Case study on cafe expresso

This is a detailed report on a research case study cafe expresso. This report throws light on how the company was facing problems because of their stagnant marketing strategy. And how did the company loose its market share and went to number three position after it faced down fall. They appointed a new chief executive Ben Thomson who brought up many changes in the company. This report also highlights about Ben Thomson’s leadership qualities. In this context few of important types of leadership theories and styles are explained. Ben Thomson also appointed Kam Patel as a new global HR who brought many important changes in the organization. This report critically analyses the situation of the cafe expresso and the role played by Ben Thomson and Kam patel, through underpinning theories of leadership, human recourse management and team work. The report also makes few recommendations to the company that will help the company to grow with its goodwill and will be able to get back to the number one position in the market with new name and fame. Table of Contents 1. 0. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 5 LITERATURE REVIEW Introduction This case study elaborates us about a cafe house which was one amongst the most well reputed cafe houses in the world. Due to certain unfavorable situations, the cafe expresso had to face some problems. This report has discussed about Leadership, human resource management and team work in relation to this case study. I have also highlighted certain points on leadership styles and quality, human resource management characteristics and factors, team work and working effectively with the team. The report gives a clear picture on how the company worked together and how the new chief executive Ben Thomson worked in the situation of crisis. Then when the new HR director was appointed what kind of strategies she applied and what kind of new innovative idea she came up with, to encourage and motivate employees. It also discusses what kind of strategic planning she followed and so on. Strategic participation is very important for HR executives who desire to have increased influence in their company. A number of prior studies have suggested a great connection between Human resource management and strategic planning (Uen and Ahlstrom, 2012). Leadership is a special quality that not all individual possess. It is a kind of talent that has to be developed. According to Claydon. et. al, (2010, pg. 295), leadership in an organizational role involves establishing a clear vision and sharing that vision with others so that they follow willingly. In other words, the activity of leading people or a group of people or an organization or the capacity to follow the aim is called as leadership. The report also elaborates on team work and how the entire team in the organization helped the organization to get back its number one position. According to Claydon. et. al, (2010, pg. 650), â€Å"team work is difficult part of administration as it involves employees to work together trying their best to work under any situations and circumstances†. In other words, team work is the process of working together collaboratively with a team of people in order to achieve a goal . The main things that are highlighted in this report is, how did cafe expresso prelaunch their marketing strategy to get back their number one position back. According to Torrington and Hall (2011, pg. 57) â€Å"Human resource management includes conducting job, planning the needs, training orienting, communicating, recruiting the right people for right job†. It was an administrative discipline of engaging and developing employees so that they become more valuable to the organization. The report gives a clear picture of performance management and how did all employees work together to attain the goal. According to Kleynhams, Markham. et. al (2007), â€Å"A work of an employee is to progress towards predetermined goals†. LITERATURE REVIEW Cafe Expresso was one of the most leading cafe houses and it was also one among top three players in the cafe house. Cafe expresso had enjoyed 15 years of advantage of being on number one position. The main drawback which was committed by Cafe expresso was that, they being in a dynamic service sector, they did not change their marketing strategy and hence it caused them a problem, because other competitors from coffee world took over their business strategy and hence they had to face a major drawback in the market. Cafe expresso lost its market share. For a company to succeed in the turbulence of today’s business markets, it must never stand still or allow employees mindsets to congeal. This was one of the main mistakes committed by cafe espresso. Cafe expresso did not patent their company, so that any other companies couldn’t copy their business strategy. (Smith and Day, 2000). Strategic planning in many organizations has never given space for strategic thinking. However the planning is not sufficient. The requirement for strategic planning has never been in demand (Uehlinger,2004). Valuing employees in crucial time and communicating with them can help employee to motivate and reduce tension among employees. It helps building of essential trust and commitment to company. When the company hired a new chief executive Ben Thomson he transformed the entire organizational strategy. Ben Thomson took over the company’s marketing policy to a new level and helped it to come up with new marketing strategy. LEADERSHIP STYLES AND QUALITIES In a business there is a leadership style called â€Å"transformational leadership† which is essential and effective. Transformational leaders have ability, skills and integrity by which they encourage people to manage and communicate (Clegg, et. al, 2011, pg. 141). There are other few styles of leadership that are very famous like, 1. Transactional Leadership 2. Autocratic Leadership 3. Bureaucratic Leadership 4. Charismatic Leadership 1. Transactional Leadership According to Clegg,et. al, (2011, pg. ,138), â€Å"Transactional Leadership is a leadership style that starts with an idea that, the followers agrees to obey their leader â€Å". In this kind of leadership the leader has all the right towards their employees. This is such a kind of leadership which is based on management more than a dictator kind of leadership. In this kind of leadership the employees are encouraged by giving incentives, commission etc. 2. Autocratic Leadership According to Torrington,et. al, (1998, pg. 295), â€Å"Autocratic Leadership is a kind of leadership is an extreme kind of leadership where only the leaders have control over their employees†. This kind of leadership is used only in crisis when any kind of complex decisions have to be taken. That permits groups to relate their attention on performing there given tasks and vision, mission. 3. Bureaucratic Leadership According Torrington,et. al (1998,pg. 299), â€Å"Bureaucratic leadership is a Style where they work by books, follow procedures and ensure that their people work accordingly†. This can cause resentment when members don’t follow their advice or expertise. 4. Charismatic Leadership According to Clegg. et. al, (2011, pg. 139) â€Å"the difference between charismatic and transformational leadership lies between their main intention. The important side of charismatic leaders is that they believe more in self than in teamwork. In this kind of leadership if leaders take wrong decisions the whole company collapses. From the above mentioned 4 types of leadership, it can be concluded that, Ben Thomson was a transactional leader. He took up all the important managerial responsibility of the organization and also encouraged his employees simultaneously. We can also call him a charismatic leader, because he came up with certain ideas of employing a new global HR who took up the risk and applied it in an organization, where all the employees agreed to work accordingly and hence they succeeded to achieve their goal. According to the charismatic style of leadership the main intention was to reintroduce the entire marketing strategy in an organization. Kam Patel also can be regarded as transactional and charismatic leader. She took up risk of giving the opportunity to the store managers to take interview of new candidates and also gave opportunity to selected candidates to work on half-trial basis. According to Sparrow,et. al (1998, pg. 245), â€Å"a magnanimous leader is one who sees that a proper credit is given to all his/her employees†. Kam Patel is a magnanimous leader. This kind of leaders helps the employees to concentrate and grow better day-by-day. To become famous and take responsibility of failure needs courage that is a hallmark of leadership. HUMAN RESOURCE STRATEGY According to Torrington, et. al, (1998,pg. 69), the human resource management is about assurance and attitude, which is carried in business environment. (Eg: Kam Patel took into consideration about the wages and interest of employees). The following few factors are taken in to consideration while discussing about HRM. 1. Environmental factors 2. Share Holder 3. Human resource strategy 4. Long-term outcomes. According to Maund. et. al, (2001, pg. 71), human resource management has become very popular in western countries. It is very important how HRM is being handled for the success of the business. Like fashion and new trends in technology the human resource strategy also keeps changing day to day. Characteristics of Human resource management (Maund,. et. al. 2001,pg. 32. ) 1. A particular path of promises and hypothesis 2. A strategy informing and involving decision about employee 3. The central participation of all managers 4. Reliability to improve employment relationship. 5. Huaman resource management is about commitment, trust and employee-centered According to Wright, Gehart, et. al, (2010, pg. 350), companies that look for competitive advantage from employees must be ready to manage the outputs and attitudes of all the employees. Performance appraisal is a legal/official duty that is followed by managers and is accepted as the primary responsibility of human resource function. Managers now look at performance appraisal as annual belief. Kam Patel was very much aware of the situation and the environment in the organization hence she took a decision of making performance appraisal by making the employees of the organization as partners of cafe expresso. This was one of the new HR strategy which was introduced by her. She also stressed more on the following points like business strategy, resourcing and retention, learning and development, talent management, employee involvement and communication, compensation, incentives and benefits. Motivation: According to Maslow (1965), motivation refers to encouragement or supporting to work more effectively (Clegg, Kornberger and Pitsis,2011, pg. 148). In this context, it shows how Kam Patel, also focused on the compensation and benefits. She introduced new discount program, where the employees of the organization could have 30% of discount in all coffee stores globally. PERFORMANCE MANAGEMENT Performance management is one of the key factors that are supposed to be included in the management sector (Loewenberger, 2012). It includes few essential factors like, 1. Leading and motivating 2. Learning and development 3. Reward and recognition 4. Involvement, participation, and empowerment 5. Managing teams 6. Assessing performance Performance management is one of the key factors in the organization because it involves the efforts that are taken by the management and the leader (Loewenberger, 2012). The cafe expresso had to concentrate more on performance management because they had lost their market share. And also, because of less wages, they had few employees. So they had to concentrate more on performance management criteria to get back their position, because some where Ben Thomson and Kam Patel knew, how to handle and deal with performance management. Hence they were successful. TEAM WORK According to Torrington and Hall, (1998, pg. 335), a team can be described as a certain number of individuals working together to achieve a common goal. While performing in an organization the team comes at the beginning and the individual comes later. All the task that individual member does is regarded as the fulfillment towards the teams goal rather then their individual credibility. In other words, a team can be termed as more psychologically committed to each other to achieve a common target in which all employees are involved and share some amount of responsibility and outcome (Clegg, Kornberger and Pitsis, 2011, pg. 88). In the case of Cafe expresso, Kam Patel encouraged the employees of the organization to work in unity. She focused on appointing new partners through window advertising and verbal evidence. This approach worked very well for her because quite a lot of partners actually understood the marketing strategy and marketing approach of the organization. This kind of behavioral approach shows how Kam Patel worked indirectly on teamwork and took efforts to reach out to the employees. FUNCTIONS OF TEAM WORK (Loewenberger, 2012): 1. Task 2. Maintenance 3. Self-orientated 4. Collective performance 5. Positive energy 6. Complementary skills TASKS PERFORMED BY TEAM WORK Task is one of the main functions of team when they work together. A real team has a common approach goal and strategy to work together to achieve its goal. While working in team if people don’t challenge each other they will not be able to work effectively and independently. In a high-functioning team, people enjoy their work because any problem which comes across the team, becomes a challenge to them and hence they enjoy it. So any problem or difficult situation which ever comes across them they take it as a challenge (Loewenberger, 2012). In the case of cafe expresso the loss of market share and the loss of their number one position was one of the main challenges and it was a very difficult situation.. CONCLUSION It is believed employees and relationships are at the core of the business success. Hence from the above report we can draw a conclusion that cafe expresso was one of the leading cafe expresso and due to their stagnant marketing strategy they did not bring in any essential changes in their organization. Hence their marketing strategy remained the same for 15 years. In the mean time, other coffee houses copied their marketing strategies and plans, which affected their market share and hence they lost their position in the market. Under the active leadership of Ben Thomson and Kam Patel, the company undertook many new steps and tried to improve their marketing strategy. Kam Patel being the new HR manager introduced few ideas because of which the company got its position back. Even the employees were encouraged and motivated. Because of above factors, they recaptured their market share to some extent and were able to move to number two positions as the best cafe house across the globe. The company made many changes and followed new practices in the area of HRM, teamwork, leadership, and performance management to resolve their problems. When Ben Thomson and Kam Patel worked together as a team they were very successful and hence they enjoyed their work and came up with new strategies, which actually helped the team to achieve their market share and also helped to regain their position in the market. When Kam Patel actually brought up the new policy of making the employees as the business partners this strategy helped directly to the organization because each and every individual would with more interest and enthusiasm because they would feel that somewhere they were also responsible towards the success of the company. The strategy of feedback from customers helped the organization to develop and improve . She also introduced a coffee program called â€Å"coffee master â€Å"which enabled the employees to become ambassador. The discount of 30%added up to motivate the employees in a positive attitude. RECOMMENDATION After the analysis of the case study as a management student I strongly recommend SWOT analysis that is explained below with help of a diagram. Internal Factors STRENGTHS WEAKNESS Marketing expertise Innovation Location Quality process Business that adds value to service Un- differentiated service Risk of stagnant marketing strategy Low employee morale Wage plan External Factors OPPORTUNITY THREAT Improve performance Innovation Patents Adding of new services Endorsements by celebrities Can be expensive Can be copied Can become hectic work for employees Can cause a problem for taxation 1. The company should introduce a scheme where a particular employee is been rewarded regardless of his incentives. 2. The company should develop their own USP to reach out to more customers. 3. The company should understand the competitor’s strategy well and try to be more innovate in their own strategy reach out to more customers in order to regain their number one position. 4. The company should carry out some training sessions that are going to be more creative and fun 5. The customers who visit regularly should be given some discount when the customer buys any mega deal 6. The company should maintain the standard salary of the industry to retain their employees. 7. The customers should be given a card on which they can add credit points on the basis of coffee they purchase so that when the customer buys the same coffee next time he gets a discount. 8. The customer should be encouraged to invest in the companies share by doing this the customer will indirectly help the company to advertise and hence the company will get publicity. 9. If the company adds some more kind of flavors and varieties this will attract the customers.