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For any business coffee and breakfast depends on its surrounding environment located. It means the
trends in political, economical, social, technological, environmental and legal environment, which
can influence business.
Political issues:
Taxation policy: Government imposes low tax on farmer because our country produces coffee
bean, so we need to pay lower price for coffee. This effect will encourage customers to buy more.
Government stability: It can affect on taxation and legislation when the government changes.
Employment law: A decrease in licensing and permit costs will reduce production cost.
Economic issues:
Interest rate: An increase in interest rates means investment and expansion. And also mortgage
repayments rate will rise so customers have less money to spend on luxury products such as coffee.
Low interest rates have the reverse effect.
Economic growth is high then customer’s income tend to go up and have more money to spend
on breakfast and coffee.
Competitor pricing: Aggressive pricing and sales from competitors create a price war for our
