The External Environment of Bubble Tea - Case Study Example

Organization’s Environment Analysis Organization’s Environment Analysis Bubble Tea Introduction This paper aims to analyze theexternal environment of Bubble Tea. It is comparatively small business which specifically deals in drinks and beverages. It is located near the San Marcos High School in the San Marcos Blvd. I came to know about this organization through my friend who works there. Moreover, I visit the Bubble Tea drink store at least thrice a week. Hence it was easier for me to conduct the environmental analysis of this organization. In a broader perspective the paper will analyze different environmental aspects of Bubble Tea while applying the business concepts learned throughout this course. Environmental analysis plays an important role in formulating the business strategies, marketing plans etc. Its significance increases even more when the external business environment undergoes frequent changes. In the past few years dynamic changes in the political, social, economic and technological environment has been observed while on the other hand these have subsequently impacted the task factors of an organization’s environment such as suppliers, customers, competitors, regulators etc. Furthermore, if an organization fails to monitor its environmental changes then it expected to be pulled out of the business. The environmental analysis made in the paper will enable managers to evaluate any future business strategy. Overview As discussed above that Bubble is a small business located in San Marcos. The organization offers special Asians fruit fused drinks along with bobas (Boba Tea San Marcos, 2014). The internal business environment of Bubble Tea constitutes of manufacturing, accounting, information systems, sales and marketing, research and development, finance and human resource department (Talloo, 2007). All of these areas are under the direct control of the management whereas these are the crucial areas which make a business successful or failure. As per customer reviews Bubble Tea has been efficiently managing its internal environmental factors while satisfying its customers’ needs. The most important step in the analysis of environmental factors is to define the general and task factors. Following is a brief description about different aspects of an environment which currently influences the business operations of Bubble Tea. General Environment Factors: These include following categories (Kew, 2005): Economic: Business cycles are largely influenced by the economic growth and development. Bubble Tea’s business activities are primarily impacted by interest rates, economic competition, powers of supply and demand, disposable income and unemployment. Socio-Cultural: Social and cultural aspects would be an important external environment factor for Bubble Tea because they define the income distribution, demographics, lifestyle, education, interests and leisure activities of target market. Political-Legal: Government stability and trade regulation might influence the business strategies of the organization. This is gained immense recognition in the last few years because of the ongoing ‘war on terror’ and numerous activities of non-state actors. Technological: There are significant technological inventions are made in the recent years while will help Bubble Tea in achieving its strategic goals and objectives. However, the organization has not used majority of these technological advancements, for instance, the smart computer systems for taking in customer orders and the fast service delivery options. International: The global economic, political, social and technological aspects also impacts different business operations especially when Bubble Tea will open international beverage outlets. Task Environment Factors: These include following categories (Lussier, 2011): Owners: It is important for Bubble Tea to define different characteristics of owners. For example, the company has few owners who directly influence the business decisions while other only invest in business and does not interfere in making different strategies. Customers: Customers have a significant impact over the efficiency and effectiveness of an organization. This is primarily because of the fact that an organization exists only to fulfill the requirements of its customers. Since the changing socio-cultural environment and technological advancement have caused customer preferences to change frequently therefore considering the customer requirement has become even more important for Bubble Tea. Competitors: The strategic business decisions made by competitors will subsequently impact Bubble Tea’s market share and customer segmentation. Hence it is important to constantly evaluate the business moves taken by competing organizations. Regulators: These might include different agencies which are able to adjust or normalize business activities. They can either increase business opportunities or force business closure (Kraft, 2007). For instance, a healthcare agency might regulate the business operations of Bubble Tea in order to provide maximum protection to the customers. Unions and Labors: The human resource directly impacts an organization’s effectiveness especially when it comes for drinks and beverages business. For instance, if Bubble Tea is unable to recruit valuable human resource while managing them in an effective way then the organization will lose its satisfied customers. Suppliers: Bubble Tea purchases manufacturing material from different suppliers which subsequently influence its products and services. Strategic Allies: These are business partners or corporate associates which help Bubble Tea in running a successful business through mutual benefits. Discussion Above preliminary investigation about different general and task environment aspects of Bubble Tea have led to the selection of salient external environmental factors. Following is the in-depth discussion and research analysis about these factors which exist currently and will be useful in projecting future trends. General Environment Factors There are various factors concerning general environment. However, economic, socio-cultural and technological aspects are found to be most important for Bubble Tea. Economic: The extended economic conditions such as inflation, interest rates, competition, prices, disposable income, supply and demand of raw material etc. largely impact the business operations of Bubble Tea. For instance, if people especially the office working individuals and college going students have considerable disposable income then Bubble Tea can conveniently offer them various products and services. Apart from this, sound economic environment also facilitate the development business and expended ventures. This subsequently helps in the growth of local communities (Type A and B Economic Development Corporations Overview, 2014). Economic environment is particularly important for Bubble Tea because the company operates in food and beverages industry which is largely associated with human and health development programs. Socio-Cultural: These primarily include religion, values, norms, attitudes and beliefs (Adeoye, 2012). All of these are specifically important for Bubble Tea because in certain religions there are few beverages which are strictly prohibited. Therefore when introducing new products the company will have to consider the religious concerns of their target market. Moreover, the advertising campaigns and marketing strategies must be consistent with the norms and societal values. Here, it is important to notice that globalization has synchronized different cultural beliefs and attitude. This has subsequently made easier for organizations such as Bubble Tea to offer same products with little variations internationally. Socio-cultural factors are also important for Bubble Tea because they define the lifestyle of customers their education level, interests and the most preferred leisure activities. Technological: The greater technological environment requires continuous innovation, research and development (Adeoye, 2012). This will essentially help Bubble Tea to formulate, design and produce new drinks and beverages for its customers. Additionally, the organization needs technological advancement for better understanding of the customers’ requirements. This is further associated with the idea of developing customer friendly services. In the contemporary world consumers prefer easy order placement and quick order delivery. This can be made possible only through implementing the latest computers and manufacturing equipments. Task Environment Factors There are different task environment factors which are highly substantial for Bubble Tea. They are important to be determined on the basis of the fact that they act as a stimulus for the organization to respond in different situations. For instance, task factors will help Bubble Tea in making significant business decisions concerning economic or social threats and opportunities. Following are the most important task environment factors for Bubble Tea: Customers: Formerly bubble tea was specific to the Asian customers only. However, due to rapid globalization the tea has made its way to the US customers also. Bubble Tea, the renowned drink store in San Marcos especially caters the needs of European and British women between 18 to 30 years of age (Debnath, 2012). These customers have certain distinguishing characteristics which help Bubble Tea to differentiate its services from competitors. For instance, these customers prefer having very strong black tea along with condensed milk and pearls of tapioca. The tapioca pearls make the looks of Bubble tea very attractive while enhancing its strong taste. In addition to this, customers of Bubble Tea are usually college students or working women. Although statistics show significantly large number of women customers but Bubble Tea also serves to the male customers. Since the number of working women is drastically increasing therefore Bubble Tea can avail the opportunity of increasing customers through introducing new beverages with the strong taste of black tea. Tea is generally associated with individuals who have stress issues or hectic work schedules. Considering this psychographic Bubble Tea can make new marketing strategies whereas the company can also make new market segments. Competitors: One of the major competitors of Bubble Tea in San Marcos includes Mochas and Javas Coffee and Tea. This company was established in 2003 and it offers a great range of facilities such as catering and gifts along with a large variety of biscuits, tea and coffee. Mochas and Javas also target the same consumer market as Bubble Tea i.e. working individuals and college students. In order to establish customer loyalty and long terms relations the company also offers local food and drinks (Drink Local, 2013). Jo on the Go is another competitor of Bubble Tea which has especially drinks and beverages including espresso, coffee, fruit smoothies, ice cream shakes etc. The company specifically focuses on presentation which has enabled it to enter into the catering industry. The most distinguishing feature of Jo on the Go is that the company offer home services as well which has significantly increased its customer satisfaction and service level (Premiere Coffee Catering, 2014). Regulators: As discussed previously that regulators are those agencies which can directly influence an organization’s business decisions and strategies. In case of Bubble Tea, the most prominent regulators are healthcare institutions and the taxation department. Healthcare institution is primarily responsible to ensure that food and beverage businesses are delivering healthy and nutritious material to their customers. However, if they find that any organization is not performing up to the standards then they reserve right to take immediate actions against them. On the other hand taxation department has to evaluate the financial data of Bubble Tea so as to impose relevant taxes. This is particularly important for Bubble Tea to consider because if taxation department imposes higher tax rates then company’s profit margin will decline. However, if Bubble Tea fails to meet the standards set by taxation department then it will have to face significant government penalties. Conclusion Bubble Tea is one of the renowned drink stores in San Marcos. The above research and discussion reveals the salient general and task environment factors concerning the organization. All of these factors were selected on the basis of their influence over Bubble Tea’s business operations and the customer preferences. References Adeoye, A. &. Elegunde, A. (2012). Impacts of External Business Environment on Organisational Performance in the Food and Beverage Industry in Nigeria. British Journal of Arts and Social Sciences , 194-201. Boba Tea San Marcos. (2014). Retrieved May 1, 2014, from Yelp Inc. Debnath, N. (2012). A curious kind of cuppa: Britain boards the bubble tea. Retrieved May 1, 2014, from Independent. Drink Local. (2013). Retrieved May 1, 2014, from Mochas and Javas. Kew, J. &. Stredwick, J. (2005). Business Environment: Managing in a Strategic Context. London: CIPD Publishing. Kraft, M. &. Kamieniecki, S. (2007). Business and Environmental Policy: Corporate Interests in the American Political System. USA: MIT Press. Lussier, R. (2011). Management Fundamentals: Concepts, Applications, Skill Development. USA: Cengage Learning. Premiere Coffee Catering. (2014). Retrieved May 1, 2014, from Jo on the Go. Talloo. (2007). Business Organisation & Management (For B.Com Couese Of Delhi University). New Delhi: Tata McGraw-Hill Education. Type A and B Economic Development Corporations Overview. (2014). Retrieved May 1, 2014, from Texas Ahead. Read More