Digital Transformation Project: Starbucks de Meern
IT in the modern enterprise has evolved from a back-office component to a competitive advantage which can increase customer value and profit (Rotella, 2015). It is important that companies see and make use of this opportunity to improve their business activities. This report will research the current IT situation and analyze the possibilities to implement a disruptive or new innovation that fits with Starbucks de Meern’s business model.
Starbucks de Meern is part of Autogrill, that licenses Starbucks. It is located near the highway A12 at de Meern. Starbucks wants to make their coffee bars a so called “third place”. This third place can be defined as a convenient place to work and socialize next to the customer his home and work locations. In addition to this, Starbucks tries to offer the best quality coffee and a wide range of products. After analyzing the business model, four critical success factors were identified: high quality products, social responsibility, customer service and customer bonding. Since information technology can be described as a tool to support the business strategy, the preferred solution is derived according to the fit with these critical success factors.
There are four possibilities for Starbucks de Meern:
- Null option: In this case there will be no innovation.
- Mobile application: Starbucks de Meern only has a loyalty program in the form of a paper stamp-card. As this is a relative rudimentary savings program, Starbucks de Meern could choose to implement a digital personalized reward program for its customers.
- Advertising: Starbucks de Meern can make better use of their social media channels.
- Self-ordering: Self-ordering is a way to improve the efficiency within Starbucks de Meern.
The Mobile application is the preferred solution since it has a perfect fit with the critical success factors. The main advantages of a mobile application are, that it provides the customer with the customer service they need: order history and no physical cards. Most important, Starbucks de Meern could gain knowledge of the demand side, which gives the opportunity to achieve customer bonding via personalized services. Li et al. (2014) argue that it is key for a firm to get to know their demand side so that they can customize their product and service offering. Besides these advantages, this application could also be the first step to a next innovation, by integrating the mobile application with digital wallets.
Starbucks ‘my rewards’ program in the US actually increased sales by 11% and profit by 26%. Due to these results, sales are expected to grow by 10 percent for Starbucks de Meern (Cawley and Cawley, 2014). After three year, the ROI of this project will be positive.
Cawley, K., & Cawley, K. (2014). How a Loyalty Program can Boost Revenue. BrainSINS. Smart ECommerce. Retrieved 10 October 2015, from http://www.brainsins.com/en/blog/how-a-loyalty-program-can-boost-revenue/3460
Li, T., Kauffman, R.J., van Heck, E., Vervest, P., and Dellaert, B. 2014. Consumer Informedness and Firm Information Strategy. Information Systems Research 25(2) 345-363.
Perry Rotella, S. (2015). The role of IT in strengthening the modern corporate enterprise. Network World. Retrieved 3 October 2015, http://www.networkworld.com/article/2217585/tech-primers/the-role-of-it-in-strengthening-the-modern-corporate-enterprise.html