Enhancing Organisations and Employability - Case Study Example

Enhancing organisations and employability Introduction and Company Overview The dynamic business environment in today’s world has influenced organisational changes and processes of addressing opportunities and threats to sustain and stabilize global business transformation. Change management is a very common term in today’s global business structure. Due to the continuously evolving strategies and goals of businesses, change has become an inevitable part of a number of organisations (Cummings and Worley, 2014). The process of change management ensures that the organisations are appropriately responding to their operating environments. The process of change management generally initiate from the dissatisfaction of the current strategies of the organisation. On the other hand, a number of variables impose resistance to the proper implementation of change in any organisation (Todnem By2005). The further discussion of this study will identify and evaluate the organisational problem situation of Starbucks Corporation through analysing its internal and external environments. Starbucks Corporation is an American multinational coffeehouse chain which generally operates as a marketer, retailer, as well as roaster of specialty coffee products across the world. Starbucks Corporation was established in 1971. The organisation is specialized in serving instant coffee, whole-bean coffee, full-leaf tea, hot and cold beverages and other food items such as snacks, sandwiches and pastries. The organisation also sells a number of tea and coffee products as well as licences their products through various other stores. In addition to their Starbucks brand, they also sell products under various other brand names such as Tazo, Teavana, Evolution Fresh etc (Starbucks Coffee Company, 2011). As per their company data, the organisation consists of approximately 182,000 employees across the world. The organisation possesses 21,536 stores across 65 countries out of which 12,218 are based in the US. According to the data of 2013, the organisation has recorded revenue of $14.89 billion (Starbucks Corporation, 2013a). The discussion will therefore, structure the problem situation from an appropriate perspective while developing a problem statement. Finally, the study will offer suitable recommendation for the solution of the problem situation. Identification of Organisational Problem Situation/ Opportunity The process of proper identification of the problem situation as well as the opportunities of the organisation required to consider the extensive internal and external analysis of the business. The analysis of the Porter’s five force framework will provide an illustrated view about the external business environment of the organisation including the intensity of rivalry, consumer’s and supplier’s demand. This framework will assist the management to analyse the current competitive environment of the business to determine the challenges it faces as well as the available future opportunities (Dobbs, 2014). Rivalry of existing competitors: In terms of global coffeehouse chains, the competition within the existing rivals in the market is very high. The organisation is operating its business within a highly mature market. The market possesses a number of competitor brands such as Dunkin Donuts, Costa Coffee, Caribou Coffee, Diedrich coffee and McCafé. Apart from these big players there are a number of small and medium sized local competitors available in each geographical location. Most of these competitors are offering similar products and services such as specialty coffee and high quality food items. The rapid development of rivalry and lack of differentiation of the market has caused early market saturation for the organisation (Brizek, 2012). Pressure of new entrants: The threat of the new business entrance in the existing market of Starbucks is moderately low. The specialty coffee market is highly saturated within various developed countries. The major players of the market are highly established and financially sound. Hence, the newcomers need to arrange huge initial investment to secure a competitive position within the market. On the other hand, product differentiation and new product innovation can assist new organisation to grab a competitive position within the market (Elder, er al., 2014). Bargaining tendency of consumers: The product switching tendency and bargaining power of the consumers are very high within this industry segment. All the competitors offer almost similar products. Hence, this provides consumers wide range of choices. The product quality and pricing of the competitors are quite similar. Therefore, the product switching cost for the consumers is very low. The advancement of technologies in terms of home brew coffee products and coffee machines has also provided the consumers the power of bargaining (Pangarkar, 2015). Pressure of substitute: The substitutes of the products of Starbucks include different flavours of tea, soft drinks and juices. The availability of a number of substitute products under the banner of Starbucks has minimized the market competitions. On the other hand, the availability of multiple meeting points such as pubs and bars has increased the competition for the organisation (Elder, er al., 2014). Power of suppliers: The bargaining power of the suppliers of Starbucks is quite high. The demand of coffee products is increasing day by day while the good quality coffee beans are only available within selected locations across the world. Moreover, the poor condition and ill behaviour of coffee making organisations with the African coffee bean producing farmers has influenced various non-governmental organisations to act against them. These steps have also increased bargaining power of the suppliers (Brizek, 2012). Apart from the analysis of five forces framework and understanding and assessment of the internal organisational strength and weaknesses as well as external opportunities and threats will also provide a detailed overview of the problem situation and opportunities of the organisation. Strengths: Strong global reputation and image of the brand is one of the major strength of the organisation. Favourable access to the high quality suppliers and strong distribution channel. Strong financial condition of the organisation. The largest coffee house chain across the globe. Weaknesses: Increase in the prices of raw materials, specially the coffee bean products. High price range of the coffee products and other food items. Employee dissatisfaction and negative reputation of the organisation due to unpredictable shift changes of Barista. Negative publicity of the organisation regarding tax avoidance. Opportunities: Expansion of the business within the emerging economies of the world. Diversification in the business line and offered product. Rise in the demand of coffee products within South Asian market. Threats: Rapid increase in the competition within the local as well as global marketplace. High market saturation due to less differentiation of product within the developed market. Trademark infringement by Dumb Starbucks. Decrease in the purchasing tendency of consumers due to economic crisis and introduction of low priced newcomers. (Source: Moon and Quelch, 2003; Starbucks Coffee Company, 2011) The analysis of the external and internal environment has evaluated that the increase in the competition within the core markets of the organisation is the major problem situation for the organisation. Simultaneously, the rapid saturation of the potential market is also causing problem for the desired profit generation of the organisation. Along with these situations, the negative publicities of the organisation in terms of employee management and tax payment increases market as well as customer disapproval towards the organisation. By the year of 2007, this problem situation has caused almost 40% fall in share prices of the organisation. On the other hand, the analysis has also evaluated the possible opportunities of the organisation in terms of expanding the business within new and emerging market segments. Business and product line diversification can also be considered as one of the major opportunities. Framing/Perspectives Adopted Starbucks Corporation has undertaken a number of strategic decisions to alter the present market situation of the organisation. The strategic plan of the organisation is focused on 5 years growth of the organisation. The present market situation and the downfall in the share prices of the organisation have influenced the management to bring back the founder, Howard Schultz, in the CEO position. The management of the organisation along with Howard Schultz has adopted a number of strategic plans to increase their market competitiveness (Starbucks Corporation, 2013a). This strategic plan has allowed the organisation to set-up a number of objectives such as: Securing and maintaining the position of leading coffee house by 2030 while witnessing positive growth in the US market share. This objective of the organisation is followed by their strategy to localize their products and services as per the demand and preferences of the consumer’s within different geographical areas. This objective is also backed up by the strategy of introducing healthier food items in the product menu as well as expanding the business ventures within the emerging markets such as China, Asia Pacific etc. The global expansion strategy of the organisation has also influenced the promotion of K-cup machine (Starbucks Corporation, 2013b). Another objective of the organisation is to become the most innovative beverage company within the industry. This organisation has also adopted a number of strategies to back-up this objective. Their main strategy is to expand their ranges of Consumer Packaged Goods (CPG) along with the innovative products. They have also adopted the strategy to expand and improve their production facility within the US as well as other market areas (Starbucks Corporation, 2013b). The objectives of the organisation also encourage the management to secure a leading position within the food chain of global market by 2020. The organisation has initiated the functioning of LB Bakery stores and LB restaurants within different parts of the US. Their strategy is to expand the functioning of LB bakery and restaurant across the different market segment of the organisation. The organisation has also initiated the in-house research and development program to maintain and improve their product quality (Brizek, 2012). Globally expanding and successfully managing the supply chain network of the organisation can be considered as one of their major objective. The management has adopted the strategy of vertical integration to properly actualize this objective. The 5-years growth strategy of the organisation also influences the management to continue the promotion of their C.A.F.E. culture. This strategy is also focused on expanding their supply chain network as well as brand awareness within the emerging markets of the globe (Starbucks Corporation, 2013a). Finally, the growth objective of the organisation influences the management to improve and promote the relations within the stakeholders of the organisation. The organisation has adopted the strategy of proper integration of the stakeholders from different geographical location to establish a collaborative business function (Starbucks Corporation, 2013b). Problem/ Opportunity Statement Starbucks Corporation has adopted new objectives and strategies to increase its market share within the global market. The organisation has initiated its activities towards diversifying and expanding its market on the developing and emerging markets of the world to eliminate the impacts of the market saturation. The implementation of their growth strategies will bring significant changes in the organisation’s work culture, behaviour and stakeholder relationship. The implementation of the strategies will not be successful without the proper consideration and solutions of different internal and external problems related to the adaptation of the change. The change in the organisational work practices, structure and stakeholder relationship can highly affect the work process and business practices of the different levels of employees of the organisation’s global branches. It will also affect the investors and external stakeholders of the organisation in terms of their understanding about the growth perspectives of the organisation. Therefore, it can hinder the proper and desired indulgence of the employees and other stakeholders in the strategic movement and changes of the organisation. These problems can hinder the proper understanding of the employees of the organisation regarding the changes in the work cultures and practices. These problems can also affect the relation of the organisation with their external stakeholders as the changes can generate the threats of uncertainly within their mind. The problems need to be handled within the process of implementation and actualization of the demonstrated strategies. The proper solution of the problems related to the adaption of the strategic changes of the organisation within the external and internal stakeholders will enable the management to generate desired outcomes in terms of their strategic change implementation. The problem needs to be properly fixed through the utilization and implementation of organisational change management models. Recommend and Justify Appropriate Solutions The organisation needs to execute Kotter’s 8-steps change management model to successfully and powerfully implement the desired changes within the different levels of the organisation as per their strategic decisions (Varkey and Antonio, 2010). This model has summed up the perceived eight step processes to initiate and execute a successful transformation process for organisations. The eight steps offered by the author include establishing a sense of urgency, formation of powerful coalition, creating a vision for the implementation of change, communication of the vision, removing obstacles by empowering others, creation of short-term achievements, consolidation of the improvements and build on the change and anchoring the new approaches in the organisational culture (Mishra, 2013). Establishing a sense of urgency: The successful implementation of change requires to create a sense of urgency within the workforce regarding the need for the change. This process allows the management to influence initial motivation of the employees of the organisation towards the achievement of the desired goals. The process of establishment of the urgency regarding the need for change within the organisational function needs to focus on identifying the potential threats within the market place (Varkey and Antonio, 2010). The management also need to examine the available opportunities to eliminate or neutralize the threat within the marketplace. Hence, the management needs to frequently and effectively discuss the potential crisis and their organisational effects to the employees. They also need to impart the information regarding the positive impact and outcomes of the implementation of changes to the different levels employees. The management also need to conduct frequent meetings with the investors to communicate their plan and the effectiveness of the plan on the successful transformation of the organisation. The management can utilize different media such as business magazine, annual reports, interim reports and digital media to communicate the crisis and their effects as well as the impacts of the implementation of the changes to the shareholders and customers. This process will enable them to attract the interest of the stakeholders towards the process of strategic changes of the organisation. Formation of powerful coalition: To convince people about the necessity of the changes, the management needs to indulge strong leadership as well as visible support from various key people within the organisation (Mishra, 2013). The organisation needs to assemble a group of strong, powerful and visionary leaders for the execution of the changes within the organisational practices. The management needs to build different powerful teams within the organisation to properly execute the processes of organisational transformation. The management also need to check the weak areas of each team. Hence, they need to ensure that every team possesses good mix of employees to eliminate those weaknesses. Creating a vision: The management need to create achievable vision to set a proper direction for the implementation of strategic changes within the organisation. This vision should complement the values of the desired changes of the organisation. The management must redesign their strategies as per the vision of the organisational transformation and changes. Communication of the vision: The change in vision and strategies should be communicated with the internal as well as external stakeholders by utilizing all the possible communication channels (Greer. and Ford, 2009). The organisation can utilize their own website, other digital channels, television, print media and press conferences to communicate the vision and strategies to the potential stakeholders of the organisation. The management also need to address the anxiety and uncertainty of the stakeholders while applying the vision and strategies within all the operations of the organisation. Removing obstacles: The management needs to encourage the risk taking attitude of the change leaders through rewards and recognition. They also need to identify the resistances to the implementation of changes. Therefore, they need to take quick actions to remove every barriers or resistances. The management can organise motivational and educational sessions for the employees those are creating barriers. Short-term achievement: The management must create short and achievable missions to ensure short-term achievements. They also need to highlight these achievements to the other stakeholders to increase their confidence towards the implication of the change. The management should be very cautious in terms of eliminating such short goals that can generate huge expenses to the organisation. They also need to reward those people who have assisted in achieving those goals. Consolidation of the improvements: After every achievement, the management must analyse the positive and negative sides of all the activities. Therefore, they need to redesign their goals accordingly. The management must focus on the process of hiring and training compatible employees who demonstrate the capabilities to actualize the change strategy of the organisation. Anchoring new approaches: The final stage of the change management describes the need of institutionalizing the changed approaches. This process requires the generation of connection within the new changed organisational processes and organisational vision (Greer. and Ford, 2009). The management must reform the organisational strategy and vision as per the changed organisational process. Conclusion The overall discussion of the study has evaluated the requirement of change within the organisational process of Starbucks Corporation. Hence, it has discussed the process of successfully implementing and managing change within the organisation. The discussion has emphasized on the problem situation of the business which include saturation of market and increase in competitiveness. The study has also illustrated the objectives and strategic perspectives adapted by the management or the organisation to utilize the global opportunities in terms of eliminating the problems. The problem statement has evaluated the obstacles in terms of implementing the change strategies. It has also emphasized on the requirement of elimination of these obstacles. Finally, the study has illustrated Kotter’s 8-step change management model to suggest appropriate solutions in terms of successfully implement the changes in the organisation. Reference List Brizek, M. G., 2012. Coffee Wars-The Big Three: Starbucks, McDonald’s and Dunkin’Donuts. Journal of Case Research in Business & Economics, pp. 1-5. Cummings, T. and Worley, C., 2014. Organization development and change. Connecticut: Cengage learning. Dobbs, M., 2014. Guidelines for applying Porters five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp. 32-45. Elder, S. D., Lister, J. and Dauvergne, P., 2014. Big retail and sustainable coffee: A new development studies research agenda. Progress in Development Studies, 14(1), pp. 77-90. Greer, B. M. and Ford, M. W., 2009. Managing change in supply chains: a process comparison. Journal of Business Logistics, 30(2), pp. 47-63. 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Varkey, P. and Antonio, K., 2010. Change management for effective quality improvement: a primer. American Journal of Medical Quality, 25(4), pp. 268-273. Read More