Successful businesses and organizations keep on changing relevant to consumer preferences, market demands, and industry trends in order to gain a competitive edge in the market. The ability to adapt to change has become highly significant in today’s competitive environment. Today, we’ll discuss Starbucks change management case study; its historical background; reasons that caused the company toward change, strategies and practices, challenges, and lessons learned from the successful change management.
Historical Background of Starbucks
- 1971 – Gordon Bowker, Zev Selgi, and Jerry Baldwin laid the foundation of the premium coffee brand company on 30 March 1971
- 1980 – Howard Schultz joined the company as Director of marketing and retail operations
- 1984 – Shultz persuaded the company’s founders to open up its first franchise branch in Seattle. It became successful, and Starbucks opened up more branches in Seattle and across the US
- 1992 – Starbucks became a public company
- 2000 – Starbucks had a network of 3000 coffee stores
- 2022 – Approximately 402 employees were working for the company, and Starbucks has a network of 35711 branches in 84 countries across the world
What Caused Starbucks To Implement Change – Top Reasons
Global Financial Crisis
Starbucks was dealing with a lot of challenges due to the global financial crisis in 2007 and 2008. It compelled the company to shut down most of the franchise stores that were not performing well. The company lost its focus on its core business ideology due to rapid business and market expansion.
Resultantly, it badly impacted the quality of its product, and it decreased customer satisfaction level and the company’s profitability. In order to maintain Starbucks’ position in the coffee industry, the company’s leadership realized that they should implement change management programs.
Starbucks recognized some of the weak areas that are in desperate need of improvements, and they’re as follows;
- Streamlining various operational and functional processes that would help you to increase efficiency and decrease cost
- Re-shift your focus on those core business areas that are selling well like premium coffee and others
- Focus on amplifying the store experience and customer experience to improve customer loyalty and satisfaction level
Strategies & Practices Executed by Starbucks
Some of the key strategies and practices that Starbucks implemented in its change management plan are as follows;
Starbucks shut down most of its stores that weren’t performing well; streamlined various processes in order to reduce costs and improve operational efficiency
The coffee brand reshifted its focus on core business products and improved its quality and added other similar products
Starbucks started collecting customer feedback and reviews in order to better understand the needs, wishes, and preferences of customers
The coffee brand focused on redesigning the layout and interior and exterior of the store to improve customer experience
The company invested a lot of resources in the training of employees so that they would offer a better customer experience and produce better quality products.
Challenges to Starbucks During Change Management
Some of the key challenges Starbucks faced in the change management program are as follows;
Starbucks faced the major challenge of employee resistance because many employees weren’t on board with the change program. They were happy with how things were going, but it wasn’t heading the company in any direction.
The other problem Facebook experienced is balancing; the company wanted to stick to its core business ideology and introduce new products. Maintaining a balance between both of them was very difficult.
Customer Retention Risk
If the company implements its expected and potential changes, then Starbucks is at risk of losing its customers. The brand has to make sure that it would attract new customers and retain existing customers at the same time.
Result of Starbucks Change Management Case Study Plan
The implementation of Starbucks change management case study plan became successful, and it helped the company in the following ways;
- Improved Starbucks’ profitability with high market share price and value
- Better quality products with the introduction of new products that customers received well
- Customers loved the new store experience with the new layout and design
- Increased customer satisfaction level and customer level
- Starbucks managed to maintain a competitive position in the market
Lesson Learned From Successful Starbucks Change Management Case Study
Some of the key lessons learned from the successful Starbucks change management case study are as follows;
Starbucks effectively communicated the change management plan with its employees, customers, management, executives, and other stakeholders of the company. The brand made sure that everyone was aware of the change program. However, the company employed the following channels to spread the information about the change program;
- Townhall meeting
Starbucks managed to develop a shared understanding with various stakeholders, customers, and employees of the company. Open communication allowed the company to establish trust and credibility with various stakeholders; it helped the company to succeed in its change management program.
The leadership of Starbucks played a significant role in the successful implementation of the change management program. They had a clear vision of the company’s future, and they were committed to the implementation of the changes. However, they made sure that everyone was clear about their roles and responsibilities throughout the CM implementation program.
The key to the success of Starbucks in the change implementation program is following the customer-focused strategy. The company collected the feedback of customers and tried to understand the needs and wishes of customers. It gave key insight to the company’s leadership that the customers want better quality products and new experiences, and the company implemented the same changes.
Starbucks successfully engaged with its employees throughout the implementation of the change program. The company involved them in the planning phase and offered them training to update their skills and expertise. In order to increase their participation, the company offered them rewards and incentives to boost their motivation level. In fact, Starbucks created a culture that focused on continuous improvement, growth, and productivity.
Starbucks followed the flexible approach in its change management program by keep making adjustments to the company’s strategies and plans. In fact, the company welcomed all types of suggestions and feedback from customers and employees and made adjustments to its strategies.
Conclusion: Starbucks Change Management Case Study
After an in-depth study of Starbucks change management case study; we have realized that the coffee brand successfully implemented the changes. If you are learning how Starbucks implemented changes in its change program, then you should keep in mind the abovementioned factors.
Ahsan is an accomplished researcher and has a deep insight in worldly life affairs. He goes Live 3 days a week on various social media platforms. Other than research writing, he’s a very interesting person.