Case study 4: Technology Helps

Starbucks Find New Ways to

Compete
1. Analyze Starbucks using the
competitive forces and value
chain models.
Starbucks uses a product
differentiation strategy to set
itself apart from others by
offering
a unique experience of high-
end specialty coffees and
beverages, friendly and
knowledgeable servers, and
customer-friendly coffee shops.
It uses its information systems
and Wi-Fi networks to enable it
to offer new services to
customers like the smartphone
apps that allow customers to
pay with their phones. The
card is coupled with the
Starbucks Card system which
allows regular customers to
pay
with a pre-paid and
rechargeable card. Customers
like paying with the app saying
that it’s
much faster.
The company has made a
concerted effort to become
more efficient, reduce waste,
and
use the time saved to provide
better customer service. It
improved the way baristas make
and serve coffee. The company
can make more drinks with the
same number of workers
or with fewer workers. Baristas
can also use the extra time to
interact with customers.
It has enhanced it core
competencies and strategic
competitiveness by offering free
Wi-Fi
services to customers. It’s also
used that same network to
improve the way its managers
oversee their stores.
2. What is Starbucks’ business
strategy? Assess the role
played by technology in this
business strategy.
Starbucks business strategy is
product differentiation. It
offers a unique experience of
high-end specialty coffees and
beverages, friendly and
knowledgeable servers, and
customer-friendly coffee
shops. The company
revamped its in-store
technology and
sought to integrate its business
processes with wireless
technology and the mobile
digital
platform. Its strategy
emphasizes the high quality
of its beverages and efficient
and
helpful customer service.
Technology gives the
company the edge by
allowing it to offer customers
free Wi-Fi
service in all its stores. That
keeps customers in the store,
hopefully purchasing additional
products.
3. How much has technology
helped Starbucks compete?
Explain your answer.
Starbucks launched what it
calls the “Starbucks Digital
Network,” a portal designed
specifically for mobile
devices as opposed to
traditional Web browsers. The
site is
optimized for all major
smartphone operating systems
and responds to the multi-
touch
capability of devices like the
iPad.
The site functions as a
content portal where
customers can receive free
Wall Street
Journal access, select free
iTunes downloads, and other
content. The site is integrated
with Foursquare giving users
the ability to check in and
receive award points using
Starbucks site.
Case study 4: Technology Helps
Starbucks Find New Ways to
Compete
1. Analyze Starbucks using the
competitive forces and value
chain models.
Starbucks uses a product
differentiation strategy to set
itself apart from others by
offering
a unique experience of high-
end specialty coffees and
beverages, friendly and
knowledgeable servers, and
customer-friendly coffee shops.
It uses its information systems
and Wi-Fi networks to enable it
to offer new services to
customers like the smartphone
apps that allow customers to
pay with their phones. The
card is coupled with the
Starbucks Card system which
allows regular customers to
pay
with a pre-paid and
rechargeable card. Customers
like paying with the app saying
that it’s
much faster.
The company has made a
concerted effort to become
more efficient, reduce waste,
and
use the time saved to provide
better customer service. It
improved the way baristas make
and serve coffee. The company
can make more drinks with the
same number of workers
or with fewer workers. Baristas
can also use the extra time to
interact with customers.
It has enhanced it core
competencies and strategic
competitiveness by offering free
Wi-Fi
services to customers. It’s also
used that same network to
improve the way its managers
oversee their stores.
2. What is Starbucks’ business
strategy? Assess the role
played by technology in this
business strategy.
Starbucks business strategy is
product differentiation. It
offers a unique experience of
high-end specialty coffees and
beverages, friendly and
knowledgeable servers, and
customer-friendly coffee
shops. The company
revamped its in-store
technology and
sought to integrate its business
processes with wireless
technology and the mobile
digital
platform. Its strategy
emphasizes the high quality
of its beverages and efficient
and
helpful customer service.
Technology gives the
company the edge by
allowing it to offer customers
free Wi-Fi
service in all its stores. That
keeps customers in the store,
hopefully purchasing additional
products.
3. How much has technology
helped Starbucks compete?
Explain your answer.
Starbucks launched what it
calls the “Starbucks Digital
Network,” a portal designed
specifically for mobile
devices as opposed to
traditional Web browsers. The
site is
optimized for all major
smartphone operating systems
and responds to the multi-
touch
capability of devices like the
iPad.
The site functions as a
content portal where
customers can receive free
Wall Street
Journal access, select free
iTunes downloads, and other
content. The site is integrated
with Foursquare giving users
the ability to check in and
receive award points using
Starbucks site.
Case study 4: Technology Helps Starbucks Find New Ways to Compete

1. Analyze Starbucks using the competitive forces and value chain models.
 Starbucks uses a product differentiation strategy to set itself apart from others by offering a unique
experience of high-end specialty coffees and beverages, friendly and knowledgeable servers,
and customer-friendly coffee shops. It uses its information systems and Wi-Fi networks to enable it
to offer new services to customers like the smartphone apps that allow customers to pay with their
phones. The card is coupled with the Starbucks Card system which allows regular customers to pay
with a pre-paid and rechargeable card. Customers like paying with the app saying that it’s much
faster. The company has made a concerted effort to become more efficient, reduce waste, and use
the time saved to provide better customer service. It improved the way baristas make and serve
coffee. The company can make more drinks with the same number of workers or with fewer
workers. Baristas can also use the extra time to interact with customers.
It has enhanced it core competencies and strategic competitiveness by offering free Wi-Fi services
to customers. It’s also used that same network to improve the way its managers oversee their
stores.

2. What is Starbucks’ business strategy? Assess the role played by technology in this business strategy.
Starbucks business strategy is product differentiation. It offers a unique experience of high-end
specialty coffees and beverages, friendly and knowledgeable servers, and customer-friendly coffee
shops. The company revamped its in-store technology and sought to integrate its business processes
with wireless technology and the mobile digital platform. Its strategy emphasizes the high quality of
its beverages and efficient and helpful customer service. Technology gives the company the edge
by allowing it to offer customers free Wi-Fi service in all its stores. That keeps customers in the store,
hopefully purchasing additional products.

3. How much has technology helped Starbucks compete? Explain your answer. Starbucks launched
what it calls the “Starbucks Digital Network,” a portal designed specifically for mobile devices as
opposed to traditional Web browsers. The site is optimized for all major smartphone operating
systems and responds to the multi-touch capability of devices like the iPad. The site functions as a
content portal where customers can receive free Wall Street Journal access, select free iTunes
downloads, and other content. The site is integrated with Foursquare giving users the ability to
check in and receive award points using Starbucks site.

The site is free of advertising; Starbucks hopes that deals with content providers will make it a
profitable venture. The site is an effective way for Starbucks to improve its relationship with its
most valuable customers and a creative use of the mobile digital platform that enhances customer
satisfaction. District managers also use the in-store wireless networks to run store operations and
to connect to the company’s private corporate network and systems. Before, managers had to visit each
store, review its operations, develop a list of items on which to follow up, and then drive to a regional
office to file reports and send email. Now, managers can do most of their work sitting at a table in one of
the stores they oversee. Implementing Wi-Fi technology enabled Starbucks to increase the in-store
presence of district managers by 25 percent without adding any extra managers.