Leadership and Change: Starbucks and Costa Coffee Analysis Report

This report examines the dynamics of change within organizations, focusing on Starbucks and Costa Coffee. It explores how these companies have adapted to various change drivers, including technological advancements, shifts in customer preferences, and competitive pressures. The report analyzes the influence of these drivers on leadership styles, employee behavior, and strategic decision-making. It delves into the measures organizations can take to mitigate the adverse effects of change, such as the continuous improvement model and the PDCA cycle. Furthermore, the report discusses the barriers to change, like declining team morale and high employee turnover and their impact on leadership decision-making, utilizing the force field analysis framework. Finally, it assesses the implementation of leadership approaches to effectively manage and lead change within the context of these two prominent coffeehouse chains, providing insights into the practical application of change management principles.

Understanding and
Leading Change

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Comparison of different organisations which are influenced by change...............................1
P2 Influence of change drivers on leadership and behaviour.....................................................3
P3 Measures taken by firm to minimize adverse impact of change............................................4
TASK 2............................................................................................................................................5
P4 Barriers of change and their influence on leadership decision making.................................5
TASK3 ............................................................................................................................................7
P5 Implementation of leadership approaches to deal with change.............................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Growth and success of organisation rely on its capacity or ability to adopt change.
Environment of business is dynamic and changes occurs very frequently so, it is important for
every enterprise to adapt with alterations on regular basis in order to sustain in market for long
period of time (Aslan and Reigeluth, 2013). This helps the firm in attaining its objectives and
targets in effective and successful manner. There are various factors that exist in business
surroundings which highly influence working and operations of company. This force the
manager to adopt changes in order to lower down its impact. In the present assignment, chosen
organisations are Starbucks and Costa which offers coffee products. The report includes impact
of change on various strategies and operations of business as well as influence of change drivers
on leadership, behaviour of individuals & teams. Apart from this, it also defines different
measures that can be taken by an organisation in order to minimize the negative influence of
change. Besides this, various barriers and their impact on decision making of leaders as well as
application of leadership approaches to deal with change are defined in this project.
TASK 1
P1 Comparison of different organisations which are influenced by change
Change refers to an activity which is adopted by firm in order to become competitive and
attain sustainability in the market. It highly influence the functioning of business either in direct
way or in indirect. Changes occurs in the form of technology, taste and preferences of customers,
market trends, leadership, culture etc. These changes alters the processes and structure of firm.
Mangers need to understand these changes and implement them effectively so the business
objectives can be attain (Clarke and Persaud, 2011). The two companies, Costa Coffee and
Starbucks have execute change in their business process in order to attain and retain loyalty of
customers.
STARBUCKS: It is a coffee house chain of America and operates worldwide with
around 23,700 stores. They differentiate themselves from competitors providing better
experience, good taste and high quality products to customers. The company was established in
1971 and ruling coffee market. They offer baked goods, smoothies, coffee beverages and tea.
COSTA COFFEE: The company is headquartered in Dunstable, England and is a
multinational coffee house. It is the wholly owned subsidiary of White bread. After Starbucks, it
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is the second largest coffee shop of United Kingdom. Around 3,400 stores of firm are located in
various parts of country. They offer sandwiches, ice drink, tea and coffee to its customers.
Some changes and their impact on strategies and operations of the organisation are
defined below:
Change in Starbucks:
Recently, the CEO of organisation declared that he is resigning from his position. Major
outcome of this is formulation of new strategies by manager as the working and thinking style of
new chief executive officer is different from the existing one (Doppelt, 2017). Technological
changes are also considered as an another crucial step by management.
Past and existing strategy:
In present competitive market, Starbucks is not paying more attention towards premium
group of customers as their strategy majorly emphasize on targeting consumers of every income
group. But now, they change their strategy and their focus area is premium segment. They also
emphasize on expansion of business in different parts of world. They open their stores in
developing countries such as India as they know the potential of unorganized market. There is no
doubt in this thing that, it is a positive tactic and provide benefit to Starbucks as they very well
know the potential of an unorganized market. Penetration pricing strategy is not being used by
the company due to its unsuitability on premium segment.
In context of technological related change, Starbucks believe in using high technology
machines for producing coffee. It is an important part of firm's operations. Recently, the
company start to emphasize on updating digital platform (Fullan, 2014). They adopt various new
techniques of producing coffee as well as other products. Earlier, adoption of latest technology is
not considered as a part of firm's long term plan of action. But now, due to rapid alterations in
technology, they use digital platform in order to promote their products as well as brand name.
Change in Costa Coffee:
Recently, due to exiting of European Union in United Kingdom, huge political changes
are made which influence strategies and growth of Costa Coffee. Increase in national living wage
is the other change that forced the organisation to make modifications in their operations.
Old and new strategies:
Costa Coffee is a far-famed organisation and known for its rapid expansion. But, due to
Brexit, their business is highly influenced and force them to alter their strategy as they know that
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they have to follow various laws and regulations in upcoming time. They face legal troubles due
to Brexit during opening new outlets in European countries. The company formulate various
strategies which emphasize on expansion at global level so that they can cope up with these
changes. They promote their unique products in market such as good quality coffee beans.
Increase in minimum wages put negative influence on the profits of company (Fyke and
Buzzanell, 2013). Thus, the enterprise adopt new strategy, that is, they raise prices of their
products in order to effectively manage or deal with these changes in an appropriate way. They
also emphasize on making optimum use of resources and reduce waste in operational process.
P2 Influence of change drivers on leadership and behaviour
Organisational behaviour and leadership are highly impacted by change drivers. It
influence the leadership and decision making of leaders. The affect of these changes might be
negative or positive and both influence the working of business. Five major change drivers that
impact leadership as well as behaviour of individuals and teams are defined as follows:
Customer led drivers: Growth and sustainability of the firm highly rely on its potential
customers (Yoder-Wise, 2014). They play vital part in increasing the profitability of company.
Thus, if any change takes place in the in the tastes and preferences of customers, it will directly
impacts sales and profits of organisation. So, managers of Starbucks and Costa Coffee needs to
consider this change driver in order to identify preferences and tastes of customers and design
appropriate strategies according to that.
Technology led drivers: Technology is an important element that influence the
competitiveness of business. Any change in technology influence working of business and
decisions of leaders. Use of improved technology administer benefits to Starbucks and Costa
Coffee. It helps them in providing high quality products and services to potential customers. This
factor should be considered by administrators so that better outcomes can be ensured.
Competitors led drivers: Competitors directly impacts on revenues of company. In
market, many competitors of Starbucks and Costa Coffee are exist that affects their sales.
Strategies of competitors also influence the operations of business so it is required by the
managers to consider competitor led change drivers before formulating any strategies.
Capital led drivers: Investors of business influence performance of firm. Performance of
company gets improved as number of investors increase (Gupta, 2011). Capital is essential for
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running operations of business smoothly. So, administrators needs to consider this so that
standard of performance can be improved.
Government led drivers: Laws and regulations of government influence business
activities. It is necessary for the enterprise to adhere all the legislations and policies made by
higher authority and formulate strategies according to that in order to effectively cope up with
changes (van der Voet, Kuipers and Groeneveld, 2015).
Some other change drivers are:
Resources: These are important for proper working of firm. It is vital for Starbucks and
Costa Coffee to have enough resources so that activities and operations can be run smoothly.
Optimum utilization of available resources ensures reduced cost of operations.
Capabilities: Skilled manpower assists the firm in bringing innovation in products. This
improves the profitability and performance of company. Ability to create opportunities promotes
innovation.
Political: Policies, political instability, tax rates etc. are the major factors that affect the
operations of firm. This factor needs to be considered in order to provides more rights to both
employer and employee.
Economical: Deflation, inflation, unemployment, economic condition etc. are all included
in economic factors. These influence the decisions and behaviour of leaders.
Above mentioned are all the factors that needs to be considered by managers in order
cope up with changes in effective manner (Hrebiniak, 2013). This provides better understanding
to managers and assists in promoting improved working.
P3 Measures taken by firm to minimize adverse impact of change
Sometimes, it becomes difficult for the organisation to adopt and manage change. These
are harmful and in order to manage these and minimize its impact, organisations take various
measures. Implementation of various approaches and models assists the managers in identifying
the impact of change and taking actions to reduce its impact. Some theories and model are as
follows:
Continuous improvement model: Implementation of this model assists the managers of
Starbucks and Costa Coffee in making constant improvement in its processes and operations.
This model facilitates in lowering down the adverse impact of change and accomplishment of
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targets and objectives of the company. This model includes a cycle that is necessary to follow in
order to implement this model successfully.
PDCA Cycle: This cycle assists in increasing the performance and revenues of firm. It
involves four essential steps that is necessary for the business enterprise to be followed:
Plan: For ensuring successful introduction of change, opportunities are identified and
plans are formulated by managers.
Do: Administrators implement change at this phase. First, they execute it at small level so
that effectiveness of change can be assessed.
Check: Actual outcomes are checked and measured by standard one and results are
analysed by managers that assists in determining change impact.
Act: Changes are applied at large level it its impact is positive and if its influence is
adverse then, other theory and method are applied by managers (Keppel and et. al., 2012).
Bohner and Arnold change effect analysis theory:
Application of this theory facilitates the manager in minimizing adverse affect of change
on organisational behaviour and leadership. Outcomes are determined and effective measures are
taken by administration in order to obtain desired results. Execution of this theory enables the
manager to measure the performance of organisation with standard. This supports the
administrator in designing suitable plans and policies. The theory provides direction to
employees that enables them to effectively adapt changes and minimize its negative influence.
Risks, that arise because of implementing change can be easily identified by administration by
application of this theory (Malenfant, 2011).
TASK 2
P4 Barriers of change and their influence on leadership decision making
Force field analysis: This framework assists in identifying factors that are responsible for
change. The focal area of this approach is to set an equilibrium among the forces that drives and
resists change. This assists the managers in making strategic decisions. It includes five phases:
Phase 1: Proposal for change
In this step, reasons are identified for change and goals and objectives are set. For
example, Starbucks wants to reduce waiting time of consumers and update menu card according
to the requirements of customers. For this, company needs to introduce change.
Phase 2: Determine change forces
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Forces might be internal or external. Internal forces are exists within the organisation
while external exists outside the business. Managers determine those forces that are the reason
for bringing change.
Internal forces:
 Higher lead generation
 Declining team morale
 Minimize waiting time of customers.
External forces:
 Avail benefits of technology.
 Increase customer loyalty. Gain high competitive advantage in market.
Phase 3: Identify force against change
In this phase, Starbucks determine those drivers that resists the firm to implement change.
It can also be determined in the form of external and internal drivers.
Internal forces:
 Whether employees accepted change or not.
 Clashing of workforce thoughts.
 Organisation structure.
External forces:
 Political and economic instability.
 Government legislations. Obligation towards consumers.
Phase 4: Assign sources
Process of rating is included in this phase in which factors are rate on 1 to 5 scale as per
the weaknesses and strengths (Mukherjee and et. al., 2012). This facilitates the organisation in
recognizing the element that highly influence the performance when change is executed.
Phase 5: Analyse and apply
In this, managers assessed various forces that impacts the working of business. This
analysis is used by the companies in two ways.
1. To decide whether it is beneficial to move ahead with change or not.
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2. To assess which favourable component strengthen practices of business and which force
promote weaknesses.
Barriers to change and their impact on decisions of leaders:
Government: Various policies and regulations formulated by government influence the
functions of business concern in indirect way. Import and export related laws affects coffee
products supply. These policies act as barrier and influences the decisions of leaders.
Organisation complexity: Complex structure of organisation makes it difficult for the
employees to adopt change effectively. This is a big barrier for organisation and it involves
products, process and system. Due to complexities, personnel are unable to understand change
and adapt with them. This impacts on decisions of managers as this is a big challenge in front of
them.
Lack of effective communication: Lack of effective communication channels acts as a
huge barrier for organisation in adopting change as informations and messages cannot be
communicated to employees in proper manner and this leads to miscommunication. It increases
the probability of making wrong decisions (Parsons and Cornett, 2011).
TASK3
P5 Implementation of leadership approaches to deal with change
As per the nature of business, there are number of theories of leadership which are being
applied. There are number of tools and techniques which are being implemented by Starbucks
with effective styles of leadership as it is basically a coffee shop sector which can directly lead to
effective management along with attaining aims and objectives of company in better and
effective manner. There are some leadership styles which are being offered within an
organisation which mainly depends on required tasks which needs to be attained. Those
leadership styles are being described below:
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(Illustration 1: Leadership Styles)
(Source: leadership Styles, 2017)
 Laissez Faire: In this kind of element, supervision is the area where the leader mainly
lacks regarding the team members and generally fails to provide effective feedback under
the supervision. Mainly the highly trained people and experienced ones utilise this kind
of techniques. This can majorly provides help within the leadership. There are some
drawbacks of this kind of factor like it can hamper the productivity of firm along with the
features of the firm. Poor production is being obtained if there is lack in the supervision
efforts of the managers.
 Autocratic: This sort of administration style enables director and pioneers to settle on
powerful basic leadership process and that too alone without contribution of others. Add
up to specialist is being controlled by the administrators and consequently force their will
on staff individuals (Suchman, Sluyter and Williamson, 2011). Normally choices of
despotic pioneers are not being tested. For instance Nation like North Korea works under
imperious initiative. Fundamental advantages are being acquired by representatives.
 Participative: This type of leadership is also called democratic leadership style which
mainly participates within the administration and thus provide the contribution of
colleagues and companions, however obligations of settling up on better choice with the
participative pioneer. Morale level of staff members are being boosted by this kind of
leadership in order to make effective contribution within the decision making process.
When the modifications are needed for the company, mainly all the staff members are
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take effective participation for making the modifications in ease manner. There are some
challenges which are observed for making better decisions within short period of time.
 Transactional: People who mainly utilise this kind of transactional leadership like the
manager of company who has various roles and responsibilities to perform and thus
mainly provide rewards and punishments for the team members according to the report of
performance. There are various goals which are being already determined and set up by
the manager along with his team and after the agreement which is mutually done
guidelines are being set up. There are some power to review up the results and train the
proper staff members which are not being attained.
 Transformational: This kind of leadership is mainly dependent on the high level of
communication from the managers in order to meet up the goals. Motivation is being
provided to the employees by the leaders along with making them focus on productivity
and efficiency of communication channel (Thomas and et. al., 2013). They main focus of
the leaders is on the large picture within the company and there are some certain small
tasks which are being delegated for attaining the tasks and objectives of firm in effective
and better manner.
CONCLUSION
As per the above mentioned report, it has been concluded that surroundings of business
are dynamic in nature and it is necessary for every business concern to adopt the changes that
takes place in the environment. It ensures growth and success of the business as well as
administer competitive edge to firm over their competitors. It is essential for the managers to
understand change and implement those so that, objectives and targets can be successfully
attained. Internal and external change drivers impacts organisational leadership & behaviour and
it is required by the managers to minimize its negative influence by taking various measures.
There are different barriers that restricts the firm adopt change and affect the decisions of leaders
so, it is necessary for leader to apply leadership approaches in order to deal with change in
effective manner.
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REFERENCES
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strategy to implement best practices in the acute care setting. Journal of patient safety.
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business, government and civil society. Routledge.
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Wiley & Sons.
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leading change and changing leaders. Human Relations. 66(12). pp.1619-1643.
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pp.36-40.
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Transforming organizations using complexity, positive psychology and relationship-
centered care. Radcliffe Publishing.
Thomas, T., and et. al., 2013. Leading change and innovation in teacher preparation: A blueprint
for developing TPACK ready teacher candidates. TechTrends. 57(5). pp.55-63.
van der Voet, J., Kuipers, B. and Groeneveld, S., 2015. Held back and pushed forward: leading
change in a complex public sector environment. Journal of Organizational Change
Management. 28(2). pp.290-300.
Yoder-Wise, P.S., 2014. Leading and Managing in Nursing-E-Book. Elsevier Health Sciences.
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