Starbucks Corporation (Starbucks) is an American coffee company and coffeehouse chain founded in 1971 in Seattle, Washington. The company’s core business is roasting, marketing, and selling premium coffee beans and beverages. Starbucks is the world’s largest coffeehouse chain operating in over 64 countries worldwide, where it has over 32,900 brick-and-mortar stores. The company has also diversified its portfolio by adding products such as loose-leaf premium tea, fresh juice, energy drinks, and mineral water.
Decision Support System
Management Information System (MIS) is an integrated set of data collecting, storing, and analyzing components that support routine company operations. MIS provides management with a comprehensive overview of relevant information critical in the decision-making process. The company utilizes a decision support system. A decision support system (DSS) is a program that analyses and organizes data for more straightforward decision-making strategies. Starbucks has implemented a singular DSS known as Oracle. Oracle is mainly used by the parent company headquartered in the U.S as it has a monopoly on product decisions. Oracle generates monthly reports, such as sales figures and projected revenues, that serve as the basis for management decisions (Clements, 2019). Through Oracle, the company has developed a point-of-sale system. The point of sale is used for daily transactions, inventory control, and cash management, allowing Starbucks to oversee each retail store and base their decisions on inventory and customers. Additionally, the Oracle Exadata platform runs the Online Analytical Processing (OLAP) that connects all servers and warehouses, thus serving the purpose of a large-scale data processing and statistical analysis tool.
Social Media and Customer Relationship Management
Customer relationship management (CRM) is a system that manages a company’s interactions with customers and prospects. The objective of CSM is the improvement of business relationships between the company and its customers. CRM systems collects data across different contact points between the customer and the company, such as social networks. Starbucks engages customers directly through social media platforms such as Twitter and Facebook. Starbucks has established its presence in social media, as shown by its massive fan base boasting 67 million users across all platforms. Starbuck’s brand voice denotes a personal relationship with its consumers as the company posts both promotional and interactive materials on all social platforms. Starbucks also uses CRM tools to determine the level of engagement on social media platforms, addressing complaints, providing customer feedback, and crisis mitigation.
Business Intelligence and Analytics
Starbucks uses business intelligence and analytics to direct sales, marketing, and business decisions. Starbucks mainly obtains data from its mobile app, where most daily transactions take place. By getting insight into customer preferences and buying patterns, Starbucks can personalize promotions, update menus and determine store location. The data analyzed from the point of sale reveals most customers’ coffee buying habits; thus, Starbucks suggests new products based on the information. The company also updates its menu based on customers, location, and time such as offering special limited menus based on what’s happening. Business analytics also determine the location of new Starbucks stores by analyzing the traffic patterns, demographics, and proximity to other stores (Glowik, 2017). It uses this information to predict aspects of economic performance on the recommended store location.
Conclusion
Starbucks has been facing increased competition from established firms such as M Donald and Dunkin in the recent past. To maintain its dominance, Starbucks should capitalize on emerging markets by exploiting the changing customer preferences and changing its expansion strategy. The company should be flexible regarding its products by adapting to changing consumer tastes and preferences to gain footholds in emerging markets such as China. Additionally, the company should adopt a franchise model in its expansion as it leads to higher margins and low risks, especially in new markets.
