Starbucks Case Study: SWOT and PESTLE Analysis, Influence of CSR, Leadership Styles, and Organisational Culture

This case study explores various aspects of Starbucks, including SWOT and PESTLE analysis, the influence of CSR on business, different leadership styles, and the importance of organisational culture.

Starbucks Case Study

Table of Contents
Introduction......................................................................................................................................3
1. SWOT and PESTLE Analysis.................................................................................................3
2. Influence of CSR on business..................................................................................................5
3. Different styles of leadership and suitable style of leadership for Starbucks..........................6
4. Importance of organisational culture.......................................................................................8
5. Reflection.................................................................................................................................9
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................12

Introduction
Starbucks Corporation is known as an American multinational chain of the roaster
reserves and coffeehouses headquartered within Washington. It is known as the one of the largest
coffeehouse chain. The entity operates over 30,000 locations all over the nations within more 70
nations. Starbucks serves cold and hot drinks. Present report focuses on PESTLE Analysis,
SWOT Analysis and Influence of CSR on business. Report also focuses on various styles of
leadership and suitable style of leadership for Starbucks. Furthermore focuses on Importance of
organisational culture
1. SWOT and PESTLE Analysis
PESTLE Analysis
Political
There are several factors included in this factor of macro environment. Elements affecting
Starbucks involve, political stability in home country that is US, political stability in home
country that is US, changes in policies and regulations because of Covid-19, political relations of
US with other countries because Starbucks is a multinational organisation, developing countries
getting more politically strong.
Economical
Element of this factors involve exchange rate, economic condition of country, taxation and cost
of operations in a US and in other countries, increasing cost of labour for completing
organisational operations.
Social
This environment consists customers and their choices several elements are part of this factor.
Presently due to Covid-19 customer preferences have changed and customers are avoiding going
out and in places like Starbucks and cafe (Sarsby, 2016). Starbucks is a premium coffee chain
and its image and brand value plays important role in its success Starbucks needs to change its
process according to new rules and regulations.

Technological
This factor involves Innovative technology, implementing technology for creation and
manufacturing for coffee and other products. Technology to deal with current Covid-19 situation
is also required.
Legal
This involves increasing regulations for food safety and standards, licensing regulations and
changing employment regulations because of Covid-19.
Environmental
Influence of this factor is as follows environment rules and regulations, resourcing sustainability,
utilising high quality and sustainable resource and material, and effective management of waste.
Because of Covid-19 crisis people have become more environmentally conscious.
SWOT Analysis
Strengths
 Effective brand value and image of Starbucks
 Financial performance of Starbucks
 Growth and existence of Starbucks in all over world
 Product development strategy of organisation
 With help of its strong resources and capability Starbucks can change its processes to
deal with Covid-19 crisis
 Effective quality, taste and standardization (Simões, 2020)
 Trust that customers have on Starbucks can contribute in its growth again after Covid-19
crisis
Weaknesses
 Premium prices are losing their value because of extensive growth that reduced its
exclusiveness
 Products of Starbucks can be easily copied by its competitors

 Standards of products of Starbucks are standardised for all its products
 There are several brands that can provide similar products and at affordable prices. This
enhances competition in the industry for Starbucks
Opportunities
 Creating products and services that are according to changing requirements of the
customers. This mainly involves changing requirements of people as a result of Covid-19
crisis. This means that offering healthy food that is made with natural and sustainable
resources
 Using partnership and strategic alliances for further growth and expansion of Starbucks
 Using price and promotional strategy and communicating safety standards effectively
Threats
 Frequently changing customer preference and taste creates challenge
 Economic recession and effect of Covid-19 crisis
2. Influence of CSR on business
Corporate social responsibility is self-regulatory framework for businesses that
contributes in achievement of social goals and objectives of the organisation. There are several
impacts of CSR on business and among all other effects that CSR has one of the important is
image and goodwill that is build and developed by CSR activities of organisation. With help of
CSR company becomes socially accountable. This means that company become accountable
towards its stakeholders, customers and general public. Engagement of business in terms of CSR
contribute and enhance overall value that organisation provides to society and different
stakeholders (Advantage, 2020). There are several ways in which CSR influence business and
decisions of business. This influence decisions regarding products of the company and value
products provide to customers. This also influences decisions regarding price of the product,
marketing and promotions of the product. Effective CSR practices have several influences on
business in which public image of the Starbucks gets enhanced. This also contributes in
increasing brand awareness and consciousness, competitive advantage for the business. CSR
other than this also contribute in improving internal processing of the organisation in which its

employees get more effectively engaged in organisational activities. Starbucks also undertake
several practices in context of CSR. These practices are-
Ethical and sustainable sourcing- In this CSR practice Starbucks offer high quality of products
that have been ethically purchased and responsibly produced
Creating opportunity- By this practice they provide opportunities to their employees through
the means of training and development and education. Under this practice of CSR different
elements involved are coffee, farmer support, tea and cocoa. In this expect farmers others are
resources and farmers are part of ethical trading.
Strengthen communities- In this practice of CSR Starbucks offers a place for public
conversation and elevating civic engagement through its different services.
Lead in green retail- In this practice of CSR Starbucks expresses its commitment for reducing
environmental footprints and also inspire others to do the same
Environment- This is a context rather than practice in which Starbucks undertake several
practices for enhancing environment and minimise their environmental footprints. The practices
for reducing environmental footprints are recycling, energy, water, and green buildings.
Diversity- As per this practice of CSR by Starbucks it express its commitment to involve and
welcome diversity of people and ideas in Starbucks (Freeman and Dmytriyev, 2017). They are
engaged in increasing opportunities for learning and success that benefit customers, partners, and
suppliers of Starbucks.
These are different practices and context in which Starbucks perform its CSR practices.
These practices cover wide range of areas such as community, environment, employees etc.
3. Different styles of leadership and suitable style of leadership for Starbucks
There are several styles of leadership that are adopted and practiced by organisations.
Leadership style plays an important role in overall success of the organisation. Styles of
leadership are as follows-
Autocratic Style

This style of leadership involves that leader is responsible for making all decisions and
there is little input of employees. This approach of leadership is also known as command and
control. This means leader take all decisions and employees are only required to follow decisions
of leader.
Participative Style
This style of leadership is also responsible for decision-making but the difference is that
employees are asked for their opinion. Additionally, in this style of leadership opinion and
information provided by leader is highly valued and also become basis for the decisions
(Gandolfi and Stone, 2018). This encourages employees to share their opinion and ideas and add
creativity in the decision of leader. These are several benefits of this leadership style it uses
creativity of employees, encourages and motivate employees to engage with their work.
Laissez-Faire Style
This is another style of leadership in which leaders are not responsible for decision-
making for employees. This style is completely opposite of autocratic leadership style. This
involves least participation of leaders and their oversight. Leaders in this leadership style express
their trust on employees and delegate responsibility to employees regarding their job role and
responsibility.
Transactional Leadership
In this leadership style leaders set clear goals for team members or subordinates and also
explain and communicate regarding rewards for their compliance. This means they are told about
goals and subsequently what rewards they will get on accomplishment of goals. This leadership
style is more concerned with following routine and procedures effectively.
Transformational Leadership
This is another style of leadership in which leader inspires their followers and
subordinates with a clearly defined vision (Huertas-Valdivia, Gallego-Burín and Lloréns-
Montes, 2019). Followed by this they empower and encourage subordinates to achieve the
vision. Leader in this style also serves as a role model for the subordinates and employees.

This discussion outlines that styles of leadership in several ways are different from each
other. They are different on the basis of decision making power and role in decision-making.
They also differentiates on the basis of trust that leader have on their subordinates regarding
competency and capability of decision making. This also differentiates and contrasts to each
other on the basis of their role in motivating and encouraging to subordinates and employees.
On the basis of above discussion, it can be said that participative leadership style is the
one that will help Starbucks grow. The reason behind this is that participative style is one which
employees of the organisation can share their opinion, ideas and suggestions regarding their job
role as well for organisation as general. This will enable Starbucks to use creativity and
knowledge of employees and at the same time this will also ensure that ultimate decisions
making power is with leader. This will avoid any kind of potential conflict that can arise in
Starbucks because of difference of opinion.
4. Importance of organisational culture
Organisational culture can be defined as underlying values, beliefs, assumptions and
ways of interacting within an organisation that guide actions of individuals and team in a
organisation. Every organisation has their culture and there are different reasons because of
which organisational culture is important for an organisation (Laforet, 2016). Culture of
organisation has significant importance for the processes that are carried out in the organisation.
Culture of organisation ensures that organisation has best people, having best people in
organisation is similar to having best quality of the operations being undertaken at the Starbucks.
Other than this, culture also makes significant impact on the performance of employees and
when employees of Starbucks are working effectively they are more productive for the
organisation. Culture of Starbucks is based on certain values and mission of Starbucks, the
mission of Starbucks is to inspire and nurture human spirit – one person, one cup and one
neighbourhood at a time. Other than this, values of Starbucks encompasses creating a culture of
warmth and belongingness, where everyone is welcome, delivering very best in what they do,
holding ourselves accountable for results, acting with courage, challenging the status quo, and
identifying new ways to grow company and each other. These are some of the values of
Starbucks that reflect that it has a focus on quality of the process at Starbucks (Carvalho and
et.al., 2019). They are ensuring effectiveness in quality along with ensuring that people in

organisation are accountable for the success and failure of the process that has been completed
by them.
Additionally, culture of inclusion in Starbucks is important for ensuring that process of Starbucks
is carried out using different types of knowledge from different individuals. Practices for
corporate social responsibility, ensures that process of the organisation are ethical, sustainable
and are based on socially responsible practices. Training and development culture is important
for ensuring that employees are ready for challenges coming in their way in future.
This culture of the Starbucks suggests that its culture has significant influence and impact
on the processes of Starbucks. This is because culture encompasses values and beliefs of
Starbucks and further becomes basis for how the processes will be carried out in Starbucks
(Nazarian, Atkinson and Foroudi, 2017). Culture of Starbucks involves quality, sustainability
and inclusion and because of this employees and members of Starbucks become conscious for
carrying out processes with quality.
5. Reflection
Completion of this assignment contributed in developing knowledge and understanding
of different areas of knowledge and academic concepts. For the purpose of this assignment I
researched about several concepts and this helped in increasing knowledge and clarity of
concepts. This also enhanced knowledge of different internal and external elements of Starbucks
and its environment. Assignment also helped in understanding SWOT analysis and its
application for Starbucks. Further, I also identified and researched about PESTLE analysis and
its application for organisation. This involves different elements in external environment of
organisation and how they affect functioning and operations of the Starbucks. Later this
assignment also involves CSR and its influence on business and its activities. For the purpose of
this assignment I made extensive research for the topic of CSR and how it affects operations of
business. I also researched about CSR activities and practices of Starbucks. This enhanced my
knowledge about the scope of practices that are involved in CSR and how these practices are
completed by multinational organisation like Starbucks. Further, I also researched about different
styles of leadership and suitability of leadership style that can contribute in growth of Starbucks.
This research and education about leadership style enhanced my knowledge in increasing and
enhancing existing knowledge of leadership styles. I also get to learn about different styles of

leadership and what are their advantages and disadvantages. In order to determine suitability of
leadership style for growth of Starbucks, it is important that I firstly learn what positive and
negative effects of each leadership style are. This assignment discussed about participative,
autocratic, transformational, transactional leadership styles and I learned about advantage and
disadvantage of each of these leadership styles. Additionally, this assignment also helped me in
understanding suitability of leadership style in different situations and in different organisations.
I realised that participative leadership style is suitable for Starbucks because of its advantage of
including everyone at the same time holding control over final decisions. Later this assignment
involved organisational culture and their effect on processes of organisation. In order to
understand importance of organisational culture on process of organisation, it is important to
understand organisation culture. Understanding of organisation culture subsequently led to
understanding organisation culture of Starbucks and its importance in process of Starbucks. I
learned several elements of organisational culture and its importance in process of organisations.
Completion of this assignment overall made significant impact and influence on my knowledge
and understanding. With help of this I got clarity of concepts that were previously known by me,
further I also get to know several different concepts for the first time and I also learned about
Starbucks. Starbucks is a leader in its industry and this is why having knowledge of its processes
and different elements helped in understanding what are practices and processes of multinational
organisation.
Conclusion
From the above it had been concluded that several factors such as political stability,
Changes in policies and regulations because of Covid-19 and taxation and cost as well as
customers are avoiding going out due to and hence Starbucks suffered a lot. Report also focuses
on the Strength of star bucks such as financial performance is strong while Weaknesses such as
Premium prices are losing their value and threats like within market similar products and at
affordable prices are also available for the consumers. Starbucks assures that processes are
ethical based on socially responsible practices and culture, beliefs and also involves quality as
well as Sustainability. It focuses on Reflection that focussed on knowledge of different internal
and external elements of Starbucks and focused on certain values that have best quality of the
operations being undertaken at the Starbucks. Furthermore focused on Autocratic Style,

Importance of organisational culture such as Starbucks inspires and nurture human spirit and
creating a culture of belongingness and focuses on autocratic Style, transformational leadership
and transactional leadership.

REFERENCES
Books and Journals
Advantage, C., 2020. Corporate Social Responsibility. CSR and Socially Responsible Investing
Strategies in Transitioning and Emerging Economies. p.65.
Carvalho, A.M and et.al., 2019. Operational excellence, organisational culture and agility: the
missing link?. Total Quality Management & Business Excellence. 30(13-14).
pp.1495-1514.
Freeman, R.E. and Dmytriyev, S., 2017. Corporate social responsibility and stakeholder theory:
Learning from each other. Symphonya. Emerging Issues in Management. (1). pp.7-15.
Gandolfi, F. and Stone, S., 2018. Leadership, leadership styles, and servant leadership. Journal
of Management Research. 18(4). pp.261-269.
Huertas-Valdivia, I., Gallego-Burín, A.R. and Lloréns-Montes, F.J., 2019. Effects of different
leadership styles on hospitality workers. Tourism management. 71. pp.402-420.
Laforet, S., 2016. Effects of organisational culture on organisational innovation performance in
family firms. Journal of Small Business and Enterprise Development.
Nazarian, A., Atkinson, P. and Foroudi, P., 2017. Influence of national culture and balanced
organizational culture on the hotel industry’s performance. International Journal of
Hospitality Management. 63. pp.22-32.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
Simões, E.N., 2020. A decision support system application module-for PESTLE analysis-
competitive intelligence algorithm (Doctoral dissertation).
Online
Expect more than coffee. 2020. [Online]. Available Through: <
https://www.starbucks.com/careers/working-at-starbucks/culture-and-values>.
The 7 Most Common Leadership Styles (and How to Find Your Own). 2019. [Online]. Available
Through: <https://www.americanexpress.com/en-us/business/trends-and-insights/
articles/the-7-most-common-leadership-styles-and-how-to-find-your-own/>.