Monday, 25 November 2013

Case Study 2 Interactive Session: Technology Technology Helps Starbucks Find New Ways to Compete

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.

No comments:

Post a Comment