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LUCIE MCADAMS
THEGLOWWITHINBLOG@GMAIL.COM
FROM IT
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Table of Content
Introduction ................................................................................................................................ 4
Purpose of the Report ............................................................................................................. 4
Starbucks ................................................................................................................................ 5
Stories ................................................................................................................................... 12
Symbols ................................................................................................................................ 12
McKinsey 7s ......................................................................................................................... 13
Strategy................................................................................................................................. 14
Structure ............................................................................................................................... 14
System .................................................................................................................................. 14
Staff ...................................................................................................................................... 14
Style...................................................................................................................................... 14
Skills ..................................................................................................................................... 14
Strength ............................................................................................................................... 15
Weaknesses ......................................................................................................................... 15
Opportunities ...................................................................................................................... 15
Threats................................................................................................................................. 15
Conclusion ............................................................................................................................... 22
References ................................................................................................................................ 23
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Introduction
The purpose of the report is to present the in-depth analysis of the Starbucks and this
analysis identify its management and leadership models that have been developed within the
past few years. This report discusses the situational analysis of the Starbucks which help to
identify the major issues that are facing by Starbucks. For this, the overall marketing
environment of the Starbucks will be examined which identify issues that are held within the
macro and microenvironment. This examination is possible through using frameworks such as
PESTLE, McKinsey 7s, Cultural Web, and Porter Five Forces. This report will discuss major
issues of the organisation and provide a detail critically assess its importance and implication
and then justify one issue and challenges related to leadership and management.
Moreover, this report also provides a literature review that is based on the ability to
critique different approaches to management and leadership. In addition to this, the literature
review also consists of different innovative management and leadership approaches that might
be adopted by the Starbuck to resolve out the identified challenges. Furthermore, this report
also presents the strategic recommendation that addresses leadership and management
challenges. Moreover, this report also provides a change management plan that is used by
Starbucks
The name of the organisation that is used for in-depth analysis is Starbucks. In 1971,
Starbucks was established by Zev Siegel, Gordon Bowker, and Jerry Baldwin who were the
students at the University of San Francisco (Zhao, 2017). In Seattle, Starbucks started its
operation with a single shop that offers whole bean and ground coffee and now its stores are
located in more than 62 countries. In addition to this, approximately 192,000 employees are
currently working in 20,000 stores that are located throughout the world. Starbuck offers a
variety of products that include single-origin premium coffees, Iced Coffee, Cold Brew, Baked
pastries, salads, yoghurt parfaits, fruit cups, and non-coffee blended beverages.
Moreover, products mix of Starbucks is also marketed through different brand names
such as Seattle’s Best Coffee, Starbucks Refreshers, La Boulange, Tazo, and Teavana. Starbuck
is a Business to Consumer (B2C) organisation. Social media has been used by the Starbuck to
be developing a relationship with the customer and engaging with their customers. Starbucks
has approximately 900,000 followers in Instagram which help the company to create an
emotional connection with its loyal customers. Not only this, their customers can share coffee
images of Starbucks with other fans on customers. In the early days, the competitors of
Starbucks were the local speciality and small scale coffee retailers (Sakal, 2018). But by the
passage of time and after its expansion across the world increase its competitors. Such
competitors are Caribou Coffee, Van Houtte, Dunkin Donuts, McDonald’s, and Peet’s coffee.
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The reason to choose this organisation is that it provides key trends, developments, and
customer dynamic of the Starbucks marketing environment which help in the depth assessment
of the company.
Situational Analysis
Current Situation
The current situation of Starbucks can be identified through five primary factors. To
design a strategic approach to growth is the first factor that demonstrates the feasibility of the
Starbucks business model and also takes the benefits of the demographic groups. The second
factor is that the management and leadership of Starbucks attract the highest quality employees
with the help of the healthcare implementation plan (Sisson and Bowen, 2017). Another factor
is the strategic alliance which allowed the company to create a sustainable supply chain for its
high-quality coffee. The fourth factor is related to the community environment as the leadership
of the company try to remove the social barriers through casual social interactions. The last
and the most important factor is the ability of the management and the leadership to adopt the
changes related to the consumer demographics however such factors may become the challenge
PESTLE Analysis
Macro-environment of the Starbuck has affected due to the constant global economic
recession which becomes a challenge for the leadership of Starbucks. According to the report,
consumers of Starbucks cut down their consumption of coffee to purchase the coffee with lower
prices (Shtal et al., 2018). This shows that the low price of the product still becomes a challenge
for the management and leadership of Starbucks. Consumer awareness about the ethic,
environmental and social norms become the challenge for the company. These issues can be
Political Factor
Sourcing the raw material is one of the main political factors as it takes a lot of political
attention in the West. The is the reason, the leaders of Starbuck follows the laws related to the
environmental and social norms. Laws and regulations of host countries also become the major
political factor that impacts the business of Starbucks. Not only this, in the USA regulatory
pressures that lie within the home market also creates a challenge for the company. Moreover,
coffee beans that are used in the coffee are imported from various countries (Shtal et al., 2018).
This most challenging factor to the leadership of the company as in those countries high
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taxation imposed on farmers. In the result, Starbuck charged a high price to its customer who
borrows their products. Any fluctuations in tax ultimately passed on to the consumer of the
coffee due to the high price customers switch towards the competitors of the company which
Economic Factor
The prime external economic factor that effect the Starbucks is the ongoing global
economic recession. This factor reduces the profitability of the company as this force the buyer
to shit the products at a low price. Not only this, but high inflation rate also increases the cost
of the labor and operational costs which decrease the revenue of the company and also decrease
the salary package of their employees. According to the report, the profit of the firm declined
from 36 million Euros to 15 million in 2017 due to the high inflation rate (Shtal et al., 2018).
Such challenges force the leadership and management team of the Starbucks that they must
make such practices that help the company to maintain its goodwill in the market. Such
methods help out the company to retain its customers who switched to other companies.
Social Factor
It is possible for the Starbuck that they can offer their coffee at a low price but the quality of
the product can be affected. For the management of Starbucks, it becomes the main socio-
cultural challenge. Not only this, another concerning factor is ethical chic and green consumers
that show their concerns over the environment and want that organisation must follow the rules
Technological Factor
The technological factor is the most important as it upgrades the company and makes it more
competitive as compared to other competitors. One of such examples is emerging mobile wave
which gives a lot of benefit to the Starbuck (Mason et al., 2017). Starbuck introduced app-
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based discount coupons which help the company to increase its sales through the mobile app.
In addition to this, rapid changes in technology put the management of the company in trouble
as they have to invest a million dollars over new technologies. If other companies increase their
Legal Factor
One of the most important factors is the legal factor related to the employees. In
recent world regulations related to employees has been increased if the management of the
Starbuck does not create any model related to the employees benefit then company face
restriction from the court which may harm the goodwill of the company.
Environmental Factor
Environmental factors such as laws and regulation related to the environment and
increasing global warming affect the goodwill of the company. To protect the world from
global warming the leadership of Starbucks handle this issue with an effective way. Starbuck
addresses the effects of climate change and puts its attention towards the cultivation process
of its supply chain. Not only this, Starbucks leaders robust a plan that is used to address
climate change. This plan consists of three important phases which include cultivation,
company.
the employees.
careless behaviour.
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management.
employees.
McKinsey 7s
coffee
(Grant, 2016).
communication.
(Grant, 2016).
innovative. cooperation.
SWOT ANALYSIS
Strength Weaknesses
Good Financial Records. The foreign country imposes heavy
Opportunities Threats
Starbucks can extend its supplier The rising price of dairy products
All of the above analysis shows that lack of leadership skills, management skill and
low marketing budget and strategies are the reason for low performance and challenges that
of the Starbucks.
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The most important thing is that when managers and leaders of the organisation know
their roles than they effectively perform it. Most of the challenges that occurred are due to the
lack of management and leadership skills in the company. All of these challenges can be
approaches help out the managers to establish good working conditions and relationships which
increase the motivation among the employees to resolve the issues with confidence (Lemus et
al, 2015). Management and leadership approaches can be used by managers and leaders of the
firm to help them to exercise their authority within the organisation. These approaches provide
a plan to the manager about how to organize work and how to deal with challenges that are
related to the micro and macro environment of the firm. To resolve the challenges, Starbuck
Transformational leadership can be defined as the style in which leaders empower their
employees through change, to create a bond with them, and inspire them through their actions.
Transformational leaders can bring a change within the whole organization from their specific
style. According to the Bui and McCarthy (2015), transformational leadership has been used
by the leaders and it is characterized by the several patterns of their behavior. Such
characteristic is the employ the charisma of leaders, inspiration, intellectual stimulation, bring
creativity, problem-solving skills, and offer individualized considerations. This approach helps
out the leaders of the Starbucks that can meet the objective of the firm by setting the standards
within the organisation. The most important thing that is seen during the analysis of the
Starbuck is that the main reason behind all of the issue is the lack of leadership skills within
the manager. All of the issues can be resolved through the following transformational
leadership skills. Starbuck can manage all the technological changes with the help of
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transformational leadership skills. As such leaders easily understand the changing conditions
For this, Starbucks managers can train and motivate their employees and also
communicate to their employees that their long-term interest depends over the systemic change
(Lemus et al, 2015). Moreover, this leadership style helps the Starbuck managers and leaders
to easily understand the laws and regulation of other countries so that they can change them
polices according to them. In addition to this, this style encourages employees to bring
creativity within Starbucks. In the result, a company can improve its products with new ideas
Starbucks. In this case, motivation is very necessary for the employees of Starbucks as
employees invest themselves in the company. Motivation can not be always measured through
the salary that a company gives to its employees. It can be depending on the happiness that one
has for their work. It is analyzed that Starbuck is depended on its employees as they have to
serve coffee and drink to customers. If the staff of the Starbuck is happy with the company,
then they provide a quality of services to their customers. In the result, customers of Starbucks
will surely visit the store next time. When the manager of the Starbuck gives motivation to
their employees then they think that the work, they are doing is special and they can easily
The most important thing that Starbuck analyzed is that it is necessary to build respect
and trust among employees and leaders (Mullins and Christy, 2016). Through committing
employees' success, creating an interesting environment, and defining employee goals and
objective a company create a value of its customers. According to the theory of Mintzberg, a
company must have a regional director for each region so that they can overlook the matters
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and do the legal authority for customers and employees. In addition to this, Starbuck also
employ district manage who perform its role to motivate the employees and connect upper
management and employees for upward and downward communication. According to the
theory of Fredrick Herzberg, it can be measured and analyzed about the satisfaction of the
employees about the job workplace and their employment conditions. This theory also termed
When this theory applies in Starbucks then it is analyzed that and also shown in the
above figure that the most hygiene factors for the employees are the security and salary. When
Starbucks faces a challenge from the political environment about the high tax then it creates
insecurity among the employees that they salary will be cut down by the company. In addition
to this, another factor is security as every employee wants security in the workplace but if they
can not find out then they put resignation. Such factors create low morale among the other
employees of the Starbucks that company can not fulfil its duty in terms of security (Sisson
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and Bowen, 2017). Such factors create low morale among the employees and discourage
If Starbucks wants to achieve its goals and objectives either related to the economic,
in terms of customer, and more productivity within the employees. Then it is recommended
leaders to inspire other employees to create more new innovative ideas that
Should Provide guidance and encouragement among the employees so that they
Starbucks leaders should create check and balance which encourage employees
to communicate with their store staff. This change can help the leader to know
Leaders should enhance their leadership skills which increase the motivation
The analysis of the transformational and leadership shows that a proper step should be
taken by Starbucks to improve the motivation of the employees. For this purpose, Kotter's
eight-step change model is chosen (Kotter and Cohen, 2012). Following are the steps of the
It is necessary for the Starbucks that the leaders of the company must examine the
current market and competitive realities. This helps out Starbucks to discuss the crises related
to employee motivation and major opportunities related to the market in terms of innovation.
The most important thing for Starbucks is that a leader of the company must together all the
employees. In addition to this, also provide enough power to them so that they can handle
change.
Transformational leaders must create vision and strategy so every employee must know
their responsibility to achieve the goal. This development of vision and strategy create
motivation among the employees that they work for a use full thing and their work is special.
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vision (Doppelt, 2017). This helps out the manager to listen to their employees to sort out their
problems. Also inform them about upcoming events, changes that are going to be implemented.
It is necessary for the transformational leader that they must remove the obstacles that
held during the change system which undermine the change vision.
The transformational leader of Starbucks motivates its employees through rewarding them and
This is the most important step as it helps the leader in promoting, developing, and
create a better performance of Starbucks employees (Thi, 2017). In addition to this, it also
improves the morale of the Starbucks employees through effective management, and with
better leadership.
The most important thing that any leader or a company face during the implementation
of the change management plan is the resistance that comes from the employees. As change
demands more effort and work from the employees and sometimes employees do not
understand the strategy behind the plan. For instance, Starbucks decided to change the
leadership style of their manager and now employees have to communicate directly with their
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managers (Doppelt, 2017). In this situation, employees of Starbucks may face problem to
directly communicate with the manager. Transformational leadership style of a manager helps
to provide confidence to employees that they can feel comfortable while sharing their ideas. In
the result, motivation will be increased among the employees and they work hard to achieve
Conclusion
To conclude that the current situation of Starbucks can be identified through five
primary factors. To design a strategic approach to growth is the first factor that demonstrates
the feasibility of the Starbucks business model and also takes the benefits of the demographic
groups. Laws and regulations of host countries also become the major political factor that
impacts the business of Starbucks. The prime external economic factor that effect the Starbucks
is the ongoing global economic recession. The most important thing is that when managers and
leaders of the organisation know their roles than they effectively perform it. Most of the
challenges that occurred are due to the lack of management and leadership skills in the
company. The most important thing that any leader or a company face during the
implementation of the change management plan is the resistance that comes from the
employees.
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