Steep Analysis Conduct Technology Trends T Part

Steep analysis Conduct "Technology trends" "T" part a STEEP Analysis (bullet point - a comment supported APA / MLA In-Text citations valid- referenced sources, addresses pros & cons Technology trends.

Starbucks: Innovation and enterprise in the world of coffee

Why the company was chosen

Starbucks began as a largely free-standing empire of stores. The original concept of the corporation's coffeehouse model was to replicate the 'home away from home' feeing in the store's flagship Seattle location at every Starbucks. The franchises were initially conceptualized as urban gathering-places. "For each targeted region, Starbucks selected a large city to serve as a 'hub'; teams of professionals were located in hub cities to support the goal of opening 20 or more stores in the hub in the first two years. Once stores blanketed the hub, then additional stores were opened in smaller, surrounding 'spoke' areas in the region" ("Starbucks Case Study," McGraw Hill, 1997). The store's urban cache would generate buzz, and gradually encourage suburban consumers in the 'spoke' areas to patronize Starbucks when they moved to their area.

Starbucks saturates its locations, with every Starbucks adopting a slightly different character to suit the needs of different population groups. Sometimes one Starbucks is only blocks away from another. Eventually, this super-saturation drove Starbucks into strip malls, as well as free-standing stores. Starbucks "cluster-bombs neighborhoods, adding ever more stores to compete against each other and drive off the competition" (Anderson 2007). Every Starbucks, whether present in a shopping mall, strip mall, or free-standing may be in competition with nearby Starbucks, but from the company's perspective, all is well, because all patrons seeking coffee are drinking Starbucks, rather than a competitor's brand ("Starbucks Case Study," McGraw Hill, 1997). However, retaining its image of iconic quality and iconoclastic Seattle attitude has been difficult, as franchises grow more pervasive in suburbia and malls. CEO "Schultz sent out a well-publicized e-mail suggesting that Starbucks' retail culture had perhaps swung too far commercially, and the stamped-out franchises 'no longer have the soul of the past and reflect a chain of stores vs. The warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter....'" Schultz wrote (Anderson 2007). The aim for Starbucks is that every store is slightly different, to suit the specific needs of the individual coffee demographic it is trying to attract within its narrow radius.

Steep analysis: Technology -- Cashless payment

Starbucks as a company is a purveyor of a relatively 'old' beverage -- that of coffee. However, it has proven to be on the cutting edge of branding and marketing. For example, for its business clientele, "the coffee company is adding cashless payment terminals from USA Technologies (USAT) to its branded, single-cup coffee-brewing machines designed for use in business offices" ("Starbucks brews up coffee with contactless payment method," RFD Journal, 2009). Customers simply swipe a card as payment, charging the coffee to their account.

For all of its patrons, Starbucks offers a mobile app, which allows customers to learn about the coffee and food (including nutrition), find a store, and even to pay via mobile phone technology. If someone is lost in a new area, he or she can easily find the comfort of a Starbucks franchise. And "Starbucks for iPhone includes the features of Starbucks Card Mobile, like the option to reload your Starbucks Card, track your Stars in the My Starbucks Rewards program and scan your barcode on your iPhone at the register" ("Starbucks card mobile," Starbucks Official Website, 2012).

On the 'pro' side, these types of cardless payments are extremely useful for Starbucks, not simply in terms of facilitating payment from consumers, but also in terms of encouraging patronage. Ease of payment encourages repeat consumption, rather than the consumer electing to choose to eat at another location. Since adopting mobile payments, Starbucks has received more than 3 million payments by phone and counting (Bishop 2011). Cashless payments also encourage consumers to constantly check their balances by visiting the Starbucks webpages, which can 'turn them on' to Starbucks' vital social media presence on Twitter, Facebook, and Foursquare. This allows Starbucks to connect to consumers and promote special offers and also creates a sense of a 'friendly' relationship between the corporation and consumers, versus one which is based solely upon self-interest. This fostering of interest in the company through technology is well-suited to its client base of relatively young, moderately affluent people, and Starbucks further caters to their obsession with technology by offering free Wi-Fi in all of its stores, an amenity its independent competitors may not provide. This can be a 'tipping point' for consumers who might guiltily feel they should patronize an independent coffee store. Using social media is also less expensive than advertising through traditional media, as it is at least partially user-generated.

On the 'con' side of using such technology, however, is the concern about privacy. Starbucks must be careful that the data customers transmit regarding their electronic payments is not compromised, and sharing information gathered about customer buying habits could create a negative image for a company that has worked so hard to preserve an upstanding corporate image.

Success of failure: Locations within a shopping center