Big Data Analytics for Business in Starbucks

1.0 Introduction

In the past few years, the increase of Big Data Analytics forces the changes in business ineach
area of the world. Today, many organizations are collecting, storing, and analyzing massive
amounts of data. This data is commonly referred to as “big data” because of its volume, the
velocity with which it arrives, and the variety of forms it takes. 1 To increase the customer
numbers and the satisfaction of clients, Starbucks do many effort on their technology of big data
analytics.

1.1 Background information

Starbucks Corporation is company that is leading in the roasting, retailing and marketing of
specialty coffee in the world. It is an American multinational chain of coffeehouses and roastery
reserves headquartered in Seattle, Washington. As the world’s largest coffeehouse chain,
Starbucks is seen to be the main representation of the United States’ second wave of coffee
culture. As of early 2020, the company operates over 30,000 locations worldwide in more than
70 countries. Starbucks locations serve hot and cold drinks, whole-bean coffee, microground
instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas. 2Starbucks Coffee
joined Twitter in 2006, and at the time of our research, was the second most popular brand on
Twitter with 8.3 million followers. 3

2.0 Need

2.1. Business Need

1 Watson, H. J. (2014). Tutorial: Big Data Analytics: Concepts, Technologies, and Applications. Communications
of the Association for Information Systems, 34, pp-pp.
2
Starbucks company information https://www.starbucks.com/about-us/company-information
3
Shirdastian, H., Laroche, M., & Richard, M. (2019). Using big data analytics to study brand authenticity
sentiments:The case of Starbucks on Twitter. International Journal of Information Management, 48, 291–307.
Comments, rates, posts and review made by customers online can yield a massive amount of data
for companies access to enhance their products and service. Understanding how customers react
is an important issue for companies to make improvement. Therefore, Starbucks focus on several
changes that can boost their selling on big data analytics.

• Analyze customers behavior

• Menu design and optimization
• Personalized attention
• Predictive Analytics

2.2. Questions to answer

• Why are important to make changes with big data analytics?

There are growing interest in the market to study branding issues on social media. Besides, more
and more companies involve in the field of social media and spend lots of time and money on it
to advertise their products and popularity. In this era, the wildly used of social media is a useful
tool for Starbucks if they use it properly.

• What is the big data tool that Starbucks use?

Starbucks use Apache Hadoop as a tool that can process large amounts of data and has high
performance for large-scale data processing. It is a framework that can run on any existing data
center. It can also run on cloud infrastructure. 4

3.0 Challenges

3.1. Organizational Challenges and Technical Challenges

4
Apache Hadoop https://hadoop.apache.org/
 The data from Twitter that they collect are in a huge amount and messy. It is hard to organize
because the data contains many information such as customer information, locations and favors.
They need advanced skills to deal with the data. The technical challenges are also a problem for
Starbucks. For effective implementation of big data analytics project in Starbucks, it is necessary
to seek the help of the experts. Some of the vendors to work with in this project include those
supplying the software for Hadoop which can be difficult to apply.

3.2. Why is this a big data problem?

The database that Starbucks collect can seems as a big data problem because the database
conforms to the three Vs which are Volume, Velocity and Varity. The data collect from the
company is in a huge amount which approximately contain lots of information in every stores of
the company and the data accumulate every day so it is the Volume and Velocity. The Variety
part is that study collect data from various countries and regions which can be vary.

4.0 Stakeholders

There can be many benefits and information for both company and customers. Through big data
analysis, the company can retain customers and accurately point out customer needs. They
immediately established a solid customer base. The new big data process can observe consumer
patterns. Then they use these patterns to increase brand loyalty by collecting more data to
identify more trends and satisfy customers.5 In addition, key targeted sports companies can use
big data to provide tailored products to their target markets. No need to spend money on invalid
campaigns. Big data can help companies conduct sophisticated analysis of customer trends. This
analysis usually includes monitoring online purchases and observing point-of-sale transactions.

5
Reports on Data Analytics Findings from Concordia University Provide New Insights (Using Big Data Analytics
To Study Brand Authenticity Sentiments: the Case of Starbucks On Twitter). (2019). In Information Technology
Newsweekly (p. 641–). NewsRX LLC.
5.0 Requirements and resources needed

Until now, Starbucks collect data from the information of their customers such as the tastes and
what customers prefer. Therefore, the data to be collected includes information about customers.
This includes customer tastes and distribution around the world. After continuous growth,
Starbucks has used many methods to collect big data and established a database. Among them,
the data they collect includes information about customers, such as the tastes that customers like
and the distribution of locations. In addition, the second type of information is information about
locations and resources. These data can be more efficient operation of Starbucks. Financial
performance data is also very important. The company can obtain relevant information in the
financial statements of different branches. Therefore, the company needs to adopt the correct
record-keeping method to obtain all the information.

6.0 Results and Findings

Right now, hundreds of thousands of new data are generated and added to the accumulated data.
This immense amount of real-time and retrospective data has helped change previous paradigms,
and led to a new one: big data analytics. 6In short, Starbucks is a company with many years of
experience in the coffee business. The company has been selling products in stores around the
world. Starbucks owns data and information logs, and if properly organized, these logs can be
used for the benefit of the company. This data can be obtained from online data analysis, third-
party marketing and customer response. This data can be analyzed and used to develop new
products, which are not products already on the market. This can be achieved using Apache
Hadoop data analysis tools. On the other hand, hybrid management will be used to perform the
management process, which allows for sequential and iterative aspects of projects. At present,
predictive marketing is obviously a very important thing, and its benefits are obvious. Research
firm Aberdeen found that companies that meet customer needs and needs through predictive
analysis have natural revenues that grew 21% year-on-year, compared to the industry average of

6
Shirdastian, H., Laroche, M., & Richard, M. (2019). Using big data analytics to study brand authenticity
sentiments: The case of Starbucks on Twitter. International Journal of Information Management, 48, 291–307.
12%. We are looking for the perfect storm of technical and cultural factors that will drive data
scientists to declare with greater confidence that they know what we are going to do and why.

7.0 Critique

Starbucks have done many upgrades on their business of big data analytics. However, there still
have some deficiency on the big data analytics business. Nowadays, there are more and more
similar companies that are doing well on this area. They also have an improvement on the
technology using bid data analytics. It is the challenges for Starbucks make innovation on their
use of data to make a new upgrade base on their database.
Reference
[1] Watson, H. J. (2014). Tutorial: Big Data Analytics: Concepts, Technologies, and Applications. Communications
of the Association for Information Systems, 34, pp-pp.

[2] Starbucks company information https://www.starbucks.com/about-us/company-information

[3] Shirdastian, H., Laroche, M., & Richard, M. (2019). Using big data analytics to study brand authenticity
sentiments:The case of Starbucks on Twitter. International Journal of Information Management, 48, 291–307.

[4] Reports on Data Analytics Findings from Concordia University Provide New Insights (Using Big Data Analytics
To Study Brand Authenticity Sentiments: the Case of Starbucks On Twitter). (2019). In Information Technology
Newsweekly (p. 641–). NewsRX LLC.