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Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit Find text or tools Q | MODIFY PAGE С G D C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form + e. ΑΙ 922-0003-1 Using Deep Brew, Starbucks made its drive-thru experience attractive to its consumers during the pandemic. The AI engine made personalized recommendations on the screens at Starbucks drive-thru stores. According to Brian Ames, Lead Manager Data Science, Analytics Ops at Starbucks, every store in all markets where Starbucks had its presence had a distinctive personality, in addition to considering other factors such as day of the week, time of day, amount of traffic, temperature etc. The company also benefited in terms of effective inventory management, optimizing marketing material, and adjusting store assortment. All this helped the coffee giant in cutting costs and increasing sales. While Starbucks benefited in several ways from its digital initiatives, the company was also able to survive the challenges attributed to the Covid-19 pandemic due to its previous investments in digital technologies. For instance, even before the pandemic, around 80% of consumers at Starbucks used the app for grab and go' orders. The company's drive-thru and mobile-only stores were well-established and extending these formats to more locations during the pandemic was seamless for Starbucks. The coffee giant's pick-up only stores and curb side° stores also helped the company combat the challenges related to the pandemic since consumers who were hesitant to visit Starbucks stores out of fear of contracting the virus could order through their mobile phones and pay at and pickup their orders from these stores. LOOKING AHEAD In 2021, Starbucks stood as the second largest mobile payment player with its mobile payment app recording 31.2 million users after Apple Pay with 43.9 million (See Exhibit V for Mobile Payment Users in the US).* 43 Industry analysts commended Starbucks for its digital initiatives which helped the company increase its sales and operational efficiency while enhancing its customer service. They felt that the company's investments had helped it even survive through the pandemic. For the Q4 2021, drive-thru and mobile ordering accounted for 70% of transactions at Starbucks in the US. Some critics, however, pointed out that the company was facing challenges in its important market China as there were lockdowns in the country due to the new Covid-19 Delta variant. For the fourth quarter ended October 3, 2021, the coffee giant reported a 7% decline in same-store sales in China.45 The company was also facing competition from Luckin and Tim Hortons. The company planned to tackle these challenges by increasing its presence. By the end of 2021, Starbucks planned to open 600 stores in China.46 In addition to this, it was expanding its presence online by adding features such "taking-out for He/She" and "Coffee Social Circle" for sharing one's preference of beverages and ordering drinks as greetings on the company's Starbucks Now³ initiative on WeChat. These features were also made available on the Starbucks mobile app in China. Johnson was optimistic about the performance of Starbucks in China, the US, and other global markets. He pointed out that a 'rich pipeline of innovation' would further enhance the experience of the consumers in Starbucks which would eventually lead to productivity gains. The company was also planning to experiment with new digital capabilities which would increase its efficiency. For instance, Starbucks was working on coming out with Mastrena 2 espresso machines that would efficiently pull triple shots of espresso. Starbucks in association with San-Diego-based technology ° Starbucks offered curb-side stores at a few selected locations wherein customers could use the location technology in the app to check in at designated parking slots at Starbucks stores. The baristas then delivered their orders to their cars. P In 2017, Starbucks had rolled out Starbucks Now initiative on WeChat under which users could give Starbucks orders and gifts through the mobile app. q WeChat is a Chinese social media, instant messaging, and mobile payment app. Edit text, images, pages, and more. Free 7-day trial 12 1479 APR 4 2 20 Link More OTHER OPTIONS Redact a PDF Prepare a form Edit text, images, pages, and more. Free 7-day trial + Find text or tools Q 922-0003-1 e. ΑΙ company Aira Tech Corp, was also planning to create a service called Aira which would connect visually impaired customers with visual interpreters through a smartphone app so that they could navigate Starbuck stores easily.47 Johnson pointed out that by the middle of Q1 2020, Deep Brew would automate ordering for food and merchandise, taking inventory management off the daily task for its partners. The coffee giant was also working to see if AI could be used to launch a new initiative to introduce two-lane drive thru at some stores, according to Brewer. Going forward, the coffee giant aimed to use AI and IoT to decrease equipment downtime, remove friction, streamline production of drinks and food, and take care of repetitive tasks to free up its partners and give them more time to interact with the consumers. Johnson said Starbucks was exploring through blockchain or “other innovative technologies," whether it could "tokenize Stars." With this, other merchants could connect their loyalty programs to Starbucks' rewards program and users could exchange stars to pay for their purchases across brands. Commenting on the company's future plans, Johnson said, "We intend to be at the forefront of this disruptive innovation, which will unfold over the next few years. "48 Exhibit I: Schultz's Seven-point Transformation for Starbucks • Be the undisputed coffee authority Engage and inspire our partners • Ignite the emotional attachment with our customers • Expand our global presence while making each store the heart of a local neighbourhood Be a leader in ethical sourcing and environmental impact Creative innovation growth platforms worthy of our coffee Deliver a sustainable economic model Source: Julia Hanna, "Starbucks, Reinvented: A Seven-Year Study on Schultz, Strategy and Reinventing a Brilliant Brand," www.forbes.com, August 25, 2014. Starbucks Dunkin' Tim Hortons Exhibit II: Leading Coffee Chains in the US (2020) Company Caribou Coffee Coffee Bean and Tea Leaf Peet's Coffee Dutch Bros Coffee Biggby Coffee No. Of Outlets 15,228 8,830 715 464 282 423 369 235 120 110 Coffee Beanery Gloria Jean's Source: Robert M. Grant, "Contemporary Strategy Analysis," Wiley Publishers, 2019. 13 1479 APR 4 2 20 C) С

Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit Find text or tools Q | MODIFY PAGE С G D C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form + e. ΑΙ 922-0003-1 Using Deep Brew, Starbucks made its drive-thru experience attractive to its consumers during the pandemic. The AI engine made personalized recommendations on the screens at Starbucks drive-thru stores. According to Brian Ames, Lead Manager Data Science, Analytics Ops at Starbucks, every store in all markets where Starbucks had its presence had a distinctive personality, in addition to considering other factors such as day of the week, time of day, amount of traffic, temperature etc. The company also benefited in terms of effective inventory management, optimizing marketing material, and adjusting store assortment. All this helped the coffee giant in cutting costs and increasing sales. While Starbucks benefited in several ways from its digital initiatives, the company was also able to survive the challenges attributed to the Covid-19 pandemic due to its previous investments in digital technologies. For instance, even before the pandemic, around 80% of consumers at Starbucks used the app for grab and go' orders. The company's drive-thru and mobile-only stores were well-established and extending these formats to more locations during the pandemic was seamless for Starbucks. The coffee giant's pick-up only stores and curb side° stores also helped the company combat the challenges related to the pandemic since consumers who were hesitant to visit Starbucks stores out of fear of contracting the virus could order through their mobile phones and pay at and pickup their orders from these stores. LOOKING AHEAD In 2021, Starbucks stood as the second largest mobile payment player with its mobile payment app recording 31.2 million users after Apple Pay with 43.9 million (See Exhibit V for Mobile Payment Users in the US).* 43 Industry analysts commended Starbucks for its digital initiatives which helped the company increase its sales and operational efficiency while enhancing its customer service. They felt that the company's investments had helped it even survive through the pandemic. For the Q4 2021, drive-thru and mobile ordering accounted for 70% of transactions at Starbucks in the US. Some critics, however, pointed out that the company was facing challenges in its important market China as there were lockdowns in the country due to the new Covid-19 Delta variant. For the fourth quarter ended October 3, 2021, the coffee giant reported a 7% decline in same-store sales in China.45 The company was also facing competition from Luckin and Tim Hortons. The company planned to tackle these challenges by increasing its presence. By the end of 2021, Starbucks planned to open 600 stores in China.46 In addition to this, it was expanding its presence online by adding features such "taking-out for He/She" and "Coffee Social Circle" for sharing one's preference of beverages and ordering drinks as greetings on the company's Starbucks Now³ initiative on WeChat. These features were also made available on the Starbucks mobile app in China. Johnson was optimistic about the performance of Starbucks in China, the US, and other global markets. He pointed out that a 'rich pipeline of innovation' would further enhance the experience of the consumers in Starbucks which would eventually lead to productivity gains. The company was also planning to experiment with new digital capabilities which would increase its efficiency. For instance, Starbucks was working on coming out with Mastrena 2 espresso machines that would efficiently pull triple shots of espresso. Starbucks in association with San-Diego-based technology ° Starbucks offered curb-side stores at a few selected locations wherein customers could use the location technology in the app to check in at designated parking slots at Starbucks stores. The baristas then delivered their orders to their cars. P In 2017, Starbucks had rolled out Starbucks Now initiative on WeChat under which users could give Starbucks orders and gifts through the mobile app. q WeChat is a Chinese social media, instant messaging, and mobile payment app. Edit text, images, pages, and more. Free 7-day trial 12 1479 APR 4 2 20 Link More OTHER OPTIONS Redact a PDF Prepare a form Edit text, images, pages, and more. Free 7-day trial + Find text or tools Q 922-0003-1 e. ΑΙ company Aira Tech Corp, was also planning to create a service called Aira which would connect visually impaired customers with visual interpreters through a smartphone app so that they could navigate Starbuck stores easily.47 Johnson pointed out that by the middle of Q1 2020, Deep Brew would automate ordering for food and merchandise, taking inventory management off the daily task for its partners. The coffee giant was also working to see if AI could be used to launch a new initiative to introduce two-lane drive thru at some stores, according to Brewer. Going forward, the coffee giant aimed to use AI and IoT to decrease equipment downtime, remove friction, streamline production of drinks and food, and take care of repetitive tasks to free up its partners and give them more time to interact with the consumers. Johnson said Starbucks was exploring through blockchain or “other innovative technologies," whether it could "tokenize Stars." With this, other merchants could connect their loyalty programs to Starbucks' rewards program and users could exchange stars to pay for their purchases across brands. Commenting on the company's future plans, Johnson said, "We intend to be at the forefront of this disruptive innovation, which will unfold over the next few years. "48 Exhibit I: Schultz's Seven-point Transformation for Starbucks • Be the undisputed coffee authority Engage and inspire our partners • Ignite the emotional attachment with our customers • Expand our global presence while making each store the heart of a local neighbourhood Be a leader in ethical sourcing and environmental impact Creative innovation growth platforms worthy of our coffee Deliver a sustainable economic model Source: Julia Hanna, "Starbucks, Reinvented: A Seven-Year Study on Schultz, Strategy and Reinventing a Brilliant Brand," www.forbes.com, August 25, 2014. Starbucks Dunkin' Tim Hortons Exhibit II: Leading Coffee Chains in the US (2020) Company Caribou Coffee Coffee Bean and Tea Leaf Peet's Coffee Dutch Bros Coffee Biggby Coffee No. Of Outlets 15,228 8,830 715 464 282 423 369 235 120 110 Coffee Beanery Gloria Jean's Source: Robert M. Grant, "Contemporary Strategy Analysis," Wiley Publishers, 2019. 13 1479 APR 4 2 20 C) С

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Discuss how the digital initiatives enabled Starbucks to overcome the challenges posed by the COVID-19 pandemic and how its investments in digital marketing and digital technologies ensured its journey of continuous improvement

Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit Find text or tools Q | MODIFY PAGE С G D C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form + e. ΑΙ 922-0003-1 Using Deep Brew, Starbucks made its drive-thru experience attractive to its consumers during the pandemic. The AI engine made personalized recommendations on the screens at Starbucks drive-thru stores. According to Brian Ames, Lead Manager Data Science, Analytics Ops at Starbucks, every store in all markets where Starbucks had its presence had a distinctive personality, in addition to considering other factors such as day of the week, time of day, amount of traffic, temperature etc. The company also benefited in terms of effective inventory management, optimizing marketing material, and adjusting store assortment. All this helped the coffee giant in cutting costs and increasing sales. While Starbucks benefited in several ways from its digital initiatives, the company was also able to survive the challenges attributed to the Covid-19 pandemic due to its previous investments in digital technologies. For instance, even before the pandemic, around 80% of consumers at Starbucks used the app for grab and go' orders. The company's drive-thru and mobile-only stores were well-established and extending these formats to more locations during the pandemic was seamless for Starbucks. The coffee giant's pick-up only stores and curb side° stores also helped the company combat the challenges related to the pandemic since consumers who were hesitant to visit Starbucks stores out of fear of contracting the virus could order through their mobile phones and pay at and pickup their orders from these stores. LOOKING AHEAD In 2021, Starbucks stood as the second largest mobile payment player with its mobile payment app recording 31.2 million users after Apple Pay with 43.9 million (See Exhibit V for Mobile Payment Users in the US).* 43 Industry analysts commended Starbucks for its digital initiatives which helped the company increase its sales and operational efficiency while enhancing its customer service. They felt that the company's investments had helped it even survive through the pandemic. For the Q4 2021, drive-thru and mobile ordering accounted for 70% of transactions at Starbucks in the US. Some critics, however, pointed out that the company was facing challenges in its important market China as there were lockdowns in the country due to the new Covid-19 Delta variant. For the fourth quarter ended October 3, 2021, the coffee giant reported a 7% decline in same-store sales in China.45 The company was also facing competition from Luckin and Tim Hortons. The company planned to tackle these challenges by increasing its presence. By the end of 2021, Starbucks planned to open 600 stores in China.46 In addition to this, it was expanding its presence online by adding features such "taking-out for He/She" and "Coffee Social Circle" for sharing one's preference of beverages and ordering drinks as greetings on the company's Starbucks Now³ initiative on WeChat. These features were also made available on the Starbucks mobile app in China. Johnson was optimistic about the performance of Starbucks in China, the US, and other global markets. He pointed out that a 'rich pipeline of innovation' would further enhance the experience of the consumers in Starbucks which would eventually lead to productivity gains. The company was also planning to experiment with new digital capabilities which would increase its efficiency. For instance, Starbucks was working on coming out with Mastrena 2 espresso machines that would efficiently pull triple shots of espresso. Starbucks in association with San-Diego-based technology ° Starbucks offered curb-side stores at a few selected locations wherein customers could use the location technology in the app to check in at designated parking slots at Starbucks stores. The baristas then delivered their orders to their cars. P In 2017, Starbucks had rolled out Starbucks Now initiative on WeChat under which users could give Starbucks orders and gifts through the mobile app. q WeChat is a Chinese social media, instant messaging, and mobile payment app. Edit text, images, pages, and more. Free 7-day trial 12 1479 APR 4 2 20 <tv A X W & O Ο and Purchased for use on the Marketing for a Digital World, at University of the water (ITS). Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT). Canva NEW Sign in 品 12 17 C G □ 6 0 Q
Transcribed Image Text:Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit Find text or tools Q | MODIFY PAGE С G D C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form + e. ΑΙ 922-0003-1 Using Deep Brew, Starbucks made its drive-thru experience attractive to its consumers during the pandemic. The AI engine made personalized recommendations on the screens at Starbucks drive-thru stores. According to Brian Ames, Lead Manager Data Science, Analytics Ops at Starbucks, every store in all markets where Starbucks had its presence had a distinctive personality, in addition to considering other factors such as day of the week, time of day, amount of traffic, temperature etc. The company also benefited in terms of effective inventory management, optimizing marketing material, and adjusting store assortment. All this helped the coffee giant in cutting costs and increasing sales. While Starbucks benefited in several ways from its digital initiatives, the company was also able to survive the challenges attributed to the Covid-19 pandemic due to its previous investments in digital technologies. For instance, even before the pandemic, around 80% of consumers at Starbucks used the app for grab and go' orders. The company's drive-thru and mobile-only stores were well-established and extending these formats to more locations during the pandemic was seamless for Starbucks. The coffee giant's pick-up only stores and curb side° stores also helped the company combat the challenges related to the pandemic since consumers who were hesitant to visit Starbucks stores out of fear of contracting the virus could order through their mobile phones and pay at and pickup their orders from these stores. LOOKING AHEAD In 2021, Starbucks stood as the second largest mobile payment player with its mobile payment app recording 31.2 million users after Apple Pay with 43.9 million (See Exhibit V for Mobile Payment Users in the US).* 43 Industry analysts commended Starbucks for its digital initiatives which helped the company increase its sales and operational efficiency while enhancing its customer service. They felt that the company's investments had helped it even survive through the pandemic. For the Q4 2021, drive-thru and mobile ordering accounted for 70% of transactions at Starbucks in the US. Some critics, however, pointed out that the company was facing challenges in its important market China as there were lockdowns in the country due to the new Covid-19 Delta variant. For the fourth quarter ended October 3, 2021, the coffee giant reported a 7% decline in same-store sales in China.45 The company was also facing competition from Luckin and Tim Hortons. The company planned to tackle these challenges by increasing its presence. By the end of 2021, Starbucks planned to open 600 stores in China.46 In addition to this, it was expanding its presence online by adding features such "taking-out for He/She" and "Coffee Social Circle" for sharing one's preference of beverages and ordering drinks as greetings on the company's Starbucks Now³ initiative on WeChat. These features were also made available on the Starbucks mobile app in China. Johnson was optimistic about the performance of Starbucks in China, the US, and other global markets. He pointed out that a 'rich pipeline of innovation' would further enhance the experience of the consumers in Starbucks which would eventually lead to productivity gains. The company was also planning to experiment with new digital capabilities which would increase its efficiency. For instance, Starbucks was working on coming out with Mastrena 2 espresso machines that would efficiently pull triple shots of espresso. Starbucks in association with San-Diego-based technology ° Starbucks offered curb-side stores at a few selected locations wherein customers could use the location technology in the app to check in at designated parking slots at Starbucks stores. The baristas then delivered their orders to their cars. P In 2017, Starbucks had rolled out Starbucks Now initiative on WeChat under which users could give Starbucks orders and gifts through the mobile app. q WeChat is a Chinese social media, instant messaging, and mobile payment app. Edit text, images, pages, and more. Free 7-day trial 12 1479 APR 4 2 20 <tv A X W & O Ο and Purchased for use on the Marketing for a Digital World, at University of the water (ITS). Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT). Canva NEW Sign in 品 12 17 C G □ 6 0 Q
Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit MODIFY PAGE С I C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form Edit text, images, pages, and more. Free 7-day trial + Find text or tools Q 922-0003-1 e. ΑΙ company Aira Tech Corp, was also planning to create a service called Aira which would connect visually impaired customers with visual interpreters through a smartphone app so that they could navigate Starbuck stores easily.47 Johnson pointed out that by the middle of Q1 2020, Deep Brew would automate ordering for food and merchandise, taking inventory management off the daily task for its partners. The coffee giant was also working to see if AI could be used to launch a new initiative to introduce two-lane drive thru at some stores, according to Brewer. Going forward, the coffee giant aimed to use AI and IoT to decrease equipment downtime, remove friction, streamline production of drinks and food, and take care of repetitive tasks to free up its partners and give them more time to interact with the consumers. Johnson said Starbucks was exploring through blockchain or “other innovative technologies," whether it could "tokenize Stars." With this, other merchants could connect their loyalty programs to Starbucks' rewards program and users could exchange stars to pay for their purchases across brands. Commenting on the company's future plans, Johnson said, "We intend to be at the forefront of this disruptive innovation, which will unfold over the next few years. "48 Exhibit I: Schultz's Seven-point Transformation for Starbucks • Be the undisputed coffee authority Engage and inspire our partners • Ignite the emotional attachment with our customers • Expand our global presence while making each store the heart of a local neighbourhood Be a leader in ethical sourcing and environmental impact Creative innovation growth platforms worthy of our coffee Deliver a sustainable economic model Source: Julia Hanna, "Starbucks, Reinvented: A Seven-Year Study on Schultz, Strategy and Reinventing a Brilliant Brand," www.forbes.com, August 25, 2014. Starbucks Dunkin' Tim Hortons Exhibit II: Leading Coffee Chains in the US (2020) Company Caribou Coffee Coffee Bean and Tea Leaf Peet's Coffee Dutch Bros Coffee Biggby Coffee No. Of Outlets 15,228 8,830 715 464 282 423 369 235 120 110 Coffee Beanery Gloria Jean's Source: Robert M. Grant, "Contemporary Strategy Analysis," Wiley Publishers, 2019. 13 1479 APR 4 2 20 <tv A X W & O Ο and Purchased for use on the Marketing for a Digital World, at University of the water (ITS). Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT). Canva NEW Sign in 品 13 17 < > C) С
Transcribed Image Text:Starbucks Case Study (... X Starbucks Case Study.pdf (SEC... + Create All tools Edit Convert Sign Edit MODIFY PAGE С I C Organize pages ADD CONTENT T+ Text Image Header and footer Watermark > Link More OTHER OPTIONS Redact a PDF Prepare a form Edit text, images, pages, and more. Free 7-day trial + Find text or tools Q 922-0003-1 e. ΑΙ company Aira Tech Corp, was also planning to create a service called Aira which would connect visually impaired customers with visual interpreters through a smartphone app so that they could navigate Starbuck stores easily.47 Johnson pointed out that by the middle of Q1 2020, Deep Brew would automate ordering for food and merchandise, taking inventory management off the daily task for its partners. The coffee giant was also working to see if AI could be used to launch a new initiative to introduce two-lane drive thru at some stores, according to Brewer. Going forward, the coffee giant aimed to use AI and IoT to decrease equipment downtime, remove friction, streamline production of drinks and food, and take care of repetitive tasks to free up its partners and give them more time to interact with the consumers. Johnson said Starbucks was exploring through blockchain or “other innovative technologies," whether it could "tokenize Stars." With this, other merchants could connect their loyalty programs to Starbucks' rewards program and users could exchange stars to pay for their purchases across brands. Commenting on the company's future plans, Johnson said, "We intend to be at the forefront of this disruptive innovation, which will unfold over the next few years. "48 Exhibit I: Schultz's Seven-point Transformation for Starbucks • Be the undisputed coffee authority Engage and inspire our partners • Ignite the emotional attachment with our customers • Expand our global presence while making each store the heart of a local neighbourhood Be a leader in ethical sourcing and environmental impact Creative innovation growth platforms worthy of our coffee Deliver a sustainable economic model Source: Julia Hanna, "Starbucks, Reinvented: A Seven-Year Study on Schultz, Strategy and Reinventing a Brilliant Brand," www.forbes.com, August 25, 2014. Starbucks Dunkin' Tim Hortons Exhibit II: Leading Coffee Chains in the US (2020) Company Caribou Coffee Coffee Bean and Tea Leaf Peet's Coffee Dutch Bros Coffee Biggby Coffee No. Of Outlets 15,228 8,830 715 464 282 423 369 235 120 110 Coffee Beanery Gloria Jean's Source: Robert M. Grant, "Contemporary Strategy Analysis," Wiley Publishers, 2019. 13 1479 APR 4 2 20 <tv A X W & O Ο and Purchased for use on the Marketing for a Digital World, at University of the water (ITS). Usage permitted only within these parameters. This PDF may not be reproduced, stored in a retrieval system, or uploaded to any LLM (e.g. ChatGPT). Canva NEW Sign in 品 13 17 < > C) С
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