1. Analyze Starbucks using
the competitive forces and value chain models.
The following case study on the global coffee
chain Starbucks is based on the ability of competing with the assistance of
technology. Companies are using management information systems to assist them
in many ways such as product quality and efficiency as well as customer
service/customer intimacy. Starbucks is proud owner to 16,850 coffee shops and
has internationally opened global franchises. Starbucks hit a few business
implications in the year of 2008 and had to use different business strategies.
In regards to the competitive forces, Starbucks had to alter their ideas in
order to remain at a competitive level.
The use of information systems achieves a low cost
leadership; there are low operational costs and therefore a company can afford
to charge lower prices. Starbucks engaged in the mobile digital platform
when realizing over a third of their customers were smart phone owners. The
Starbucks App allows regular customers o pre pay/top up their card and use this
at every branch to pay for their drinks by scanning bar code displayed on their
phone. The app allows customers in a hurry to pay quickly, showing the use of
management information systems at a retail level of the supply chain making the
customer experience more efficient and of a better quality. Streamlining
business processes meant a shorter customer wait due to the time of making the
drink being reduced, which essentially meant each barista could make more
drinks by the hour, therefore increasing revenue.
Starbucks also used product differentiation and
information systems to alter their existing menu. They have now enabled new
products for customer convenience and offered price reduced specials; to be
able to charge lower prices Starbucks had made alterations in their supply
chain. They had to match what their fellow competitors were offering, although
thanks to low cost leadership Starbucks were able to operate more efficiently
and save on operational costs due to faster and better customer service. The
reductions spent in making the drinks allowed the company to return to the
profitable level.
The third competitive force
being to focus on the market niche meant Starbucks had to attempt on
narrowing the target market better than their competitors. An information
system assists this strategy as it can produce data to analyze future sales and
marketing techniques. Using the fact that the mobile digital
platform meant many consumers use smart phones; Starbucks engaged into the
‘Starbuck Digital Network’ which is a portal designed specifically for mobile
devices and optimized for smart phone operating systems. The site offers
free Wall Street Journal access, iTunes downloads and various
other perks. Starbucks loyal customers spend time in the stores and receive
free Wi-Fi access.
Strengthening customer and supplier intimacy is
essential for large companies whose consumers may feel insignificant. The case
study displays customers felt as though they were visiting a fast food chain
due to the their experience being very brief. Management information systems
and streamlined business processes have allowed time saving to transfer into
providing a better customer service; customers now feel more connected with a
friendlier service, the chain have also started adding names to their customer
drinks to offer a more personalized service and better customer experience.
2. What is Starbucks’ business
strategy? Assess the role played by technology in the business strategy.
Starbucks business strategy
was to continue serving high end speciality coffee and improve the customer
service so that consumers did not feel like they were visiting a local fast
food chain. Additionally, it is to also improve customer service and
eliminating inefficiencies in coffee production. Technology assisted the
business strategy due to the addition of the mobile digital platform and the
Starbucks Digital Network, giving customers the benefit of free Wi-Fi access
and Starbucks Apps to access on their smart phones.
3. How much has technology helped
Starbucks compete? Explain your answer.
Without the use of
technology within the innovation of Starbucks, the company would have been
unable to launch the Starbucks Digital Network, and the use of paying via the
Starbucks App on smart phones. To add, the newer in store technology helped the
baristas to make drinks faster, improving customer service and speed of
service, allowing the company to generate a higher level of revenue.
No comments:
Post a Comment