
3. Political and Legal environment
As part of the macro forces of the external environment, the political and legal factor affects a business. In Old Town White Coffee, this element is applied through its nature of business and its industry, food and beverage industry.
3.1 Political
The basic understanding of the political legal environment is when the government implements laws and or regulations which affect the way a business operate.(www.answer.com)
In Malaysia, competition of the food and beverage industries between local and international industries are high .Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system. It is a component of the marketing environment that consists of laws & their interpretations, requiring firms to operate under competitive conditions and set to protect consumer rights.
The political factor does not really have much influence on the company but Old Town White Coffee outlets are situated at politically stabled places.