Proposed Ecosystem Hub for Starbucks
Overview

Each day, technologists working at Starbucks, in collaboration with other stakeholders, work on innovations that could only be described as groundbreaking. This is the team responsible for the unique Starbucks experience. However, without this level of dedication and inventiveness, Starbucks technology-centeredness would not have been possible. Thanks to these efforts, Starbucks now boasts of superior customer connection with the enterprise and continues to further promote customer experience. In line with Starbuck’s digital business transformation strategy, there is need for the development of a robust and effective Ecosystem Hub solution comprising of the software tools listed below:

a) Asana (Collaboration Portal)

b) Dropbox (Enterprise Content Management)

c) Board (Platform combining business intelligence tools with predictive analytics, simulation, as well as corporate performance management capabilities)

d) Mailchimp (Digital Content Marketing Management)

In an attempt to underline its commitment to digital business transformation, the company continues to hire competent and talented staff in the areas of data science. Indeed, in keeping with its trend to promote solutions that are forward-thinking, Starbucks has in the past successfully pioneered “projects such as Mobile Order & Pay and [the] Starbucks Rewards™ loyalty program” (Starbucks, 2020). With the Mobile Order & Pay, for instance, it is possible for customers to make purchases without necessarily having to queue.

To a large extent, the present proposal to develop an Ecosystem Hub solution is essentially a continuation of the company’s forward-thinking resolve and decision to monetize its digital platform.

Starbucks Digital Business Transformation Strategy

According to Rahman (2020), Starbucks is a data tech company, and not a coffee business. While this statement could seem farfetched at first instance, the way the company has used its digital platform makes it what Rahman refers to as “a textbook example of how to strategically use data to stay competitive” (Rahman, 2020). It is important to note that in addition to offering for sale cold and hot drinks, Starbucks also engages in the collection and gathering of voluminous data sourced from its customer interactions. The company’s utilization of the said data would give us a sneak preview of its digital business transformation strategy. Towards this end, it would be prudent to assess the company’s utilization of technology and data analytics in the recent past to enhance its competitive advantage and fuel business development.

a) Customer Experience

To begin with, Starbucks’ competitive advantage is largely based on its exclusive and innovative reading (and subsequent utilization) of customer data. For instance, on the Starbucks Rewards and loyalty program, the total number of people signed up stands at approximately 14 million (Whitten, 2017). In 2017, for instance, Whitten (2017) points out that “rewards represented 36 percent of U.S. company-operated sales in the second quarter and mobile payment was 29 percent of transactions.” What this effectively means is that the company can be able to accurately chart customer orders and make the relevant offering adjustments. For instance, it as far as loyalty customers are concerned, it is easy to determine their most frequent orders. This enables the company to ensure that customers are sent offers that are relatively personalized so as to further enhance sales.

b) Alignment of Product Lines with Customer Preferences

Data analytics have also come in handy in the further enhancement of the company’s product line and menu optimization. Marr (2019) points out that data from various stores was instrumental in the company’s rollout of bottled beverages and k-cups. Additional customer market research played a supplementary role in this particular case. For instance, based on available data from its stores, the company was aware of the fact that most of those who took tea routinely avoided adding sugar into the same. Towards this end, the company deemed it necessary to introduce unsweetened tea k-cups. According to Marr (2019), the company also pioneered a move to utilize its digital menu boards in the strategic enhancement of the bottom-line. Essentially, this being yet another example of the targeted operationalization of data analytics, the company can in this case be able to adjust prices throughout the day in response to a wide range of factors – and thus stimulate demand.

c) Other Strategic Decisions

It is important to note that following the return of Howard Schultz in Starbucks as CEO in the year 2008, a decision was made to embrace an analytical approach in decisions relating to store locations. This was in response to the closure of numerous store locations as a consequence of dwindling sales. An enterprise by the name Esri, and specializing in location analytics, was roped into the plan (Thau, 2014). Thanks to this move, Starbucks was able to identify and set up stores in better locations. All this was made possible by the sound application of data on traffic patterns, income levels, as well as population density. This is yet another example of Starbuck’s utilization of data analytics as the secret ingredient to stir up or drive up sales.

Goals and Objectives

On the basis of the discussion above, it is clear that Starbucks is committed to the strategic use of data to further promote its competitiveness. For this purpose, the company has lots of data on which to rely upon. As a matter of fact, in the words of Rahman (2020), the company “has over 30,000 stores worldwide and completes close to 100 million transactions per week… this gives it a comprehensive view of what its customers consume and enjoy.” It therefore follows that this is something that the proposed Ecosystem Hub will be able to tap into in an attempt to drive sales and remain relevant in an increasingly...…overall idea, but also supportive of the entire implementation process.

c) Training

Most undertakings of this nature run into problems because of failure to provide effective training to users as well as all those who actively interact with the proposed solution. Hitt, Ireland, and Hoskisson (2014) are categorical that successful adoption of new systems begin with effective and well-designed training programs. Training ought to be designed in such a way that in addition to inseminating the essential skills, it also addresses (and displaces) misplaced concerns.

d) Pilot Operation

In basic terms, pilot operation has got to do with structured implementation of solutions. This is to say that the solution is operationalized in various segments first before rollout across the entire organization. To a large extent, this helps promote credibility (specifically among stakeholder with a high level of interest and great power) and brings down the level of risk. It therefore follows that following successful operationalization in other segments, we can talk of proof of concept in readiness for organizational rollout.

Balanced Scorecard Deployment

There is always need to keep track of how well the solution embraced is being executed. This is where a balanced scorecard will come in handy in as far as the description of the digital business transformation is concerned. The balanced scorecard could in this realm be conceptualized as performance management tool in the context of strategy operationalization. In the present scenario, therefore, it would be prudent to focus of a number of markers including, but not limited to; the strategic initiatives, and the performance measures as well as targets. In as far as strategic initiatives are concerned, of great relevance are the various drivers of results, i.e. action plans. On the other hand, performance targets as well as measures would come in handy in seeking to define the level at which the enterprise is performing. We could also go further and incorporate various strategic objectives as well as strategy maps into the balanced scorecard equation. These would ideally be the activities deemed to be the most important strategy components.

Ends

In reference to the company’s continued investment in digital innovation, Starbucks CEO has in the past categorically stated that “no traditional brick-and-mortar retailer is better positioned to navigate and flourish in the global retail industry of today or better positioned to lead in the digital retail world of tomorrow” (Marr, 2019). At present, the company is well-positioned to exploit available opportunities in its industry owing to its robust digital platform. In essence, it has mounds of data, a dedicated and skilled cast of employees, and worthy partners to put its strengths to good use. Available data in this case ought to be used to leverage the company’s position in the market via the further promotion of customer experiences so as to grow market…