Question
1
Analyze Starbucks using the competitive force and
value chain models.
Answer
Customers
The user of information system achieves a low cost
leadership; there are low operation costs and therefore a company can afford to
charge lower price. 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 to pay with prepay or top up their card
and use this at every branch to pay for their drinks by scanning bar code
displayed on their phone. This is showing the use of management information
system making the customer experience more efficient and of a better quality at
a retail level of the supply chain.
Substitute Product and
Services
Starbucks also used product differentiation and information
system to alter their existing menu. They have now enabled new product for
customer convenience and offered price reduced specials, to be able to change
lower price Starbucks had made alteration 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.
New Market Entrants
To focus on the market niche 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 ‘Starbucks Digital
Network’ which is a portal designed specifically for mobile devices and
optimized for smart phone operating systems.
Suppliers
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 system 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.
Question 2
What is Starbucks’ business strategy? Assess the role
played by technology in this business strategy.
Answer
Starbucks business strategy was to continue serving
high end specialty coffee production. Technology assisted the business strategy
due to the addition of 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 phone.
Question 3
How much has technology helped Starbucks compete?
Explain your answer.
Answer
Without the use of technology, Starbucks would have
been unable to launch the Starbucks Digital Network and the use of paying via
Starbucks apps on smart phones. Besides that, the newer in store technology
helped baristas reduce the time of making drinks, improve customer service and
speed of service, allow Starbucks to generate higher level of revenue.
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