Chapter 2: Achieving Competitive Advantage with Information Systems

STARBUCKS

1) Analyse starbucks using the competitive forces and value chain models.
 

Starbucks is world’s largest coffee retailer, specially whole bean coffees.

Competitive force

Competitors

• McDonald, Dunkin’ Donuts. 

           -Selling similar products, cheaper.

Substitutes

• Tea, soft drinks, juices.

Suppliers

• Coffee beans ( choose suppliers based on quality, environmental and   economic issues).
• Coffee beans can be produced only in certain geographical areas ( tropical highlands of the western Hemisphere-Brazil).

New market entrants

• Compete with Starbucks is low, because market is highly saturated and substantial amount of financial resources associated with buildings and properties are required in order to enter into the industry.

Customers

• Large variety of products.
• Coffee lovers, coffee drinkers.

Value chain models

Primary activity

Operation

• in-store wireless network to run store operation and to connect to the       company’s private corporate network systems

Sales and marketing

• Starbucks card system.
• Advertising through social media.

Support activities

Human resources

• Workforce planning system
• Reduce amount of time each employee spends marking a drink.

2) What is starbucks business strategy?  What assess the role played by technology in this business strategy?

Business strategy

• Product differentiation strategy.
• High quality of products.
• Helpful customer service.
• Premium price.
• Customer friendly baristas.
• In-store technology ( 4 store designs ).
• Free Wi-Fi wireless network.

Role of technology

• In-store technology help to improving in-the store experience.
• Free Wi-Fi wireless network attract more customers, customer who use “Starbucks Digital Network” portal will receive free Wall Street Journal access, select free iTunes downloads and variety of other content.
• Customer service will improve relationship with customers.
• Smartphone app make customers to pay money in easy method.
• Smartphone app integrated with the Starbucks Card System which allows customers to pay with a pre-paid and rechargeable card.
• All the app and Starbucks site is available for all major smartphones operating systems.

3) How much has technology helped starbucks compete?

 

Technology helped compete

In-store technology

• 4 store designs

• One for each of four stages of coffee marking

           -Growing
           -Roasting
           -Brewing
           -Aroma

• Each store with its colour, combinations, lighting scheme

           -Consumer visit to its cafes being an experience

• Mobile applications

           -Can use phone to pay for your purchases at Starbucks. It’s fast, and convent.

• Wi-Fi ( free )

           -Help keep customers connected

• Starbucks Digital Network

           -We’re bringing the most interesting stuff on the web right to your comfy chair

• In-store displays

           -Monitor featuring music playing in store visuals of  “drink of the month”.