Starbucks Information System Management
Q1. Explain how you think technology has helped Starbucks achieve to boost up its revenue? Give at least two examples.
Technology has enabled Starbucks to improve its revenue. Technology plays an essential role in the current workplace by transforming the way businesses carry out their day to day activities to improve revenue and communication (Pfano & Beharry, 2016). It also enhances better customer service, increased productivity and flexibility. For example, Starbucks adopted a new method of mobile order and payment, which assisted the customers in purchasing without queueing. This accounted for 21% of the transactions in the stores. Starbucks is looking forward to adding new features such as music and delivery to the mobile application (Roderick, 2015). Starbucks uses technology through the use of virtualized menu that allows customers to order. They also use Artificial Intelligence to forecast and understand the customer’s preferences. They have adopted technology in blenders and grinders that works 16 hours every day.
Q2. Explain how data analytics has helped Starbucks achieve operational excellence?
Data analytics has assisted Starbucks to attain operational excellence. Data analytics is the art of evaluating raw data to come up with inference about information (Batistič & der Laken, 2019). The analysis entails the population size, competitors, and income. Starbucks uses Artificial Intelligence to predict economic aspects, such as revenue and profit. Revenue is the total amount of money generated from the sale of beverages, while profit is the amount of money that remains after the deduction of expenses from the revenue. The geographic information system technology used in location-based analytics is helpful in selecting a new location of operation. This enables Starbucks to diversify by adding more stores to the areas of high population and demand. Therefore, increasing the number of customers resulting in operational excellence (Panda, 2020). According to Rachel (2018), data analytics assist Starbucks to come up with a pricing strategy and product development plan which promote its operational excellence. Pricing strategy entails having a product price that is affordable to its customers. Product development plan involves coming up with products that meet the needs and standards of the consumers.
Q3. Identify two scenarios where Starbucks has successfully used technology to develop customer intimacy. Explain how customer intimacy has been achieved in each scenario.
Starbucks has developed customer intimacy successfully using technology. Firstly, using reinforcement learning technology. In this technology, the system makes decisions based on the customer’s feedback (Sokolowsky, 2019). Secondly, by using the Starbucks Digital Flywheels. This technology helps customers pay and order with ease.
The reinforcement of learning technology has attained consumer intimacy. By using the mobile application, consumers are able to make customized orders. The intimacy is achieved through the customer ability to get possible recommendations for the item they are likely to enjoy. This technology also allows the mobile application to understand each customer better (Sokolowsky, 2019). Consumer intimacy is also achieved through adopting Digital Flywheels Technology. Starbucks develops an aspect where it provides a first and more convenient way to make orders by the customers and a sensible and easy way to make order payments to Starbuck.
Q4. Compare Starbucks services with any ONE of its competitors in Saudi Arabia. Justify which one of them is having a competitive advantage and why.
Starbucks can be compared with Dunkin’ donuts in Saudi Arabia as they provide similar products and services. However, Starbucks has more stores globally compared to Dunkin’ donuts (Butler, 2018). It has more outstanding brands and customized products. It offers free internet services to customers. Dunkin’ donuts look like traditional eateries for coffee, donuts, and fast food (Butler, 2018). They provide competitive pricing targeting the middle class for its products relative to Starbucks.
Dunkin’ donuts have a competitive advantage over Starbucks. Dunkin’ donuts offer its products at relatively affordable prices aiming at the middle class who are the majority of the population in Saudi Arabia. Besides, it provides a variety of products to its customers compared to Starbucks, which concentrates mainly on beverages.
Q5. Make at least two recommendations of your own as to how other coffee business in Saudi Arabia should use technology to boost up their businesses?
Technology can be adopted by coffee eateries in Saudi Arabia to improve their performance. It speeds up communication in the coffee business. Customers need not to queue for long when making inquiries and orders. Coffee businesses should come up with an advanced mode of communication with customers. Coffee eateries can use automated marketing option. This involves advertising their products on social media to promote their products and services. Coffee businesses can also incorporate electronic transactions using mobile applications. Society finds it more effective and efficient to use mobile payment due to its simplicity and transparency.
References
Batistič, S., & der Laken, P. (2019). History, Evolution and Future of Big Data and Analytics: A Bibliometric Analysis of Its Relationship to Performance in Organizations. British Journal Of Management, 30(2), 229-251. https://doi.org/10.1111/1467-8551.12340
Butler, L. (2018). Coffee’s Dark Secrets: Linguistic Variation in Starbucks and Dunkin Donuts. Lingua Frankly, 4. https://doi.org/10.6017/lf.v4i0.10391
Panda, .. (2020). Brewing with a dash of Data and Analytics – Starbucks – Digital Innovation and Transformation. Digital Innovation and Transformation. Retrieved 22 September 2020, from https://digital.hbs.edu/platform-digit/submission/brewing-with-a-dash-of-data-and-analytics-starbucks/.
Pfano, M., & Beharry, A. (2016). The effect of modern office technology on management performance: Durban Westville. Retrieved 22 September 2020, from.
Rachel, .. (2018). Starbucks’ secret ingredient: data analytics – Digital Innovation and Transformation. Digital Innovation and Transformation. Retrieved 22 September 2020, from https://digital.hbs.edu/platform-digit/submission/starbucks-secret-ingredient-data-analytics/.
Roderick, L. (2015). How Starbucks is using technology to boost revenue – Marketing Week. Marketing Week. Retrieved 22 September 2020, from https://www.marketingweek.com/how-starbucks-is-using-technology-to-boost-revenue/.
Sokolowsky, J. (2019). Starbucks turns to technology to brew up a more personal connection with its customers | Transform. Transform. Retrieved 22 September 2020, from https://news.microsoft.com/transform/starbucks-turns-to-technology-to-brew-up-a-more-personal-connection-with-its-customers/.