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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.

References

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

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Hacking a bank: ‘Low risks, high returns’

Banks use information systems to keep record of all the transactions that happen. This system is created by humans. Does this mean it is possible to hack it? And I am not talking about the ‘simple’ hacking. Like phishing, where the perpetrator sends out legitimate-looking email in an attempt to gather personal and financial information from recipients. I am talking about the real deal: getting into the system of a bank.

This year, hackers stole 650 million pounds of 100 financial institutions. The hackers infected the internal systems of several banks with malware, which enabled the hackers to see video feeds from supposed secure offices. After they discovered the banks cash handling routines, they transferred millions of pounds into dummy accounts, which were created by electronically pretending to be a bank employee (Telegraph, 2015). This hack is known as the biggest bank raid in history.

A few years earlier, in 2013, hackers broke into the system of two banks and increased the credit card limits of customer. They made copies of the physical credit cards, which they used to get money out of ATMs. In a few hours 45.000 withdrawals from ATMs were made by accomplices. The total estimated damage is 34,3 million euro. Some of the accomplices were caught, but the hackers are still as free as a bird (NU.nl, 2013).

I bet there are hackers active right now in internal systems of the banks. These hackers are not found yet, or will never be found. The hackers who stole 650 million pounds made the mistake to let a cash machine spit out money at random times. If this mistake was not made, the chance that they were discovered would be very small. After the cash machines spitted out money, the bank informed Kaspersky Lab, a Russian cybersecurity firm. They found out about the hack and made the following statement: ‘The plot marks the beginning of a new stage in the evolution of cybercriminal activity, where malicious users steal money directly from banks, and avoid targeting end users’ (Telegraph, 2015).

Being a cybercriminal is a very lucrative business. The chance of being caught is low and the returns are high. None of the hackers got caught, only some of the helpers. So is it possible to hack a bank? Yes, and as long as they do not detect you, it never happened.

Reference

Telegraph (2015) ‘Hackers steal 650 million in worlds biggest bank raid’ http://www.telegraph.co.uk/news/uknews/crime/11414191/Hackers-steal-650-million-in-worlds-biggest-bank-raid.html, 9 October 2015

NU.nl (2013) ‘Hackers stelen in uren 34,3 miljoen euro bij banken’ http://www.nu.nl/internet/3418844/hackers-stelen-in-uren-343-miljoen-euro-bij-banken.html, 9 October 2015

How to buy the cheapest airplane ticket

Introduction

The most flexible prices in the world are the ones of airline companies. At one moment the price is €90 and a few minutes later the price is €100. In this article I will try to unravel a part of the pricing algorithm of Airliners. From now on, you know how you can find the cheapest ticket, or at least as cheap as possible.

‘Airline pricing is a combination of art and science’ a spokesman of Kayak once said. The goal for the airliner is simple: make as much money as possible on each seat and make sure that no plane leaves with an empty seat. Of course this is not possible, but Ryanair is making a good effort. This summer Ryanair managed to break a record, it had an occupancy rate of 95%, while KLM had an occupancy rate of just 90,1% (Standaard, 2015) (Telegraaf, 2015). So how can airliners make as much money as possible from every seat? And how can you use this knowledge againt them?

Seat availability

Most people think that booking as early as possible is the key for the cheapest air plane ticket. In some way this makes sense. People who book in advance are mostly leisure travellers, and people who book only a few days before the flight are mostly business travellers. They probably have to go to an important business meeting and would like to pay a lot to get on the plane. In contrast to this assumption, research has shown that the best moment to buy your ticket on average (just) 45 days before departure. But keep in mind that this is an average, and it really depends on your destination. For instance, this rule also does not apply in the summertime. During the summer it would be better to buy your ticket about 100 days before departure. One thing is certain, last minute deals do not exist anymore. Booking a ticket one or two day before departure will probably be the highest price the airliner would dare to ask (CheapAir, 2014).

You

Are you a Mac user? It might be handy to buy your airplane ticket on a Windows next time. As been told during the lecture, Orbitz got sued because they asked higher prices when a Mac computer is used, than when a Windows computer is used. Although this is in the hotel industry, I dare to guess that this trick is also used in the airline industry (Dignan, 2012).

The cheapest ticket I ever bought was €12,50, a ticket from Manchester to Dublin. The transfer price to the city center of Dublin was even more expensive. But I did not get this price without a fight. I was browsing through different booking sites and eventually I found a ticket for €12,50. When I later came back for the same ticket the price was raised to €13,50. I, as a true Dutchman, was of course not planning to pay this stunning €1 extra. I deleted my cookies and the price was back to €12,50 again. When you are booking, always keep in mind that the airliners use cookies. Some websites even keep track of your IP adres, which means that you have to use another router to get the original price. Moral of the story: Big airliner is watching you.

Competition

One of the first things you learn during your business course is that the price declines when there are more competitors. Every year the average ticket prices decline with 2-3%, and it is estimated that this price trend is not going to change in the upcoming years (Eldering, 2015). So do you want to go on a cheap vacation? Look for destinations with a lot of (low-budget) airliners, the pricing algorithm of an airline always looks to the price of competitors.

Right place, right time

With Ryanair you fly from the middle of nowhere to the middle of nowhere. Flying to less popular destinations (like London Stansted instead of London City Airport) keeps the prices of budget airliners low. For the airline it is also cheaper to buy departure times in the morning, which has an effect on the ticket price. Being an early-bird can save you a lot of money!

Conclusion

Now you have an idea of how airliners determine their prices. Although there is no golden rule for getting the cheapest price, it turns out it is better to book really early, than booking really late.

References

Cheapair (2014) ‘When should you buy your airline ticket’ https://www.cheapair.com/blog/travel-tips/when-should-you-buy-your-airline-ticket-heres-what-our-data-has-to-say/, 2 october 2015

Dignan, L. (2012) ‘Mac users just love to pay more says Orbitz’ http://www.zdnet.com/article/mac-users-just-love-to-pay-more-says-orbitz/, 2 october 2015

Eldering, P. (2015) ‘Vliegtickets wordt goedkoper’ http://www.telegraaf.nl/reiskrant/24481967/___Vliegticket_wordt_goedkoper___.html, 2 october 2015

Standaard (2015) ‘Ryainair verbaast zichzelf met nieuwe records’ http://www.standaard.be/cnt/dmf20150909_01858508, 2 october 2015

Telegraaf (2015) ‘Stijging aantal passagiers Air France KLM’ http://www.telegraaf.nl/dft/bedrijven/airfrance-klm/24471550/__Stijging_aantal_passagiers_Air_France_KLM__.html, 2 october 2015