Some of the decisions making of Starbucks is to outline its goods and services, and strategy where they should locate it. The types of information systems used in Starbucks are:
• Transaction Processing system- (TPS) collects transactions that are done by the business. IBM TPS is used in every order of Starbucks.
• Starbucks uses Transaction Processing System (TPS) to collect, modify, retrieve, and store all transactions data. TPS brings the data into the Starbucks databases using electronic data interchange (EDI). EDI replaces paper documents with transaction data sent by telecommunication networks and provides communication from one computer to another without repeated data entry.
• Supply Chain Management System-(SCM) has to do with the activities that are being covered under distribution.
• The supply chain management system at Starbucks uses HighJump Software Supply Chain Execution (SCE) solution system to automate Starbucks product distribution networks. The system improves the reporting system which enhances the production process.
• Decision Support System (DSS) – DSS gives management data about sales figures between time periods, projected revenue, and possible outcomes of different decision alternatives.
• A singular DSS system called Oracle is used by the parent company. Online Analytical Processing (OLAP), which runs on the Oracle Exadata platform connecting all servers and storage, is used to do large-scale data and statistical analysis used during decision making.
• Intelligent Restaurant Information System (IRIS) – It is made up of the sales management system (POS), which is a register with additional functions such as inventory control and cash management that only managers can access, and the Manager Work Station (MWS), which is a computer system that compiles and makes reports of all store information to manage the whole store business for each physical store.
• Point-of-Sale system (POS) – POS is a combination of software and hardware used for transactions and day-to-day operations, with additional functions such as inventory control and cash management that only managers can access.
• The POS records all customer transactions in each store; the functions relate to customer service, sales, refunds, voids and discounts. An example of one POS Starbucks uses is in the Drive-thru; there are two POS monitors in which one inputs the customer’s order and the other takes the transaction. Also, has data on time of customer transactions, the quantity of food and drinks sold, and quantity of wasted and leftover inventory.
• Manager Work Station (MWS) – MWS stores the data from the POS systems, analyzes it, and produces useful reports, charts, graphs, and diagrams. The MWS can be accessed through Starbucks’s intranet and it has different security levels for different level of employees.
• The MWS is used by employees to punch in and out of work, by shift managers to access cash management function, by store managers to track sales by product, wasted products, see when customers come to the store most and to plan short term budgets
• IRIS is also used for electronic ordering of food, stationery, and packaging. Also, it helps managers identify customer needs through accurate reports, helps with implementing sales by demand and marketing strategies, and helps with making production plans based on actual demand.
Starbucks uses various social media services to constantly openly communicate with their customers and keep them informed about what Starbucks is doing. Starbucks also uses these services to hear their customers’ responses and ideas and show them Starbucks cares about their opinion. Therefore, Starbucks has established a strong feedback network. Whenever Starbucks adds and makes changes to their information system infrastructure and inform their customers about it, they get valuable feedback, from their strong feedback network, and improve their infrastructure. They also hear ideas from their customers. They provide free Wi-Fi at all their stores after their customers provided this idea.
Customer Relationship Management (CRM) and Use of Internet
Every day, technology is growing at a rapid pace and continues to evolve. Starbucks have managed to improve the customer experience and customer satisfaction by providing free Wi-Fi to everyone. This company has also conducted various ways to attract customers, put their brand out there, gain customer loyalty, add to their customer database, and maintain a positive relationship with their customers. Starbucks uses customer management system through social media, and Starbucks Reward system and mobile order and pay app. They regularly maintain and upgrade customer data.
The social media services listed below are a part of Starbucks customer relationship management (CRM).
• Twitter – MBS Framework that allows Starbucks to reach out to customers via micro post. Starbucks uses tweets to provide knowledge to customers and as a promotion tool. In return, Starbucks gets relevant knowledge from customers who express their expectations about the organization.
• Facebook – SNS framework that promotes interconnectivity between Starbucks and customers through conversations. Starbucks provides large amount of information about its products, organization culture and locations to keep them updated about any changes. Starbucks also directly asks its customers about their opinions, preferences and feedback.
• Foursquare – LMS framework that helps Starbucks manage location-specific customer knowledge using geo-tagging. Starbucks provides customers of day-to-day events such as new product launches specific to a location. With Foursquare platform, Starbucks can understand their customers’ location preferences
• MyStarbucksIdea.com – CDS framework that allows Starbucks to provide knowledge for customers by notifying them of content related to current products, as well as about customers’ ideas that are being reviewed, coming soon, and launched. This encourages loyalty from customers who feel that Starbucks cares about their ideas. Starbucks’s idea to provide free Wi-Fi at all its stores came from MyStarbucksIdea platform.
In addition to their advertisements, Starbucks has managed to come up with promotions and different strategies to maintain their customer loyalty.
Starbucks Reward System and Mobile Order and Pay App
Starbucks has a loyalty program, a part of Starbucks CRM, where a customer gets “stars” for each purchase they make or when they use services from tech companies partnered with Starbucks, such as Spotify. When a certain number of stars are accumulated, customers get many benefits. Benefits they are eligible for are birthday rewards, free Apple iTunes download, free drinks and food, free refills and drink upgrades, and promotional pricing.
The rewards system is available on a mobile application and a physical card. To get the benefits using a card, they must use it when paying for their order. Mobile Order and Pay, another part of Starbucks CRM, is a smartphone-based application, available for Android, iPhone, and Blackberry, that lets customers order in advance via the app and pay using the app when picking up the order. The app shifts the reward system from card-based onto a digital platform. Benefits of the mobile app is reduction of order taking time and processing payments, decreased customer wait times, and better utilization of an employee’s time. When customers load money onto the app, Starbucks is able to secure future sales as well as make sure money is spent on them, not their competitors.
The point-of-sale system (POC) detects the proximity of a customer’s smartphone and gives a barista the customer’s preferred order. Through the rewards program and mobile application, Starbucks amasses huge amount of data on customers like their beverage preferences, frequency of visits, locations they have visited, what time they have visited and so on. In exchange for providing a personalized customer experience, Starbucks receives loyalty and positive feedback from its customers. Improvements of its products and customer experience leads to increased sales from existing and new customers. More people will sign up for the rewards and mobile app, which in return increases Starbucks’s database allowing them to have effective targeted marketing and more improvements to the organization.
The way coffee is brewed is also changing due to technological advancement. Starbucks purchased Coffee Equipment Co., a small company known for its single serving coffee maker called “Clover”. The Clover brews coffee to an ideal temperature and produces an ideal flavour using precision technology. It also controls flow of brewing water. The Clover is connected, via Ethernet port, to the cloud to record machine performance and to track customer preferences. The cloud-based services the Clover data is on is called CloverNet. Mastrena is the machine used for making espressos.
Starbucks utilizes Atlas, a mapping and business intelligence tool created by Integral GIS and Ersi, to determine new store locations. The tool takes traffic pattern, population density, demographics, and proximity to other Starbucks stores into consideration to decide potential locations for new services. The tool can also predict what would happen to close by Starbucks stores if a new store were to open.
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