Change Management
Management Theory
Change management: Starbucks case study
Kotter & Cohen (2002) outline an 8-phase change process to explain why some organizations succeed and others do not at change management. These stages of change include increasing the sense of urgency for change; building a guiding team for the change; getting the change vision right; communicating to stakeholders to generate enthusiasm or 'buy-in'; empowering action; creating short-term wins; not letting up; and making the change 'stick' (Kotter & Cohen 2002: 6). All of these principles can be seen in the case of Starbucks, a popular coffee retailer that saw its fortunes flagging until it decided to drastically improve the quality of its coffee and focus on international rather than domestic expansion.
In 2008, Starbucks was in a state of crisis. The Seattle-based coffee chain had become wildly profitable and popular and spread across America, often opening stores very close to one another in defiance of conventional business wisdom. The concept behind Starbucks was to provide an accessible European coffee experience and with a hometown feel to every store. Unlike many franchises, Starbucks was known for tailoring the resources of its stores to the needs of the specific, local customer base. However, by 2008 Starbucks was facing major revenue loss due to criticisms that the quality of its coffee had deteriorated and was not worth the price. Also, "Starbucks' business model had spiraled out of control," with seven new stores opening a day (Kowitt 2008). This rapid expansion had resulted in a loss of quality control for the organization.
This was a critical failure for Starbucks given that the price of its coffee was...
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