Starbucks Case Study
Wee Chong Wei
Team 2
Case 2: Technology helps Starbucks find new ways to compete
1. Customers - Use of information system will help to achieve low cost leadership where low operating costs allows a company to charge at a lower price. Starbucks employ the mobile digital platform, when it discovered that over a third of their customers were smart phone users. The Starbucks App enable regular customers to pay with a pre-paid and rechargeable card at any branch by scanning a bar code displayed on their phone. Information system such as the Starbucks App and Digital Network provided customers with another means of communication with Starbucks. This leads to a higher level of customer satisfaction and increase revenue.
Substitute Product and Services
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Starbucks business strategy was to offer customers a unique experience in high-end specialty coffees and beverages as well as better customer services. First, the company revamped its in-store technology and sought to integrate its business processes with wireless technology and the mobile digital platform. Second, Starbucks pursued a more aggressive product differentiation strategy, intended to emphasize the high quality of its beverages and efficient and helpful customer service. Lastly, Starbucks also focused on becoming ‘lean’, like many of its competitors, eliminating inefficiency wherever possible.
Starbucks implemented a technology that allows customers to pay using a smartphone application which was integrated with the Starbucks Card System. This allows regular customers to pay with a pre-paid and rechargeable card at any Starbucks branch. This application only requires the customer to show the cashier the bar code displayed on the screen of smartphone to make payment and was reported by customers that it was faster than traditional forms of
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If Starbucks did not consider the use of technology, it would not have been able to launch the Starbucks Digital Network and ease of payment via the Starbucks app with the smart phone, that helped to improve its customers’ satisfaction and convenience. In addition, the newer in-store technology has also streamline the work of the baristas by reducing the time needed to make a drink. This has improved the speed of service provided by the baristas and it gave the barista time to interact with customers, offering a better overall customer service. As a result, Starbucks was able to generate a higher level of
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