Essay
The Business Environment - P6
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P6 - describe how political, legal and social factors are impacting upon the business activities of the selected organisations and their stakeholders.
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Factors which affect STARBUCKS and their stakeholders:Political factors:
Political factors can affect Starbucks through the laws and regulations in the
UK and China.
Political factors can be:
- Changes in taxation
If the VAT tax is increasing in UK or in China, this will affect Starbucks
Company because the prices of their products will rise too, so the
customers will not be happy to buy expensive coffees.
In UK the standard VAT rate is 20% (just raised from 17 %) which is
quite high comparing to China, where the standard VAT rate is 17%. For
UK, this means an increase on prices of goods, so most of the
customers cannot afford to buy Starbucks products. This means also an
increase in import and export products; UK expenditure will go up.
China’s VAT rate is 17 %, which is lower than in UK. This means that
Starbucks has chances to sell more products in China than in UK,
because of their prices, so China’s population can afford to buy more
products.
- Corporation tax
Corporation tax represents a tax placed on the profit of a company,
with different rates used for different levels of profits.
In UK the corporation tax is 20% comparing with China, where the
corporation tax is 25%.
This means that in UK Starbucks will have more left profit than in
China, so Starbucks UK, can re-invest in the company, or use the profit
to open more shops.
In China, the corporation tax is higher, meaning that they can’t make
so much profit. If the company would like to have more profit, than
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