Starbucks Case Study

This case study focuses on Starbucks, an American international chain of coffee houses. It includes a PESTLE and SWOT analysis, evaluation of CSR practices, comparison of leadership styles, and the importance of organizational culture.

Starbucks Case Study

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
PESTLE and SWOT analysis for Starbucks...............................................................................1
Evaluation of CSR practice and their influence on business......................................................3
Compare and contrast about different style of leadership along with a suitable style of
leadership for Starbucks .............................................................................................................5
Importance of organisation culture on the process of Starbucks................................................6
Reflection report.........................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Starbucks corporation is recognised as an American international chain of coffee house
and roastery reserve that is headquartered in Seattle, Washington. It is one of the world's largest
coffee-house chain which manage it's coffee business at different geographical areas. In the
existing scenario, Starbucks provide and offers a wide variety of coffee products. This report
highlights on the case study of Starbucks and their management system for analysing the gaps or
reasons for failure of business. Moreover, this report highlights on SWOT and PESTLE analysis
of Starbucks and the evaluation of CSR practices to analyse their influence on business (Chang,
2014). Different style of leadership along with suitable leadership practice for Starbucks will also
included in this report. In the last, organisational culture with their importance is focus in the
upcoming report.
TASK
PESTLE and SWOT analysis for Starbucks
Starbucks formally knows as (Starbucks Corporation) stand as one of the world's largest
coffee-house chain. It was founded in the year 1971 and well-known for serving their hot and
cold coffee. The transnational information about organisation also leads management to expand
their business by understanding environmental aspects. SWOT and PESTLE tools help Starbucks
management to analyse market.
SWOT analysis of Starbucks.
Strength
 Quality and profitability- Starbucks is
known as a premium coffee-house
chain due to its world wide presence
and quality products so it work as a
strength for business (Chang, 2020).
 Efficiency and reinvestment strategy-
Profits leads organisation to expand
their business. Starbucks management
implement well-planned growth
strategy, which work well for them.
Weakness
 High price- The cost to prepare quality
products is high and it also increase
cost of coffee. So for middle and lower
class it work as a weak point for
business.
 Lack of Unique products- Most of the
Starbucks products are common as they
exist in market from several years so
reduce the number of unique products.
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 Employee treatment- The working
environment of Starbucks is positive
that place company in the Fortune's top
place.
 Location- Starbucks store are only
present far from the prime area of city.
So distance is another weak point for
business.
Opportunities
 Expansion of business- Starbucks has
opportunity to expand their business in
variety aspects. This determines
increase in assortment of products
improve customer base.
 Co-branding- Starbucks prepare coffee
and also deal in coffee-beans. So by
selling its products with engagement of
local brands helps to minimise the
weakness of location by providing
products in different market.
 Medium range of products- By
managing price of coffee such as
average cost leads to improve number
of customers.
Threats
 High competition- Some products of
Starbucks are directly compete with
Dunkin' Donuts and McDonald's which
generate threats for respective
organisation (Bonsu, 2019).
 Specific market- Starbucks partially
attribute popularity their coffee-bean,
teas and snack but it is well-known for
cold and hot coffee. So the threat
relates with specific market.
 Primary business- Organisation
focuses only on primary areas due to
which the threat to invest high cost is
also increased.
PESTLE analysis of Starbucks
 Political- The main political factor for Starbucks relates with the source of raw-material.
It gather a lot of attention from the European government policy due to its flexible policy
(Cho and et. al., 2017). Starbucks face pressure from the market of US due to its multi-
national based scrutiny of business. So activism and awareness about political aspect
support to manage business in different areas.
 Economic- Global economic recession is defined as an external driver that is increasing
profitability of business. This refers that cheaper alternatives is known as an effective
option for managing operations with low cost aspect. Example- Minimum currency
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exchange rate and low tax policy improve budgets for Starbucks to manage business in an
organised manner.
 Socio-culture factor- The issue faced from perspective of society relates with cost of
products. But with low price customers also need to sacrifice the quality. So the solution
relates with influencing buyer through advertisement and other techniques to buy coffee
from Starbucks.
 Technological factor- Starbucks is in the top position within market so it is easy for
management to enjoy mobile benefits related with technology (Du Plooy, 2016). Like,
partnership with Apple offer to bring the app based discount in order to use technology
among Starbucks outlets. Moreover, free WIFI facility also improve customer experience
which add more value in company brand.
 Environmental factor- Several times Starbucks business practices is consider
inappropriate by the environment activists. Further, sometimes customer also express
their issue that impact on company brand. It is also used by management to complete
work by improving company goodwill.
 Legal factor- Starbucks ensure that rules and regulations are not violate and it is also
used by management to perform all work in an ethical and organised manner. Example-
Starbucks introduce and utilise caffeine products that are prefer by health authorities.
Evaluation of CSR practice and their influence on business
CSR (Corporate Social Responsibility) is defined as an organisational commitment that is
used for managing the social, environmental and economic impact on company operations. In the
context of respective organisation Community, Ethical sourcing and Environment are three
pillars of Starbucks CSR practices. Some which is more efficient for management are mention as
follow:
 Community store- One of the major factor that is analysed while understanding macro
environment of business relates with socio-culture. Due to the high price of products
most of the individuals generates perspective that profit earning is the main motive of
Starbucks (Jo and Kim, 2017). So community store aids individuals to develop the
image of non-profits by formulating partnership with local communities. Moreover, aim
of community store is to meet with the needs of society in which Starbucks manage
their business. Apart from this, diversity among workplace is also managed by
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management through engaging individuals from all backgrounds in community store of
Starbucks.
Positive- Community store improve the goodwill of organisation in the society by providing
their effective services with the motive of fulfilling society needs.
Negative- The needs of society are dynamic and change with in a short span of time which
generate challenges for Starbucks to complete work with decided standard.
 Ethical sourcing- It is defined as the second pillar which dictates the method through
which Starbucks purchase their products (Kang and Namkung, 2018). Primary business
and limited range of products work as a weak point for Starbucks. So with the CSR
practice of ethical sourcing organisation is committed towards enhancing number of
customers and market area by demonstrating individuals that their products are ethical
and also of good quality. Further, success of Starbucks business also linked with
supplier so it work as a positive point for individuals to work with ethical manner.
Positive- In the context of ethical sourcing it is identified by management that ethical aspects
perform an important role because it improve brand value and goodwill of organisation.
Negative- The geographical area which is covered by Starbucks is too broad and wide and each
of them follow their own ethical standard. Thus, it is difficult to follow rules all ethical practices
related with Starbucks.
 Environment- One of the major challenge which is faced by the organisation relates with
the environmental aspects and it is concerned about the safety of environment in which
Starbucks manage their business. On the other side, raw-materials such as coffee-bean are
also obtained from coffee plants (Li, 2017). The priority of Starbucks depends on
environment as with CSR environment pillar of Starbucks it is easy to measure and
evaluate all programs by analysing their impact on environment perspective.
Positive- Customer's of organisation face challenges from the perspective of environment safety
and it is used in managing work by completing all task in proper manner.
Negative- Each aspects of Starbucks relates with environment areas for business it defines that
company face complexity to highlight on company strategy for managing work in an appropriate
manner.
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Compare and contrast about different style of leadership along with a suitable style of leadership
for Starbucks
The term Starbucks is defined as a brand that is recognisable among different
departments of business. In the context of organisation it is identified by management that there
are various areas exists in business but due to difference in areas. This also adopt about buyers as
it is used to complete all task about managing impacts that the reason for success and it is used in
managing areas that drive about the areas which is managing existing environment. Recession
and pandemic conditions are the reason related with business area it also refers that organisation
is facing challenges because of unawareness about leadership style (Popov, 2017).
Comparison between two leadership style
In the context of organisation it is identified by management that autocratic leadership style is
defined as a method that leads individuals to manage work as per the decisions of management.
On the other side, manager seek about decisions which helps management of Starbucks to retain
individuals for longer period. This results individuals are demotivated due to the change in
business management and it is used to consult about decision making.
Apart from this, democratic leadership style is used in making long term decision making
process and it relates with the control of manager. This seeks that individuals helps to retain
individuals for longer period through managing company task in an accurate manner. Leaders
and managers are responsible for managing task as per decided strategy. Therefore, with an
effective leadership style it is easy to manage all work with more efficiency that helps in
completing all task with simple approach (Renanda, 2019).
Parameter Autocratic Democratic
Flow of authority Autocratic leader follow centralized
structure to make organisation
decisions.
Democratic leader engage all
individuals to participate in
decision-making.
Level of control The control power of autocratic leader
is high.
Control of all operations is at
minimum level.
Implement of
leadership style
In most cases where individuals are
unskilled, obedient and uneducated.
Most of them are professional and
experienced.
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In the context of Starbucks, democratic leadership style is one of the most effective way
that is leading organisation for performing their work at global level. This determines there are
different task is used that is leading management to control all decisions by analysing the
solutions from perspective of all persons. It defines there are various task performed by
management which make better judgements, belief and idea. Example- Starbucks face neglect
and disappoint conditions from the market of Australia because leaders and manager not involve
employee's to take appropriate decisions (Sindhwani and Ahuja, 2014). It refers that democratic
leadership style is most appropriate because it helps to take accurate decisions as lower level
workers are aware and engaged in company operations on regular basis.
Importance of organisation culture on the process of Starbucks
Starbucks is recognised for their great customer experience and it also refers that
employee's who are engaged in the process of Starbucks are need to be more trained and
knowledgeable in order to offer effective products. In the context of organisation culture
Starbucks offer products according to the needs of customer's for performing work at a certain
level such as to follow formal approach for performing company operations in an appropriate
manner. Material culture is followed by Starbucks. Example- With hearing the word Starbucks
the logo and image of Starbucks come in the mind of individuals. The main concept to
implement material culture is used to recognise the company name only with the design of cup
and logo. Organisational culture of Starbucks is well-known for their role through offering coffee
into recyclable cups. One of the major benefit relates with paper cups of Starbucks define the
ways that aids to serve hot beverage and it is also used to save environmental impacts. It is also
used by organisation culture of Starbucks that helps in managing the commitment towards
environment as it also represent the coffee culture. Like, Starbucks culture motivate employee's
and it is also used to reduce waste form environment by formulating effective organisational
strategy (Susanty and Kenny, 2015).
With the analysis of CSR practices it is identified by management of Starbucks that
implement of corporate social responsibility at workplace leads an organisation to complete their
work with more productivity. In the context of Starbucks it's employee's are known as baristas as
they represent as face of Starbucks. Moreover, engaged workforce of Starbucks uplift and
generate experience for individuals that leads individuals to visit store in order to generate
perfect beverages. Ethical sourcing, environmental and community centre all practices are
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formulated according to the organisational culture (Typaldos, 2016). It results that experience for
individuals specifically for customer's is enhanced through offering drinks as per requirements of
society.
Reflection report
Starbucks manage and perform their business at global level so while conducting this
research it is easy for me to understand and evaluate international market. One of the major
learning that is gained from this report is to identify and analyse the concept of management and
leadership. Along with this learning related with organisational culture and it's importance helps
me to understand formulation of strategy as per existing market conditions. Organisational
surroundings perform an important role for management and it is used to complete all task with
more efficiency. This refers that by understanding organisational work it is easy for management
to complete all work with more efficiency. Environment knowledge also plays an important role
so with use of marketing tools such as PESTLE leads me to recognise environmental aspects for
business. The overall aspects of this report helps in managing and completing all research with
the decided framework. Like, the opportunity to complete research on Starbucks helps to analyse
different leadership style which are beneficial for managing process of respective organisation.
In the context of learning my skills and dimension are increased to complete research in an
organised manner. Culture and structure plays an important role for organisation and as per
consideration of my work it is easy to complete work with the growth of business. Moreover, the
major perspective that relates with my performance helps in managing research. At the time of
my research I understand that employee's of Starbucks perform an important role for
communicating with employee's with more efficiency. This is also ensure by me that all task
which are performed by me is focused towards upliftment of activities which makes a research
more accurate and organised. Learning and communicating skills plays an important role for the
research and this also helps me to ensure about understanding aspect which is used to perform
work by analysing company process.
CONCLUSION
In the last, with the analysis of above report it is concluded that leaderships style perform
an important role for business as it helps to complete all work with more efficiency. According
to the existing market conditions organisation face major problems due to pandemic conditions
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and it also impact on all business. But with the analysis of organisation management and
leadership style it is easy to overcome from different challenges by completing work according
to organisation strategy. In the last, analysis of overall research leads to involve and undertake
research perspective that improve company position among competitive market.
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REFERENCES
Books and Journals
Bonsu, S., 2019. Strategic Management: The Concept of Competing With Self. Journal of
Marketing and Management, 10(2), pp.20-44.
Chang, C.Y., 2014. Visualizing brand personality and personal branding: case analysis on
Starbucks and Nike's brand value co-creation on Instagram.
Chang, W.J., 2020. Experiential marketing, brand image and brand loyalty: a case study of
Starbucks. British Food Journal.
Cho, J and et. al., 2017. Wrong siren! a location spoofing attack on indoor positioning systems:
The starbucks case study. IEEE communications magazine, 55(3), pp.132-137.
Du Plooy, H., 2016. Developing a channel strategy for a diesel engine supplier in
Mozambique (Doctoral dissertation, North-West University (South Africa),
Potchefstroom Campus).
Jo, A. and Kim, H.S., 2017. A comparison of Starbucks between South Korea and USA through
big data analysis. Culinary science and hospitality research, 23(8), pp.195-205.
Kang, J.W. and Namkung, Y., 2018. The effect of corporate social responsibility on brand equity
and the moderating role of ethical consumerism: The case of Starbucks. Journal of
Hospitality & Tourism Research, 42(7), pp.1130-1151.
Li, P., 2017. Strategies and their effect mechanism of promoting leadership effectiveness of
traditional service enterprises: a case study based on Starbucks coffee. Tourism
Tribune, 32(3), pp.49-60.
Popov, A., 2017. Project of Implementation of Economic Value Added concept for Increasing
Financial Performance in the Selected Company.
Renanda, M.R., 2019. Perancangan strategi pemasaran dengan menggunakan metode QSPM
untuk meningkatkan penjualan pada Kedai Kopi Warga.
Sindhwani, P. and Ahuja, V., 2014. A study of online co-creation strategies of Starbucks using
netnography. International Journal of Online Marketing (IJOM), 4(1), pp.39-51.
Susanty, A. and Kenny, E., 2015. The relationship between brand equity, customer satisfaction,
and brand loyalty on coffee shop: Study of Excelso and Starbucks. ASEAN Marketing
Journal, pp.14-27.
Typaldos, C., 2016. Experiencing the Starbucks Experience-A Cultural Analysis of the Effects
of Glocalization.
Wang, Y., Qiao, F. and Peng, W., 2015. Is the size or the valence of proactive engagement
associated with purchase intention? A case study of branded blogs of
Starbucks. International Journal of Strategic Communication, 9(3), pp.197-216.
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