Strategic Management Executive Summary 2022

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Executive Summary
Coffee Costa (CC) is a worldwide continually expanding coffee company. The business goal
represents the continuous quality of all coffee producers to ensure that the organization’s ethical
obligations are taken into account. They are socially conscious of their policy. Established in
London in 1971, the Costa Coffee was wholesaled to caterers and specialized Italian cafes with
roasted coffee from two brothers Bruno and Sergio Costa. In 2019 the company was acquired by
Whitbread, a wholesaler with 3,401 stores in 31 countries and 18,412 staff, with the Coca-Cola
Company for a gross offer with £ 3.9 billion. In the competitive market, the company is required
to diversifying its business to compete them in an effective manner. Costa Coffee manages
transformational leadership style that made healthy organizationalculture in the workplace. It
will help in efficiently diversify the business. Costa Coffee can extend its business to restaurant
that can help them to expand the target market. Costa Coffee Culture Review reveals that famous
companies have no extreme cultural backgrounds, but rather work for seeking the right balance
to create a successful culture. Costa Coffee has developed a lively, highly interconnected
corporate culture, which is universally embraced by its diverse employees.When the philosophy,
vision and business approach of the corporation is fully harmonized, and a fluid link between
basic values, core concepts and observable processes understood, corporate culture can be used
to build strategic advantages. Costa Coffee is an example of how companies in the
hypercompetitiveness market with a strong working culture protect their place. It has an
important influence on strategic execution.

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Contents
Introduction.................................................................................................................................................3
Advice for Diversification.............................................................................................................................3
Alternative strategies..................................................................................................................................6
Lowering Prices........................................................................................................................................6
Promoting the Brand...............................................................................................................................7
Differentiation.........................................................................................................................................7
Horizontal Diversification........................................................................................................................7
Comparison.............................................................................................................................................7
Culture and Leadership and Their impact....................................................................................................8
Impact of such culture on Strategic management.....................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12

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Introduction
Costa Coffee (CC) is a steadily growing coffee company worldwide. The corporate goal reflects
on the consistency of the products of all coffee companies, which ensuring that the organization
is mindful of its social responsibilities. Their strategy is environmentally conscious. Established
in 1971 in London, Costa Coffee was wholesale by two of the Brothers Bruno and Sergio Costa
to supply caterers and specialist Italian cafes with roasted coffee. In 2019, the company was sold
to The Coca-Cola Company in an deal worth £ 3,9 billion, purchased by Whitbread, which went
up to 3,401 outlets in 31 countries which 18,412 employees. In the fiscal year ending on
February 28, 2019, Costa limited posted sales of $1.34 billion, up from $1.29 billion in the year
before. The corporation was bought from the holding company Whitbread in January 2019 by a
division of the Coca-Cola Group. The business has 2,121 UK pubs, more than 6,000 Costa
Express outlets and 1,280 outlets in other countries. The word "good coffee" reflects this feeling
of duty. The second largest company in the world is now in Costa Coffee. This will be worth
over £ 1 billion if it is used as the basis of the company. The business is currently working to
establish regional brands, where foreign coffee drinkers can catch the attention of local cultures
and moods at Costa Coffee Shops.Costa's comparable revenue growth was nearly three times the
expected rise of some economists, following the exceeding of the consumer price index (CPI),
which exceeded 5.2 percent in September. The company has strong presence in UK (Ansoff et al,
2018).
In the following part there will be detailed analysis of the market where the company can
successfully diversify its business to earn more revenue from the global market in an effective
and efficient manner. Furthermore, the leadership style will be also covered that can help the
company to apply strategies in its business to the certain extent (Bartolo, 2016).
Advice for Diversification
Management and management has a close link in each corner of a good company, they cannot
separate each other as each have to balance each other in several respects.Many writers and

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researchers argued that management is radically different from leadership and that leadership is a
management studies expertise with which irreversible globalization variables have to be changed
with the environment.There are hundreds of alternative and composite forms of leadership. Three
main categories of styles can be summed up: totalitarian, democratic and laissez-. Understanding
which leadership style is a crucial step in improving the team's skills (Babin, 2015).
Costa Coffee is considering as one if the top café in the international market. The company has
earned great brand value in coffee industry. The company is acquired by Coca Cola which is one
of the international brands in the global market. Costa coffee pushes Ice Cold range which covers
all kinds of soft drinks. However, it is not diversified in other industry.it resist the company to
target other market in theglobal market. It can use its effective leadership style and management
style in the diversified business that can help to grow in the competitive market and it can help
them to enhance its platform for revenue in an effective as well as in an efficient manner. Costa
coffee follows transformational leadership style that forces them to grow in the market in
innovative manner (Bacon, 2009).
Costa Coffee stimulates drives and promotes staff to evolve and progress that continues to
expand and influence the company's potential success. This is achieved by establishing a firm
sense of organizational culture, staff empowerment and workforce freedom at the executive
level.They empower and encourage their employees to take decisions in their allocated positions,
without micromanagement — they trust qualified workers to take charge. It is a management
style that provides staff with greater room for innovation, looks ahead and seeks new approaches
to old problems. Leadership staff is also able become transformative leaders through mentorship
and educating themselves (Blouin, and Macchiavello, 2019).
Such leadership style will help Costa Coffee to diversify its business in more effective manner.
Therefore, in order to analyze the market Costa Coffee can launch food stuff which is kind of
restaurant in the market that can help in providingwider range of consumers in an effective
manner. With the help of transformational leadership style, the company can enter in the
hospitality industry. It is the related industry that will help Costa Coffee to lead in the
competitive market by providing wider choice of products to the consumers (Maamoun, 2019).

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When a corporation introduces a new product or develops into a different market, diversification
takes place. Organizations also diversify to mitigate risk by reducing possible losses to the
business during economic downturns. The basic concept is to grow to a market that does not
respond adversely to the current business operation as economic downturns. When one product
leaves the recession, one of the other firms tends to cover for losses and keeps the business alive.
Diversification may also be used as a growth tactic by a business (Jang et al, 2018).
The integral part of any society is food. The individual can find business places selling snacks,
beverages and sweets anywhere you are going, around the country. The restaurants range from
informal pizza and food vans to hotel kitchens and formal organizations. Restaurants typically
rely on a theme, like a selection of cuisines or food from a specific culture. In 2019, revenue in
the market will be $863 billion. The sector plans to hire 15.3 million workers, which constitutes
nearly 10 per cent of the population, in 2019. This is 4 per cent of the US GDP.Around 40% of
households had over $70,000 in annual revenue. Thus, 40% of the total restaurant expenses
accounted for 63%. The rise of households with higher incomes has risen slowly over the years,
adding partly to the rise in restaurant revenues.Food and service efficiency has been the hallmark
of the restaurant industry for decades. Restaurants differentiate the industry from so many
businesses that offer excellent food and exemplary service. Therefore, it provides an opportunity
to the Costa Coffee to diversify its business in restaurant business. There are certain benefits that
can earn by Costa Coffee while diversifying its business in the other industry as that are
explained in the below points:
 Higher profits and income are apparent results of diversification. It is impossible for a
corporation to boost earnings if a large part of a business has been secured as new
consumer purchases have no space for it. The introduction of new business area of a
consumer product or service gives the opportunity to exponentially grow.
 The level of dependency will be reducing of Costa Coffee while they will diversify its
business in other segment. They should have enough a coil to bear the lack of a main
customer because Costa Coffee is searching for an alternative.
 It helps in maximizing the use of potentially underutilized resources that can help them to
control over their cost to the certain extent.

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 Brand Image of the company will also get famous in the internationalmarket that makes
them recognition in the competitive market at global level. It can enhance its goodwill at
please where it is not entered yet such as in the US market. With the diversified portfolio,
the company can able to cover maximum range of consumers to the certain extent
(Nishida, and Remer, 2018).
Therefore, it is benefit to Costa Coffee to the certain extent. The decision of diversification will
provide new business growth path to the company which will help in providing new platform for
earning revenue to the certain extent (Wu, and Ma, 2018).
Alternative strategies
There are certain strategies that are already adopted by the Costa Coffee that help them to cover
global market and lead in the market to the certain extent.If there is some hint of the complexity
and nature of the types of businesses and their diversification plans, then the path could shift
radically between firms. Yet as you investigate how firms break out, or even alter their
personalities altogether, general themes appear. However, there are certain other alternative
strategies as well that can be adopted by Costa Coffee which can provide new opportunities to
them and can help them to cope up from the challenges to the certain extent as they are explained
in the below points:
Lowering Prices
In order to analyze the pricing strategy of Costa Coffee’s product it has been found that it
maintain premiumpricing strategy that cover only particular or high income level of consumers.
Therefore, Companies aim to lure customers away from rivals by dropping rates. The benefit is a
larger share of the market, but it costs: fewer margins per product. This approach is particularly
appealing for large companies with substantial economies of scale, which allow them either to
operate at a lower marginal cost than their rivals or to operate at a loss if necessary. It's risky
because if prices go down, it will be impossible to increase them again, because the firm does not
regain adequate market share to improve its rivals (Nyadzayo, Matanda, and Ewing 2016).

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Promoting the Brand
Another tactic is to adjust its marketing strategies, including increasing the promotional budget
and leveraging the selling influence of the product. Based on how often businesses recognize the
particular problems to be addressed, it is very effective, but just an expensive activity, to
experiment with promotional research. Advertisement, publicity and promotion is a tried-and-
tested way to successfully restore market trust, but bear in mind that ads is a constant cycle and
the competition always invests money on advertising (Maamoun, 2020)
Differentiation
Costa Coffee can make its product differentiate from its competitors through adopting
differentiation strategies such as attractive promotional strategies, differentiate its product from
other competitors by innovating some flavor in its food. It will help in attracting maximum
number of consumers to the certain extent. They can accesses to the latest, cutting edge scientific
research. The company maintains skilled personals that can help in innovating new products in
an effective and in an efficient manner (Park et al, 2017).
Horizontal Diversification
Costa Coffee can adopt horizontal diversification strategy in which Costa Coffee is concerned
with the introduction of new goods in a different sector of the market (typically forming a new
company). Nevertheless, the new goods and companies are expected to focus on an established
customer base. As with intensified diversification, the new products are tightly connected with
existing products.This approach primarily relies on consumer satisfaction for the transition of
current brands to new goods and companies. The brand image of Costa Coffee is high in the
global market that will help in introducing new product to the company in the global market in
more effective as well as in an efficient manner (Samoggia, and Riedel, 2019).
Comparison
Increasing specific incentive for diversification can be comparable with the different goals of
diversification. This technique helps to remove incentives that are still likely to create
imbalances between the company's product line and the probable climate, while they also adhere
to the necessary product-market make-up. Such options will yield greater results than if the

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company is financially willing to grow to a significant degree and is new to the market. The
corporate climate today is extremely competitive. The emphasis on these solutions may be
helpful to cope with the market level. Whether you want to diversify and grow your organization
or simply concentrate on basic elements such as price differentiation and product differentiation
will have a big impact on your industry (Vegro, and de Almeida, 2020).
Culture and Leadership and Their impact
There is a strong connection between the structure and culture of an entity. In this article,
recommendations for creating successful team work are given for the efficient management of a
system and community. The study is created as simply as possible to help administrators
understand the importance of hypotheses and their implementations.An organization's overall
success and management are primarily determined by the essence of its policy, structure and
culture. The corporate strategic components are business goals, goals and policies which also
decide the organization's structure and processes. Community defines the execution of corporate
processes (Widuri, and Sutanto, 2019).
Costa Coffee principles such as the meticulous choice of the best coffee boats can have a
significant effect on the work of the staff and teams, focus on environmental protection and seek
to get the waste to zero, to create unforgettable interaction for our clients.The objects constitute
the final layer in the framework of corporate culture. The objects are the concrete and
recognizable elements of the corporate history of Costa Coffee. Definitions of these items
include open door protocol, workplace configuration and staff dress code. Costa Coffee's cultural
artifacts can clearly be viewed from the outside, but are hard to comprehend (Wojciechowska,
2015).
Core Value cannot be readily detected. The fundamental beliefs of Costa Coffee are the basic
goals, ideals and norms. Such main principles are transparency, diversity, consistency,
teamwork, enthusiasm. The management of Costa Coffee knows the importance of sharing core
principles so that all workers can embrace and change their behavior.Core Value cannot be
readily detected. The fundamental beliefs of Costa Coffee are the basic goals, ideals and norms.
Such main principles are transparency, diversity, consistency, teamwork, enthusiasm. The

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management of Costa Coffee knows the importance of sharing core principles so that all workers
can embrace and change their behavior (Wu, and Ma, 2018).
Internally, rather than externally, Costa Coffee corporate culture is guided. While the top
management guarantees that the changing consumer demands are addressed rapidly, it also
communicates the value of a responsible strategy when meeting the business requirements.
Including ethics and honesty in its corporate processes is a firm responsibility of the group. The
internal corporate culture allowed the company to use its ethical brand identity as an instrument
in order to gain a strong competitive advantage over competing firms. Furthermore, the study of
the society of Costa Coffee shows that the organization is closer to a hierarchical working
community with vertical hierarchy and strong structure. The board fails to determine and actively
controls the working actions of workers. Creative and creative working habits are promoted by
the encouragement of workers with varying monetary and non-monetary incentives, but
flexibility and freedom are constrained by the tendency of companies to strict job discipline
(Nyadzayo, Matanda, and Ewing, 2016).
Moreover, the organization encourages its workers 'ethical mindset. For a single context, there is
no requirement to do so. The Costa Coffee encourages individuality and appreciates disparities.
The incentives offered by these positive gaps are abused. The example of Costa Coffee illustrates
how important it is to maintain a competent corporate culture in a much diversified setting.The
Costa Coffee's open cultural framework has facilitated high-info flow to exploit employee
experience, talents and abilities from diverse backgrounds. The global companies, including
Costa Coffee, consider these considerations as critical for reacting rapidly to evolving consumer
demands in many geographical areas.The cumulative study shows that these cultural aspects also
interact. For example, Costa Coffee prefers to align her orientation towards means and aims and
has a more proximate inclination toward the medium orientation, which has to do with her
inclination towards the inner aspect. They also stress the principles and dignity of the corporate
cultures and the propensity towards a single dimension (i.e. mean orientation) forecasts their
tendency towards a second dimension (e.g. community oriented internally) (Bartolo, 2016).
Costa Coffee leadership needed to face the emerging problems of its own organization, along
with the external issues such as the recession and intensified competition. Costa Coffee's network

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and product range were extended and the partners, philosophy of the business, activities, and
marketing were influenced in various ways. The business is closely associated with workers and
society. These ties became the animating force of the company and both its internal strategic
judgment and its public identity played a significant part (Mason et al, 2018).
Impact of such culture on Strategic management
The organizational culture and leadership style of Costa Coffee will have great impact over the
strategic execution to the certain extent as they are discussed below:
Costa Coffee is thoroughly dedicated to learning, seeking and rising leadership in the world.
Regardless of the style of organization, leadership plays a vital role in the development of high-
level teams. Owing to the growing environmental issues and globalization of the company,
members face more confrontations than ever before. Not only does the present era require a
competitive advantage and a relentless productivity but also the defense of ethical principles, the
exposure of social accountability and the establishment of a healthy and equal working
environment due to which Costa Coffee can easily take effective strategic decision that will help
them to grow in the competitive market in an effective as well as in an efficient manner (Felton,
2018)
Furthermore, Costa Coffee will also manage the innovative strategy in more effective manner
with the help of healthy organizational culture as well as leadership style. The manager will able
to guide its employee in more effective manner that will provide new path of growth for the
company more efficiently. Therefore, such cultural and leadership style will have positive impact
over strategic implementation (Wu, and Ma, 2018).
Conclusion
From the above analysis it can be concluded that Costa Coffee is one of the leading café in in the
international market. It expanded its business in the international market that affected the overall
growth and development of the company to the certain extent. The company should diversified
its business in other segment as well that will help them to grow more efficiently in the market.
Costa Coffee is one of the lead rand. Therefore, they can use its image while introducing new

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product in the market. The company can introduce innovative food stuff which majorly covers in
the restaurants. It will help n creating the choices for the consumers which can satisfy them
more. The effects in diversification indicate higher sales and wages. If much of a product is
protected, when new customer sales have no space for it, a product cannot raise profits. It is
possible to rapidly expand the new market division of a customer or utility sector. There are
some alternative strategies that Costa Coffee can adopt which include lowering price, horizontal
diversification, differentiation and so on that can help them to successfully diversify the business
in an effective manner. Furthermore, The Costa Coffee culture review reveals that the popular
companies do not pursue an intense cultural outlook, but rather aim to find the right mix to build
an effective community. Costa Coffee effectively developed a vibrant, profoundly integrated
organizational culture that is broadly adopted by its diversified workforce.Once a company
effectively harmonizes its structure, ethos and organizational strategy and recognizes the
dynamic interaction between core beliefs, essential principles and measurable practices, the
corporate culture can then be used as a weapon to achieve competitive advantages. Costa Coffee
is an example of how companies with a good work culture protect their place in the
hypercompetitive industry. It positively affect over the strategic execution in an effective
manner.

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