Understanding and Leading Change: Starbucks and Costa Analysis Report

This report provides a detailed analysis of change management within the context of two major coffeehouse chains, Starbucks and Costa. It explores various organizational operational strategies employed by these companies to adapt to market changes, including modifications to products, pricing, and advertising. The report examines both internal and external drivers of change, such as brand image, employee relations, government regulations, and technological advancements, and their impact on leadership decisions. It also evaluates methods to mitigate the negative effects of change, such as managing expenditures and addressing employee resistance. Furthermore, the report discusses leadership styles suitable for navigating organizational change and overcoming barriers that influence decision-making processes. The report highlights the importance of adapting to market dynamics, making strategic decisions, and fostering effective leadership to achieve organizational goals and maintain a competitive edge. The assignment also highlights the significance of a skilled leadership team in achieving organizational goals.

Understanding and Leading
change

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different organisational operational strategies after making changes in companies.............1
P2 Assess internal and external drivers of changes in leadership, individual and team............3
P3 Evaluate how to minimize negative impact of change on organisation.................................5
M1...............................................................................................................................................6
M2...............................................................................................................................................6
D1................................................................................................................................................7
TASK 2............................................................................................................................................7
P4 Barriers which effect the change and affect leadership decision making strategies..............7
M3...............................................................................................................................................7
D2................................................................................................................................................8
TASK 3............................................................................................................................................8
P5 Application of suitable leadership style in organisational context........................................8
M4...............................................................................................................................................9
D3................................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In today's world, it is essential for every organisation to keep on utilising updated tools
and techniques. This helps in giving hard competition to rivals and enhances goodwill as well as
brand image in front of society. Due to dynamic nature of the marketplace, companies need to
keep on analysing the trends and changes other firms are adapting (Aslan and Reigeluth, 2013).
For running business successfully and smoothly, enterprises should accept the changes that they
are facing in the market. In this assignment, two companies have been taken: Starbucks and
Costa. These two companies are dealing in same sector, most commonly they sell coffee to its
consumers. Also, this report includes the changes that these organisations face in the
marketplace. Lastly, it is also putting light on how leaders and their team help in decision
making. This supports in achieving desired targets and aims effectively and efficiently.
TASK 1
P1 Different organisational operational strategies after making changes in companies
In today's world, it is necessary for an organisation to keep on making changes according
to updates that are coming in the marketplace. Running business successfully and making profit
from it is the main aim of companies. These changes that firms face should take them in positive
ways. There are so many factors that can put impact on business by making changes in like
technologies which is updating from time to time, interest, taste and behaviour of consumer
etcetera. To keep on improving brand image and goodwill at marketplace, these firms like
Starbucks and Costa should adapt these changes that are coming. This aids their leaders to make
proper decisions after analysing and collecting data. Long term relations are said to be important
for enterprises with both clients and consumers as this helps them in making profit for a long
time. But to keep on satisfying them, change management is necessary. For an example:
Modification of products which are already in the market may help in enhancing sale. (Doppelt,
2017). There are two multinational organisations, Starbucks and Costa that are dealing in same
sector and that is beverages. They are providing services in most of the countries.
STARBUCKS
This is one of the most famous companies which are providing different coffee products
all over the world. Grodon Bowker, Jerry Baldwin and Zev Siegel found this organisation in
1971. This company has ample of stores all over the world and continuously expanding its
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business. It has many rivals which give hard competition like Costa etcetera. Starbucks yearly
revenue is US$22.387 billion on an approx. It also have staff members around 238,000. Apart
from this, it has multiple stores about 26,696 all around the globe.
COSTA
Costa is also one of the well-known company which is providing services to its
consumers regularly and effectively. They deal in coffee products and giving tough competition
to other organisations like Starbucks (Foltin and Keller, 2012). This company was also found in
the same year when Starbucks was introduced in the marketplace. Costa is a firm which is
continuously running its business successfully, expanding it all around the globe and has so
many stores in most of the continents. Costa coffee has almost 3500 approx stores in countries
and making profit around £1.167 billion every year. Away from this, they are also having ample
number of employees who are continuously providing quality services to consumers.
These companies for running their businesses use some policies and strategies. The
difference between these organisations in same products but differ from each other are
mentioned below:
Strategies Starbucks Costa
Competition related
strategies:

Starbucks needs to keep on
analysing the markets like
what kind of taste their
consumers are liking etcetera.
Here, they try to give hard
competition to rivals by
bringing different changes
which helps them in enhancing
skills. Like doing modification
in coffee products to increase
sale.
Costa don't use perceptions of
its consumers in regards to
make changes. Costa focuses
on forming alteration that their
management decides. Hence, it
reduces power of them in
giving competition to others
companies of same sector.
Strategies which are related to
pricing:
Starbucks is said to be a
famous brand name all over
the world which is providing
Here, Costa changes its prices
according to other companies
as they keep on modifying the
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services that are related to
coffee worldwide. As per
nature of the market if the
brand is high than price of
products may also gets rises.
This will enhance the
profitability but put impact on
end users pocket.
rates which helps in pulling
consumers towards them. This
strategy helps Costa to become
a competitor in the
marketplace (Fullan, 2014).
Advertising strategies: Starbucks used different sorts
of advertisements which were
both through paper and online.
At the starting point, these
promotional activities helped
this company in grabbing big
market in a short period of
time.
Costa keeps on changing its
products according to the
updates that are coming in the
market. Also, it is essential for
them to pull out these products
in front of the consumer. Here,
so many promotional based
activities can help this
company to enhance its sales
of commodities.
Process: At the initial level every
organisation fix their way of
executing operational activities
within the company (Hintz and
Bahia, 2013). But, Starbucks
made some changes after
looking at the behaviour of
consumers in the market. This
helps employer to make profit
and also gives satisfaction to
end users by fulfilling their
needs.
Costa also tries to find
different ways by which
company can make positive
changes in the environment.
These modifications help in
achieving goals that has been
set by the organisation. Also,
aids in making long term
relation with the end users.
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P2 Assess internal and external drivers of changes in leadership, individual and team
Leadership
Leadership can be understood by different process in which leader shows give direction
to its team in order to attain targets in an efficient manner. Leader is said to be the person in the
company who motivates subordinates and helps them in achieving goals (Thomas and et. al.,
2013). He/she is the one who leads staff members to hit the objectives that have been set by
Starbucks. There are some qualities which need to be there in a leader. they determine different
direction to staff members and they follow the same; this helps them in becoming more efficient
and giving their best while performing.
Internal drivers: Drivers which belong to the company can be stated as internal drivers.
 This kind of drivers includes goodwill, brand image and funds of the Starbucks and
Costa.
 It is essential for company to keep its image clear in the society and this helps in
improving goodwill. Employee relation is an important aspect in which = leaders should keep in mind at the
time of decision making.
External drivers: Factors which are affecting business from outside are known as external
drivers.
 Growth of the business depends on this factor. It can be stated as an important for
Starbucks.
 Helps in finding what rivals are using techniques and technologies and shows their
impact on the company like on profit or on sale. Some of the external factors are: Government of United Kingdom, updated technologies
and etcetera.
Leadership links with drivers of changes:
Leader is the one who shows the path to subordinates so that they can achieve their own
targets. There are some other qualities also which needs to be in a leader, like team leading,
decision making and etcetera. Here, another duty of the leader is to keep on analysing the
marketplaces that what kind of changes are coming in the market this helps them in making
decision which may create favourable conditions for Starbucks.
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A perfect team to achieve goals is necessary. Here, to form a team like this which can
easily attain targets, leaders should find the best members in the company which have the ability
to resolve the issues that firm is facing (Keppel and et. al., 2012).
Goals and objectives of a leader:
Some essential activities that a leader should do at the time of doing leadership are
mentioned below: Authority: Leader is said to be the person who represents Starbucks and other
organisations in front of the outside world. Supervisor have so many responsibilities
which are related to enhance business in the marketplace. Control: After making a plan it is essential for leaders to monitor if the plan is going on
the right way or not (Latham, 2013). If not, then it is his responsibility to make changes
accordingly. Influencing ability: Leaders of both the organisation Starbucks do not let their
subordinates to get demotivated. Sometimes at workplace situations comes up when
leaders have to handle it and motivate others. This may help in keeping staff members
full of interest at working area.
 Proper directing ability: One of the main quality a leader should have. Situations comes
across where person have to find out the scenarios, make decisions and direct others.
P3 Evaluate how to minimize negative impact of change on organisation
Changes are necessary for a Starbucks and Costa. But, sometimes these changes bring
situations which is not beneficial for them. These modifications may involve so many risks.
Which may arise so many expenses of firms. Starbucks have some analysts which keep on
looking at the market and with in the corporation as well that what situations can become risky
for the company. These members are responsible for keeping decisions which are favourable for
the enterprise. Some points are there which may effect organisational structures or put negative
impact and these are mentioned below:
Expenditures:
For every level of organisation it is necessary to have investors who can invest at the time
of attaining or planning of the objectives. Companies like Starbucks can easily raise funds from
investors. This helps them in putting that money in plans that they have made. But for industries
which are small it is not easy for them to make changes that needs some funds. These kind of
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organisations have the investors but they do not easily believe on them. For an example: If
expenses of firm is more as compared to its profit, it may effect negatively on goodwill of the
enterprise. For this, leaders have to implement as well as formulate proper plans. In which
strategies to enhance profitability by covering expenditures in a systematic way. Along with this,
for large organisations it is important for them to make a proper plan of what exactly and where
exactly they are going to implement. Because, sometimes situations comes across where funds
gets expanded as compared to set target (Lawrence, 2015).
Example : Starbucks and Costa uses recycled paper bag in packaging the goods. This
helps them in reducing cots of expenses.
Employee resistivity:
Better decisions of changes in the company are required which may help in running
business successfully. These modifications may bring so many alterations in the structures of the
organisation (Mukherjee and et. al., 2012). Data structures and manufacturing process under this
employees aid in making decisions which are favourable.
Example : Favourable policies which have been formed by executives of both Starbucks
and Costa helped its employees in showing loyalty towards organisation.
Lack of Support and failure:
It is essential to keep all the employees of every level to a same position. This reduces
conflicts in between them. Transparency is said to be an important part that plays an important
role in Starbucks. Leaders and managers have the responsibility here to cope up with every
aspect which is related to the company. Also, training and development part can be organised by
supervisors this may help in enhancing their skills and knowledge.
Example : Both of organisations, Starbucks and Costa gives equal opportunities to its
employees and do not make any discriminations. This aid them in removing conflicts situations
with in workplace.
Morale:
Leaders and managers duty is to motivate the staff members. If anyone in the company is
feeling low or working without interest this may reduce productivity of him/her and of
organisation as well. Elements like, skills, confidence and talents may help in achieving goals
and objectives in an efficient manner. Firms to resist in the marketplace keeps on making
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changes in operational activities this keep the interest of employees. Then these staff members
gets training from the employer which helps in giving proper facilities to consumers.
Example : Management of both Starbucks and Costa takes suggestions from every single
employee. This helps them in making proper decisions and also boost up their morale.
M1
Mainly, there are two drivers which can be stated as essential for Starbucks, external and
internal than others. Here, government, behaviour of employees and culture of every country can
put impact on profitability and productivity of the company. To keep on maintaining brand
image in marketplace changes are necessary.
M2
Change management is important for organisations Starbucks. Occurrence of changes
takes place from time to time in the marketplace (NHS England, 2016). Companies can make
profit at its maximum by adapting these changes that are taking place. It can be anything
updation in technologies and etcetera.
D1
After making plans of changes that Starbucks wants. It is necessary for organisational
management to keep on monitoring it the plan is going in a proper way or not. These changes
can help in many ways. Enhances profit and sales, improvement in brand image and etcetera.
TASK 2
P4 Barriers which effect the change and affect leadership decision making strategies
Change management is not always stay positive at the time of decision making. Leaders
and manager are the one who take decisions which are favourable for Starbucks. But, it is not
essential that those determinations that have been done by them put a positive impact only.
Situations comes across where they faces so many problems after making and implementing the
decision. Starbucks and costa makes plans and execute them on daily basis or for long term as
well (Salmela, Eriksson and Fagerström, 2012). These changes the management is trying to bring
in the firm can be both positive or negative. If the decision that has been made came out as
positive then it may help in enhancing both productivity and the profitability. But, if the decision
went wrong then it may lead to loss of the company. For an example: If the coordination is not
their in between employees because they came from different cultures. This may decreases
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production level and other things a well. These barriers that has been discussed may put negative
impact on the goodwill and brand image of Starbucks.
It has been found that there are two type of changes which Starbucks and most of the
enterprises follows. These are imposed and initiated changes. Both of these differs from each
other. Imposed change is the one where leaders takes the decision without involving labour.
Initiated changes are the one in which supervisor like leaders and managers first communicate
with staff members and then make decisions. Usually, initiative changing management are
mostly make favourable conditions for the corporation. There are many models which may help
Starbucks to find various barriers that may arise at the time of decision making. It is leaders duty
to find the ways by which company may reduce these barriers and adapt changes that are coming
in the world. This aid in doing business easily at the marketplace. For an example :
Modifications in policies that government makes from time to time directly put impact on profit
of both Starbucks and Costa Coffee.
M3
At the time of decision making leaders and managers faces so many barriers. This can be
anything related operational activities which needs to be changed. These changes are mostly
made for betterment of the firm. It can be of any term if the organisation wants to increase its
sale or to achieve goals in a set period of time. These barriers may arise from different situations
like Government policies, low amount of funds and etcetera.
D2
It is important for Starbucks to keep on enhancing both productivity and profitability.
This can be done by implementing changes and then make familiar with those alteration to
employees. Here, training and development programmes may help leaders to train their staff
members. These sessions aid in increasing skills and knowledge of workers.
TASK 3
P5 Application of suitable leadership style in organisational context
Starbucks and Costa have leaders and these supervisors have different sorts of thinking.
They uses various types of theories which may help them in decision making or creating
favourable conditions for the company (Different type of leadership styles, 2017). Here,
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Management of Starbucks and costa also uses many theories or strategies which may help in
achieving set targets. There are some styles of leadership which has been mentioned below: Democratic: This give opportunity to employees where they have right to speak. They
give suggestions to leaders or have words with them. These leaders listens to staff
members analyses according to the situations and takes decision as per the given
thoughts. Autocratic: An approach where leaders or supervisor are the one who takes decisions
which needs to be followed by every one in Starbucks. They don't take suggestions from
employees. Laissez Faire: This type of approach can be understood as leaders gives responsibility to
an individual. Then it is his/her duty to keep on motivating that person so that he/she can
contribute in achieving goals. Here, leader shows ways to that individual by which
productivity can get increases. Transformational: This type of leadership varies in different situations. Teams can get
changed in between the tasks to achieve them in a more appropriate manner. These
dynamic nature and authorities helps in attaining targets easily. Here, leaders should keep
on making relations strong with every single employee in Starbucks.
 Transactional: This approach mainly focuses on enhancing employee relations. Leaders
and managers contribute fully in the context (Yoder-Wise, 2014). Different policies
which are in favour of staff members may motive them. These regulations can also may
bring loyalty up in the labour towards Starbucks.
Example for both of organisations in this context are :
1. Starbucks executives takes suggestions from talented staff members this aid in making
effective decisions so that they can give better experience to its employees.
2. Costa Coffee is improving working experience of employees at workplace by taking
feedbacks from staff members.
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(Sources: Leadership Styles, 2017)
M4
There are different sorts of leadership styles like Autocratic, Democratic, Laissez Fair,
transactional and transnational. These approaches helps leaders in making favourable conditions
with in the organisation. Also, it may help in enhancing goodwill and profitability of Starbucks.
Mostly these concepts are to resolve issues or to make decisions for the firm.
D3
Change management bring so many modification in Starbucks. Here, leadership style
also put impact at the time of decision making. There are some approaches of leadership which
may help in achieving goals that has been set by the company in timely manner. Starbucks
adapts many type of change management which help them in keep on running business at the
marketplace.
CONCLUSION
From the above mentioned assignment, it can be concluded that changes are necessary for
every organisation to keep on running business successfully. Modification from time to time is
vastly taking part in every sector. Here, companies needs to determine the changes that they are
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Illustration 1: Leadership Styles