The Major Reasons for Starbucks' Tactics - Case Study Example

Case study Starbucks is a leading international coffeehouse chain based in the United s of America. In order to attract more s to their units Starbucks has recently announced to provide free Wi-Fi connectivity to their customers in their shops in collaboration with AT&T. In the present generation of technological advancement, this strategy may seem efficient. Customers all around the world like to get connected with the virtual web space all the time and certainly having the facility to surf the internet in coffee place will act as an added advantage for Starbucks. Free Wi-Fi connectivity will also help to increase the overall customer satisfaction among the customers and, in turn, will instigate the feeling of customer loyalty on them. Customers will choose Starbucks repeatedly over other coffee shops in lieu of the facilities which Starbucks provides. Various indie cafes like Seatle’s Baunhaus Books and Coffee also have adopted the same tactics of providing free internet access at the coffee shops to have an edge over the competitors. The new strategy proved effective as it was found that the café was overcrowded in the evening with people using the computers and having an access to the facility (Groove, 2010) 2. One of the major reasons for Starbucks tactics of providing free Wi-Fi connectivity in their coffee shops was the rise in competition from McDonalds, and Starbucks was failing to attract the customers in their shops for the morning breakfast. Critical analysis by Starbucks revealed the fact that it was failing to retain the customers as McDonalds had started providing the facility of free Wi-Fi access to its customers and customers easily fell for it. In order to avoid further loss in the business, Starbucks decided to imitate the ways of McDonald’s and had the views that providing of the same facility will be considerable enough for them to retain and bring back their old customers. It was quite acceptable from the customers’ view point that they would prefer to utilize the added service which McDonalds was providing at no cost. The Wi-Fi service would also have provided huge help to them as they could sit in the store and carry out a wide number of tasks using the internet facility which has emerged out to be one of the preffered mode of operation in the era. It can be eventually concluded that McDonalds’ strategy proved effective in driving away a significant portion of Starbuck’s customers. 3. Some organizations provide free Wi-Fi connectivity to the customers in exchange of market research studies or for viewing certain advertisement of the service providers. If such an option is provided to me in an airport I would gladly accept the offer considering the fact that I will not be able to access the internet once I step in the flight and may miss important information. Often some tasks are not carried out in time and I can complete those tasks easily by using the free Wi-Fi service. However, if I am using a corporate laptop I will not be using the Wi-Fi service. There are some security concerns over the Wi-Fi network and the data transmissions also do not take place in the encrypted form. Any damage to the corporate data in the laptop will harm my cause. Many people accessing the Internet from the same point also raise the concern of virus attack in the laptop which may further give chance of hacking the data inside the servers. In case of using a corporate laptop I also need to abide by the rules and regulations of the organization regarding the use of laptops in the public place. Real world activities: 1. The upgradation of technology is occurring at a rapid pace and more number of people is becoming dependent on technology to carry out their tasks. People tend to access the internet at a more rate than it was observed a decade ago. As a result, service providers are trying their best to provide the users with internet connectivity almost at all places. As a result of this effort, the more number of Wi-Fi hotspots are increasing and nowadays the mobile broadband facility has also become largely popular. However, in matters of preference I would like to choose the mobile broadband facility. The main limitation of the Wi-Fi facility is that Wi-Fi facility is available at limited place and one needs to be in a Wi-Fi hub to access the facility. On the contrary, the mobile broadband can be accessed at any place and the users can access the facility of the internet. In matters of cost, the users of Wi-Fi facility needs to incur additional costs to access the service of the public hotspots though no extra cost is required for the configuration in home or office (Mobile broadband or Wi-Fi?, 2009). The service providers of the mobile broadband connection also offer suitable deal for the customers. In USA, T mobile provides the service at $ 40 per month and provides 4G connectivity which appears more beneficial to me (Mobile broadband comparison, n. d). The access to mobile broadband service has also more security as data is encrypted by the service providers which is absent in the case of the Wi-Fi networks. 2. Examples of fast food chains and cafes operating in USA which provide free Wi-Fi connectivity are Barista, Panera Breads, and Krystal. The coffee shops and the fast food chains which do not provide the service of Wi-Fi service include Four Barrel coffee shop. The difference observed in the operation of the coffee shops is that most of the international brands have opted for such service. The focus of these brand organizations has always been on the customers and they incorporate various strategies to attract more customers and to implement the Wi-Fi strategy was an aim to attain the corporate objectives. However, they cannot invest in small scale coffee shops operating in the country and are happy with the number of customers which visit the shops. Four Barrel coffee shops also concentrate much more on its products rather than providing added facilities (Henderson, 2010). References Groove, J, V. (2010). How Starbucks Plans to Capitalize on Free Wi-Fi. Retrieved from: http://mashable.com/2010/08/12/starbucks-digital-network/ Henderson, R. (2010). Four Barrel bans Wi- Fi. Retrieved from: http://www.pocket-lint.com/news/34829/four-barrels-bans-wifi-connection Broadbandexpert. (n. d). Mobile broadband comparison. Retrieved from: http://www.broadbandexpert.com/mobile-broadband-providers/ The register (2009). Mobile broadband or WiFi? Retrieved from: http://www.theregister.co.uk/2009/01/29/notebook_connectivity/ Read More