Starbucks Essay

2226 words - 9 pages

Economic Environments:
The United States economy is starting to recover from the recent recession with a drop in the unemployment rate from 7.7% in 02/2013 to 6.7% in 02/2014 (Bureau of Labor Statistics). The American people are starting to have the additional .3% increase in disposable income. This additional income allows for people to enjoy the luxury of social outings, meals, entertainment, and larger purchases. Interest rates are still at an all-time low which allows for individuals that might not be previously in the position to make a large invest in buying a home, starting a business, or finance a long term goal the opportunity. Low interest rates also allow corporations the ability to open more franchises at a locked in lower rate.
The 2014 Farm Bill signed by Obama in February 2014 will help the United States economy keep the cost of all dairy products down. The bill is put in to place as an insurance policy or margin protection program for American dairy farmers that are impacted by a catastrophic condition such as weather extremes, or prolonged periods of low margin rates (Producers weighing dairy policy shift in new farm bill). A significant increase in beef, poultry, fruit, vegetables or dairy prices directly impacts the consumer cost and will indirectly cause companies go out of business that directly deal in these product.
A potential threat that the economy presents is the increase in corporate taxes being proposed by President Obama. The additional 28% corporate tax increase could potentially cause corporate America to cut down on hiring addition employees and streamlining their current resources. This could also lead more corporations to move their business to a more global market and hire cheaper labor overseas.
Regulatory Environments:
The regulatory environment that effect the coffee industry is the tariffs and taxes placed on coffee bean imports into the country of consumption. The primary markets that corporations import both roasted and green coffee beans are from Africa, Colombia, China and Costa Rica. The following taxes and fees are applicable to coffee imports: Africa- 14% tax, Colombia- 10% duty fee, China-8% duty fee and 17% tax, and Costa Rica-14% duty fee (Import Duty and Taxes for Coffee Beans). It is important that the corporation stay informed on the changes to import and export laws in these countries. Just recently has there been a change that some countries have lifted the tariffs on green coffee beans in order to help stimulate the economy of these countries that weight heavily on foreign trade as part of the World Trade agreement.
Companies that operate in the United States but have dealings with other divisions or departments that also operate globally must be aware of the labor laws in that country. Conduction child labor or having unfit working conditions for employees may not be directly regulated by the Equal Employment Act of the United State but when conducting business globally these...

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