Leadership and Strategic Analysis: A Starbucks Case Study

This case study provides a comprehensive analysis of Starbucks' business operations, encompassing various aspects such as PESTEL and SWOT analyses to understand the external and internal environments. It evaluates the impact of Corporate Social Responsibility (CSR) on the business, focusing on the company's community, environment, and ethical sourcing pillars. The study also compares and contrasts different leadership styles within Starbucks, examining their effectiveness and impact on employee engagement and decision-making. Furthermore, it explores the importance of organizational culture in shaping Starbucks' processes and overall success. The report concludes with a reflection report summarizing the findings and recommendations for the company's future strategies.

Starbucks case study

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
PESTEL and SWOT analysis of Starbucks................................................................................3
Evaluation of CSR on the business.............................................................................................6
Compare and contrast between different leadership style...........................................................7
Importance of organisation culture on the process of Starbucks................................................8
Reflection report........................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Starbucks is one of the well-known American multinational coffee house chain and
roaster reserve that manage and operate their business at a global level. Coffee culture of
Starbucks is too wide as company operate it's outlets and retail store from than 30,000 locations.
Hot and cold coffee are the major and most demanded products which is served by organisation
at worldwide level. Starbucks was established in the year 1971 and in present scenario
management manage all its operations from the headquarter which is established in Seattle,
Washington (Azriuddin and et. al., 2020). There are several section are focused in this report
which will include micro and macro understanding of business organisation and the influence of
CSR on organisation. Recommendation for suitable leadership style and comparison between
different leadership style will also included in this report. In the last, importance of organisation
culture and their role within Starbucks process is also included focused in the upcoming report.
TASK
PESTEL and SWOT analysis of Starbucks
PESTEL is defined as a strategic analysis tool and it used by the organisation for
analysing the impact of external issue on business environment. The reason to select PESTLE
model for this report is to understand external or macro aspects of business. There are six
different factors exists in strategic tool and it is utilised by Starbucks to understand and analyse
the existing environment. Further, existing market conditions of environment are too dynamic so
Starbucks adopt or implement PESTLE model to gain knowledge about consumer demand and
purchasing power. This results management formulate strategy which helps to overcome from
changes in an organised manner. Some aspects of external business environment for Starbucks is
mention as follow:

Illustration 1: Source(https://www.business-to-you.com/scanning-the-environment-pestel-
analysis/)
 Political factor- The major political factor for Starbucks relates with the source of raw-
material. One of the main aspect of political aspect is to follow all laws and regulations
related with country as Starbucks buy their resource or beans. With the increase in
activeness of individuals among political parties it is essential for organisation to work
according to the multinational laws of US (Basak and et. al., 2020). This refers now
individuals not prefer brand but they also monitor the impact of company operations on
environment as it helps to analysis fair trade practices among business. The present
market conditions including Brexit and Covid-19 relates with political environment as
government steps helps to overcome from current situations.
 Economical factor- With the ongoing global economic challenges monetary value is
the prime external factor that impacts on Starbucks. This is also identified that economic
aspects directly reduce profits for business. It also convinced buyers for shift towards
the cheaper alternatives if Starbucks charge high price from customers. So it is essential
for Starbucks to identify opportunity for managing profits of business. With the analysis
of current market condition it is identified that Starbucks face challenges because it is

related with exchange rate of business. Moreover, due to pandemic conditions and
Brexit factor it is complex for individual to work in an appropriate manner.
 Socio-culture factor- This is already state by organisation that Starbucks offer cheaper
products and as per this perspective authorities that if they offer coffee at low rates than
management must go for low quality products. It also defines that socio-cultural
challenge identified and expand customer base by managing buyers from all aspects
related with lower and middle class tiers (BURKE, ROBINSON and Choi, 2020).
Example- Change in the consumer preference and work patterns impacts on operations
of Starbucks because now individual are more concern about safety aspects.
 Technological factor- The position of Starbucks among the market is too high and this
relates with emerging mobile wave. Apple and Starbucks together generates an
application which offer discount and to order food items with online application and it is
beneficial for ride mobile wave in an appropriate manner. Internet services are
introduced by Starbucks to perform all work according to the current environment
conditions. Technology is also used by management to deliver order at customer place.
Moreover, by implement of more value among company brand overall consumer
experience is also improved such as mobile payments or digital currency is a positive
factor of technology for Starbucks.
 Environmental factor- Starbucks practices different activists and international
advocacy among the groups. Along with the third pillar of Starbucks relate with
environment sustainability. In the present scenario, consumers expressed different issue
that refers organisation undertake different account as it helps in holding trust for
customers. Rules and regulations is an important aspect for the environment and it is
also used for managing business as per area that coffee beans helps in managing
business with more efficiency (Dalton and Thatcher, 2019).
 Legal factor- Management of Starbucks ensure that laws, regulations and legislations
are not violated while performing organisational work. This refers management is
focused to manage task with home market and also for those countries from
organisation from where Starbucks purchase of raw-materials. It is used to manage laws
which helps for purchase of caffeine products and management ensure that resources are
purchased as per decided policy.. Example- Caffeine products are unsafe for health. So

trade consumer base helps in managing business on partial basis which is useful for
completing task according to customer loyalty.
SWOT analysis of Starbucks
SWOT analysis of Starbucks reveal that it is one of the largest coffee chain among the
world (Dong and Wu, 2015). With analysis of internal environment of an organisation
management implement and adopt changes that is required to deal with current environment. It is
used to complete task as per competitive advantage that reveals to grow with continue aspect for
accomplish of success among all over the world.
Strength
 Strong brand image- Starbucks corporation is recognised as one of the most popular and
the strongest brand among food and beverage industry. So brand image of Starbucks
leads in increase of size, volume and number of customer base. This increase in number
of loyal customer base.
 Strong financial performance- Annual revenue of Starbucks is increasing with rapid
face and it also increased profits for business. So strong financial position is another
strength for Starbucks which is increasing profits for business among all over the market.
Moreover, high profits and strong financial performance helps in improving market for
company.
Weakness
 European tax avoidance- Starbucks avoid the tax related policy within market of UK
and it also faced various controversies as well as criticism. With the identification of case
Starbucks management was found guilty. So from customers’ point of view it work as a
weak point for organisation.
 Recall of products- Over past years it is identified that Starbucks recalled a lot of
products that are in demand (Farida and Ardyan, 2015). It negatively impact on brand
image of organisation. The reason to recall products relates with contamination and
allergens. So customer face challenge for buying products.
Opportunities
 Expansion of developing market- Starbucks manage their coffee house among the US
and also with the global expansion among few areas like India, China and Africa offer
opportunity to improve company profits.

 To launch new products- Starbucks is popular for their coffee and also for their
effective services. Moreover, global expansion of Starbucks offers a large customers
base so with launch of new products such as Peppermint Mocha, Eggnog, Latte and
many more leads management to improve company products.
Threats
 Competition with low-cost coffee- Different coffee houses are offering products to the
customers at a minimum rate (Gürhan-Canli, Sarial-Abi and Hayran, 2018). It also threats
organisation for future's stability that is managing company according to higher price.
 Controversy for California rule- Judge from the California ruled Starbucks and many
different organisations in the month of March 2018. It is also related with warning labels
that are related with coffee products because chemical is used by Starbucks that enhance
probability of cancer.
Evaluation of CSR on the business
With the analysis of existing market conditions, it is identified that each organisation
which is performing their work at global level need to ensure about changes that pass in market.
Thus, by monitoring changes in market it is easy for Starbucks to deal with current market
situations in order to perform work in an appropriate manner. This defines management think
about all programmes and their system such as to provide discount, offer on products etc. in
order to attract more number of products and it is managed with the help of SWOT tool. Apart
form this, PESTLE model aids to analyse present market conditions and this helps to understand
that customers are not only focused on the products but also on aspect of social responsibility.
Like, the way in which Starbucks respond towards society problems. They also identify
challenge and areas which is useful for managing business and Starbucks aspects towards
environment conditions. It refers organisation is managing business with motive of
accomplishing PR programmes. CSR strategy offers and manages a key point for the Starbucks
which improves the market area and customer base through formulating a competitive-edge for
market. Example- Starbucks write the name of it's customers on their coffee cups it helps to
improve individual relation with company aspects which generate brand loyalty and repeat
footsteps of customers (Koapaha and Tumiwa, 2016).
From the perspective of Starbuck's CSR initiatives and social responsibility there are
three different pillars which includes Community, Environment and Ethical sourcing that helps

in managing positive impact for organisation. The positive impact relates with Starbucks and it is
used to manage work by engagement of communicate stores. This also refers with local non-
profits Non-profit stores work with services that refers management meet with the needs of
stores that helps to locate about company profits. Starbucks donates $0.05 to $0.15 to manage the
transaction as per non-profit partner with engage of first pillar that is community store. It also
refers management hire community store and in this case more than 10,000 veterans and military
among the organisation implement about community perspective. It is also used to make stronger
foundation because it increases strength of business through which Starbucks manage their
foundation system.
Second pillar of ethical sourcing dictate and explain the methods or way by which
Starbucks purchase their products. Organisation is committed to ensure that all of its coffee
beans, cocoa, tea and manufactured goods are managed by organisation in an ethical and
responsible manner (Mileva and Fauzi DH, 2018). Moreover, it also state that success of
Starbucks is depend on the farmers because they grow and produce products which is used to
manufacture products according to the decided benchmark. In the last, third pillar ethical
sourcing of Starbucks define about most important business partner which demonstrate a
comprehensive method for managing environment safety. In order to ensure environment safety
LEED certified store is committed towards recycling, conserving energy and water. This leads to
formulate strategy which helps in addressing climate changes at global level. Further, Starbucks
also try to perform work with environment friendly approach because it helps in managing all
operations in an appropriate manner.
Compare and contrast between different leadership style
There are different leadership style exists that are utilised by leaders or managers of
Starbucks. It is used to draw an effective team through which management generate better and
positive outcomes from the company operations. Some effective leadership style which is
effective and beneficial for company are mention as follow:
Participative leadership style
This style is rooted among organisation as per democratic theory and the main essence is
to engage all employees of organisation for managing and implementing decision-making
process. Team members engage, include and motivate individuals for contribute about different
aspects which leads leaders to motivate employees to complete their work according to decision-

making process (Ramaswamy and Ozcan, 2016). Brexit decisions impacts on all organisation by
reducing prices and economy of business. So to overcome from challenges organisation manage
and engage participative leadership style which is used to work as per engagement of all
individuals. It helps to take effective decisions for completing work with employee's creativity.
Delegative leadership style
According to the delegative leadership style organisation focus on delegating better
initiative to the team members. This is one of the most successful strategy if team members of an
organisation are competent, responsible and prefer to engage individual work. On the other side,
disagreement divide and split the group, leads to demotivation of employee's and morale also.
Experienced employee's take advantage about competence and experience which is leading
Starbucks to manage work for completing task as per creative aspects (Saraswati, 2014).
Comparison between participative and delegative leadership
Parameters Participative leadership Delegative leadership
Employee engagement With the engagement of more
employee's an explanation about
participative leadership style is
engaged.
The delegative leadership style
of engage only professional
and expert employee's.
Creativity Employee's creativity is increased
because they are motivated to
engage own skill in company
operations.
Skills and experience is utilised
by persons for formulate and
adopt of creative skills among
company function and
operations.
Decision- making All employees are engaged to
perform effective decisions for
organisation.
Only experienced workforce is
allow for implement of
company decisions.
With the analyse of current situations and market conditions it is analysed by
management of Starbucks that decision-making plays an important role for current market.
Moreover, Covid-19 and Brexit conditions impacts on respective organisation as it is related with
business perspective due to which some changes such as workforce number of Starbucks is

reduced. Therefore, participative leadership style is appropriate because it helps to complete
work with minimum number of employee's. This also refers management is focused towards
managing and implementing an important role for understanding company internal and external
aspects. Participative leadership style is an important aspect because it helps to engage effective
and skilled individuals who are constantly encouraged in Starbucks operations (Shirdastian,
Laroche and Richard, 2019).
Importance of organisation culture on the process of Starbucks
Starbucks corporation's culture is an important and distinct characteristic for
management. It influences wide assessment of employees and performance organisation by
implementing value, tradition and custom which is related with behavioural expectation among
all working staff. In the context of Starbucks case, its organisational culture permits about
business which is used to include operations related with franchisees and licensee. This
determines methods and the aspects through which workforce interact with customers and it is an
important aspect to understand communication system as per company culture. This also define
the ways and aspects through which important culture is included within company. Moreover,
functional structure is followed by Starbucks that helps in managing positive ambience and
environment which also represent the company culture and dimensions (Swartz and et. al.,
2020). From the perspective of Starbucks, the culture of organisation includes company strategy
and the development of business growth. In the context of business specific trends and industry
analysis this is used to obtain successful factor for managing the consumption of products.
Starbucks corporate culture implement and enable culture that leads to implement subsidiaries
for all locations of business. Hofstede's cultural dimensions theory is an effective framework
which demonstrate cross-cultural communication as it is developed by Greet Hofstede. This also
demonstrate it's impact on the society culture and values. In the context of Starbucks culture
theory of Hofstede's relate culture and value of individual with motive of analysing values and
states of organisation. Individualism versus collectivism index is appropriate for individuals and
other persons that are related within community. Starbucks face issue in Australian market to
manage and operate their store because of weak organisation culture. Moreover, hofstede's
culture and the individualism versus collectivism index is more effective because it helps
Starbucks management to analyse and understand the relations between individuals. This results

it is easy to identify persons who are not taking responsibility and authority to perform their
action or role in an appropriate manner.
Servant leadership approach is implemented by the Starbucks corporation which leads to
characterizes behavioural manifestation for company culture. This also leads leaders to manage
and perform work according to the organisation culture among leader, corporate leaders and the
team leaders. This emphasize and support subordinates to ensure growth for employee's related
with growth and development of employee's. Moreover, the feature of Starbucks corporate
culture translates employee's work performance as per first approach. This company also
highlights importance of company culture which leads to optimize the employee's morale and
customer satisfaction level. Customers are more focused towards implement of organisational
culture as it leads employee's to care for ones who manage customers work area.
Organisation culture of Starbucks also implement relationship-driven approach that is
used by the business to support warm and friendly relationship. Example- Organisation cafe
leads to generate bonds with individuals as it helps for increasing warmth for the individual that
emphasis on generating better relationship as Starbucks that makes organisation culture. This is
also used by Starbucks to develop global coffee culture as it drives customer demand with
speciality coffee products (ZENG and LU, 2017). Further, Starbucks operate business at global
level so collaboration and communication are important part of Starbucks organisational culture
which improve effectiveness of company culture.
Reflection report
Working on the case study of Starbucks that is based on analysis of management style
and the methods to control current market conditions helps me to understand environment
conditions of organisation. This also define there are various task performed and most of them
relates and work with motive of enhancing revenue and growth for business. In the context of
this research study, there are various task such as PESTLE and SWOT to analyse micro and
macro forces and it is performed by me to manage financial performance for rapid growth and
determining important values which is used for formulating competitive-edge. Further, all task
which are performed by me is completed as per company strategy. Communication skills,
research and analytical skill, organised structure methods etc. are some of the important
techniques which leads me to utilise all models for understanding market area and behaviour of
customers in minimum time period. This defines that notes work as an important part for

business and it helps me to support different perspective through which all activities are managed
according to the decided research structure.
Different challenges are also identified which impacts on - way of conducting the present
study and meet its deadline. It includes challenges related with business structure because
Starbucks perform their function and operations at a large geographical base. This directly
impacts on my work methods due to which it is complex for me to understand organisational
work. Similarly, with engage and understand of work environment employees are able to
perform their work in an accurate manner. With analysis of business perspective Starbucks
monitor and implement action according to international market. So, it is complex for me to
understand all work because each geographical conditions are different from the geographical
area of business. This is also identified by me that management of Starbucks helps in managing
conversion about operational efficiency because it helps in increasing note that also help to
understand importance of notes. So, reflecting on work, leads me in increase my knowledge and
determine areas, where I need to work more, in order to complete future project more
efficiently.
CONCLUSION
With the analysis of above report it is concluded that market environment plays an
important role for an organisation to manage and complete their work according to present
market conditions. PESTLE tool used that helped in evaluating of different types of situation
such as political, economical, social, environmental, technological and legal. SWOT analyse
helped in identifying of strengths, weakness, threats and opportunities that results in attainment
of competitive advantages. Corporate social responsibility is an important factor for organisation
and this helps in influencing business operations of business. Leadership style also an essential
aspect for leaders and managers that helps in improving business area by motivating all
individuals to perform work with organised process.