Understanding and Leading Change in Starbucks

This report discusses the impact of change on Starbucks' strategy and operations, comparing it with Costa Coffee. It evaluates the internal and external drivers of change and their effects on leadership, team, and individual behaviors. Measures to minimize negative impacts of change on organizational behavior are also explored.

Understanding and
Leading Change

INTRODUCTION
Change is a constant phenomena which is ongoing in every business and in world as well.
Industries and operations varies according to the change taking place and in accordance to the
need developed for change and revolution to be introduced (Espedal, 2017). These changing
working scenarios and development taking place in the internal and external business
surroundings bring several change and one of which is leadership and leading variations. The
current report is developed upon these change for understanding their impacts and factors. The
report is developed upon two large competitors in hospitality sector that are Starbucks and Costa
coffee. The whole report will be based upon Starbucks a American multinational coffee chain
which is flourishing operations globally. Starbucks was founded in 1971 and headquartered in
Washington D.C., USA.
The report acknowledges the impact of change taking place over the operational and
strategical implementations in companies. The internal and external environment of company
will be evaluated that affects the leadership. Than moving further, measures will be suggested
which can reduce the negative impacts of change along with discussing the barriers for change
and determining their influence over decision-making of leaders and managers. At the end,
different leadership styles which are useful for dealing with change are evaluated and elaborated.
TASK 1
P1 Compare different organisational examples where there has been an impact of change on an
organisation’s strategy and operations.
Change is a synonym which is continuous in nature and constantly taking place in all the
different scenarios in world including the business environment and business practices as well.
Organisation deals with different forms of change taking place on a regular basis in two markets
unique elements are present that influence the function of change and which affects the business.
Change is a constant and essential phenomena which has impact over business, its strategies and
consecutively on its operations as well. These change have to be analysed and determined by
entities in order to knowledge about the impacts and develop strategies accordingly (Gaubatz and
Ensminger, 2017).
There are various factors that can impact and are responsible for variations taking place
in marketplace and which are subsequently affecting the operations and strategies of business is

belonging to different industries. This factors like cultures, taste, technology, friends and many
other are influential for change and the whole process which pics place due to these factors is
defined as organisational change. In this section of the report the impact of the whole change
process on the organisational operations and strategies are discussed with the help of a
comparison table between two organisations that are Starbucks and Costa coffee.
BASIS STARBUCKS COSTA COFFEE
Introduction Starbucks is recognized as the
largest coffee chain dealing in
in hospitality sector at global
level. The Organization was
founded in 1971 by three
individuals named as Jerry
Baldwin, Gordon Bowker and
Zev Siegel. The company is
headquartered in Washington
DC, United States and
operating through more than
15000 coffee shops in around
50 countries globally.
Costa coffee is a brand which
is known for its coffee beans
and the selection of the best
coffee beans in the world for
making copies and serving to
customers. The company
make coffee with unique taste
and by following traditional
methods. Costa coffee was
established in 1971 as well in
London, United Kingdom.
The company have around
5,000 stores in 31 countries of
the world.
Competency based
strategies
When it comes to hospitality
industry and serving
customers on daily basis need
identification becomes one of
the most important factor and
that brings regular change in
operations as well (Nelson‐
Brantley and Ford, 2017).
Starbucks follow this policy
and make numerous changes
in their menu card very
On the other hand Costa
coffee is coffee store which is
known for the infusions and
mocktails prepared and
served. The major difference
between adopting change in
Starbucks and Costa coffee is
Costa do not focus over
friends and fluctuating needs
of people. Other than this
company always make sure to

frequently by bringing
innovation along with
fulfilling the needs of people.
develop new trends and by
serving new taste to
customers through infusions.
Pricing strategies The pricing strategy of
Starbucks drastically changed
when the company received
high brand name in the
market which impacted the
company in both negative and
positive manner. Few
customers shifted from
Starbucks to other brands but
other Elite classes it attracted
and became loyal consumers
of Starbucks.
In contrary to this Costa
coffee have always kept their
prices high by applying
several different effective
strategies that when the
competitive advantage to the
coffee shop (Doppelt, 2017).
Company constantly making
innovation and infusion
providing new taste and
products to customers which
kept them attracted and loyal
to the brand more over
influenced them to spend
high amounts of money for
receiving the highest level of
value.
Advertising and promotions In relation with marketing
and promotions Starbucks
have always kept it focus on
developing the best marketing
strategies and implementing
them by huge funding and
money engagement (Al
Barwani, Flores and Imig,
2018).
Costa coffee is a flexible
brand which is adaptable to
the market changes taking
place. This phenomena of
organization enabled
company to be flexible
enough and adapt its
marketing plans and strategies
according to the changes and
updated tactics entering the
market.

Operational Change The operational change which
is took place in Starbucks is
closure of number of stores in
the US as the firm was
engaging in lots of cost which
and the stores were
underperforming. This
closure of stores in US which
are underperforming made
available huge funds to
Starbucks which was further
used in company's
development and providing
training and development
sessions to employees.
Costa coffee a very flexible
and adaptable brand is
expanding and the specific
operational change taking
place is of diversification
where company is moving to
markets in which it do not has
its presence and making its
services and products
available to the respective
audiences according to their
taste and preferences.
TASK 2
P2 Evaluate the ways in which internal and external drivers of change affect leadership, team and
individual behaviours within an organisation.
As discussed and elaborated change is a very frequent and a common procedure which
takes place on a continuous basis in the organisation and in the business environment. The
factors that derived organisational change a pathway are categorised into two segments that is
internal and external drivers (Salman and Broten, 2017). These internal and external drivers of
change are discussed and needs in relation with Costa coffee a leading internationally operating
coffee shop that is adaptable enough to the variations taking place in the marketplace.
INTERNAL DRIVERS TO CHANGE
Sometimes there are factors that are present in the organisation itself which brings about
change. These variations taking place in the company changes the leadership, teams and
individuals behaviours and decision-making procedures within the organisation. Few internal
factors of change that are affecting Starbucks its operations and strategies are as follows:

 Change in the Staff- The behaviours of leaders teams and individuals automatically
changes when any variation takes place in workforce and hierarchical structure of
employees (Tombetti and Mason, 2019). For example, In Starbucks new staff comes and
goes on a frequent basis as the people work for earning money and for managing their
daily expenses. This results in high staff turnover according to which the existing and
long-term employees such as managers, team leaders etc. have to deal with it and in their
unique manners as they are different with one another.
 Organisational strategies- The strategies and ideas of operations and running the
functions in an organisation also changes according to the external environment which
brings an internal change. This internal change in Starbucks leadership and the
individuals working because now the plans and working cycle is modified according to
the new operational strategy bringing modification in the working styles of staff is well.
For instance if any new product is launched employees are required to take feedback
from customers for knowing the sustainability of the new beverage or coffee. This
changes the working criteria and requirement of an individual.
EXTERNAL DRIVERS TO CHANGE
The external environmental elements are also referred as macro factors which affects the
operations and strategies of business from outside the firm (Komives and Wagner, 2016). In
order to understand the change being introduced PEST model is applied and elaborated in
context of Starbucks.
 Political factor refers to the changes government is bringing in the political policies and
industrial laws for running the operations in particular industry and in the respective
region. Starbucks is a international brand which exposes it to several different political
environment and it creates a need for leadership to be flexible and adaptable according to
the place in which the store is being operated. For instance, in separate countries labour
laws and regulations are different with varied guidelines and management have to work
in congruence to those laws for safeguarding the firm from any legal actions and political
laws breach.
 Economic environment refers to the economy of the country in which the store of
Starbucks is flourishing. Separate economies in the world specially of United States are
in favour of their domestic businesses as well as other international organisations because

of increasing revenue generation and developing better relations with other countries
(Hughes, 2016). Therefore the leadership decision making will be according to the
economy the changes taking place needs to be adapted and worked accordingly. For
instance, tax policies and economic stability of the United States and the United Kingdom
are different. Comparatively UK has more stable economy which offers Starbucks higher
support and constant market conditions.
 Social trends for a hospitality service organisation is the most influential factor which
changes the behaviour of teams, leaders and individuals. People needs new products and
always be attracted towards innovation which makes it important for Starbucks to
regularly in it and invent. According to this the leaders of different things in Starbucks
has to keep staff motivated to work innovatively in order to render the best services and
products to the customers. For example, the population of UK is known to be a loyal to
one brand and addressed as hardcore customers. Thus, in UK social trends can be
predicted and people preferences are predictable.
 Technology also have influential change impact over the leadership behaviours and
people understanding. new technologies are developing and being adopted by Starbucks
for different purposes that are required by the staff of company to be comfortable with
and understand their usages. For instance, technological environment of UK and US is
very aggressive all new technologies and tools are made available to businesses in market
as soon as possible which is a positive factor for Starbucks as leaders can make sure to
update their coffee producing equipments and render higher productivity to the overall
performance of Starbucks.
P3 Evaluate measures that can be taken to minimise negative impacts of change on
organisational behaviour.
Change management process is suggested to organisations to be adopted for
implementing and executing change plans within the operations of the entity. There are
significant measures available that are considered for eliminating the negative impact of change
who was the business and in the behaviour of individuals. These change management measures
are used for opting the most significant technique for protecting the organisation from any
adverse reactions of change. Moreover these factors can be beneficial for the company and
enable to attain sustainable growth. Thus, minimising the negative impact of change on

Starbucks the management and leadership consider to implied PDCA model of change
management which engages the change in organisation through the most positive ways and
reduces the negative influence. The model has four stages that are reflected below in context of
Starbucks.
 Plan- The first stage of change management model is off planning that is the company
needs to prepare strategic plans and ideas before implementing any change into the
operations of the business. It is suggested to Starbucks that the company should first
conduct an efficient market research for analysing the overall market and relative
scenarios along with you for identifying opportunities that are effective for the company.
Once a market research is conducted Starbucks and the management will be holding
enough understanding about the changes taking place in the market and can develop
appropriate strategies according to the variations long with making sure the opportunities
are significant to the entity (Neumann, James and Vince, 2019).
 Do- The next stages of doing what is being researched and identified. In other words the
organisation is required to determine the strategies in the most appropriate ways that
provides the management a significant to chance to develop suitable plans and strategies
in order to work over change and attain a competitive edge. For Example once market
research is completed by Starbucks and opportunities are identified now the management
will develop new policies and procedures of operations for running them smoothly.
Starbucks have to old an appropriate evaluation of the forecasted possible results in order
to make future comparison with the actual results.
 Check- Third stage of change management model states that the company now needs to
to make effective measurements of the strategies developed through which they are
planning to implement change for growth and betterment of the business and the brand.
At this stage comparison will be conducted by organisation in between the current results
and the expected outcomes that were determined in the above stage (Booth, Wade and
Walker, 2018). These outcomes once compared then the entity should develop corrective
actions and measures to reduce the deviation identified. Hence at this stage the company
will take measures to reduce the deviations and the deviated outcome. Therefore the plans
are needed to be altered in order to attain the sustainable outcomes and standards. For
example Starbucks have developed new marketing strategies and compared the results by

revenues but the original outcome is less than the forecasted one which required which
company to take measures and alter the new promotional strategies in order to reach to
the decided standards and attain the objectives.
 Act- According to the change management model this is the last stage where the
organisation is required to analyse the determined land and implement it accordingly for
or attaining the prescribed objectives. These plans which are being acted upon at this
stage are evaluated plants which were developed to reduce the deviation. For instance,
Starbucks will make use of updated technologies in order to conduct efficient and
aggressive marketing through digital media and the new digital tools coming in the
market.
TASK 3
P4 Explain different barriers for change and determine how they influence leadership decision-
making in a given organisational context.
Adopting to change is a complex task, building several difficulties that leads to barriers
and hurdles in implementing change plans and executing activities accordingly (Zubairu and et.
al., 2018). The barriers will create create gap in recommended and current practices that will
negatively affect the day to day operations and other business functions. Few barriers to change
are mentioned below in context of Starbucks showing their influence over leadership decision-
making.
 Lack of employee engagement in change process- Change plans and strategies are
developed by management and leadership by aligning tasks and their knowledge. These
plans are implemented and executes by employees for which their evolvement is needed.
The barrier to change takes place when staff of Starbucks are not involved in change
process. This demotivate people that creates deviation in performances of individuals that
has direct impacts over leadership styles. The leaders have to make sure to keep their
team members engaged and motivated for accepting change and working according to the
strategical direction developed.
 Rigidity to change- The workforce of Starbucks are going to be implementing change
plans but sometimes staff are too rigid to adopt change and are very comfortable in past
procedure. This barriers have to be reduced by leaders by keeping staff enthusiastic about

change. For instance, the leaders will be rewarding employees on the basis of their
performances which encourages them to work effectively in accordance to the plans
made and implement the change (Byers, 2017).
 Lack if effective communication- Change management only becomes effective when
the strategies and plans are effectively introduced to all the parties involved in the
organisation and working towards the changing scenarios. The management and leaders
of Starbucks holds the responsibilities to keep staff informed by making use of effective
communication channels and tools. Formal and informal tools of conducting a
conversation have to be considered while informing people and keeping employees
motivated in Starbucks to innovate and adopt change.
TASK 4
P5 Apply different leadership approaches to dealing with change in a range of organisational
contexts.
Leadership is a concept which focuses over the roles and responsibilities of leaders
working in an organisation for developing effective pathway for team members to attain
common goals and contribute to the ultimate objectives of the organisation. Leadership have
several approaches that are used for dealing with change in range of different organisational
change situations. These leadership approaches are discussed under in context of Starbucks.
 Directive leadership- The leader following directive leadership styles inform people
about what is expected out of them while the changed plans and strategies are applied in
organisational structure (LeMaster, 2017). The leaders of Starbucks make use of effective
communication practices while directing employees about the variations in operations
taking place. Moreover, leaders renders clarity of tasks and objectives in order to make
employees understand the need of bringing change and their respective benefits to
respective individuals.
 Supportive leadership- This form of leadership approach is when leaders make sure to
make work pleasant for team members while working according to the changed
scenarios. The leaders of Starbucks will be adopting friendly approach with employees
and make them enthusiastic about the change by making pleasant arrangements for the
workforce to perform.

 Participative leadership- This form of leadership is adopted by leaders when employees
or workforce engagement in change management procedures, policy development and
setting strategical directions is importance for numerous reasons. The leaders encourages
employees and staff members by adopting participative approach for implementing and
managing change. For instance, employees suggestions are taken for bring new products
or any modifications in the menu of Starbucks (Gaubatz and Ensminger, 2017). This is a
participative approach as the staff are the closest to customers and they have appropriate
knowledge about the needs of consumers specially of regular customers.
 Achievement leadership- This leadership style is bold and aggressive for dealing with
change. Here leaders have enough knowledge about the potentials and capabilities of
their team members according to which they set challenging goals for the respective
individual with a belief that the employee will be exceeding their boundaries to attain the
set objectives. This process of dealing with change is beneficial for both the employee
and for Starbucks. The individuals will be receiving chances to improvise and develop
better skill sets and the company will be efficient implementing change methods, models,
approaches and strategies on operational and functional level both.
CONCLUSION
From the information gained and evaluation conducted in the above report a considerate
conclusion drawn is that change is affected by organisation and it is significant for making sure
that the organisation have a sustainable future. There are several critical factors that exist in the
environment which impacts upon the operational and strategical functions of the business in
different manner. These factors are identified through internal and external analysis by making
an in-depth analysis of the elements like political environment, economy of the region, change
taking place in staff numbers and so on. Moving further the report also includes the evaluation of
different techniques and measures to manage change and implement it appropriately in the
organisational structure. PCAD model of change management is applied in order to do so.
Moving along barriers to change are determined as well along with their impact on decision
making of company which led to evaluating various leadership approaches for dealing with these
barriers and prominently influencing the individuals in organisation to adapt with change and
efficiently executing the plants made for doing so.

REFERENCES
Books and Journals