Starbucks Case Analysis

801 WordsMay 23, 20124 Pages
STARBUCKS CASE Question 1 Do you agree with the plans by Starbucks to offer time-limited free Wi-Fi to customers? Yes. Providing customers with limited time free Wi-Fi as offered by Starbucks is aimed at getting customers to sign up for their breakfast and coffee by paying in advance for the services, such that their sales revenue is assured. As it stands, the company’s major competitors are other corporate giants like McDonalds and other major companies that are also being aggressive with Wi-Fi but are currently charging for Wi-Fi use. Thus, Starbucks is the first of its direct competitors to provide free Wi-Fi, which gives the company the edge. That the other corporate giants are keen on Wi-Fi services means that customers are actually demanding for Wi-Fi services in cafes. By providing free but limited Wi-Fi services, Starbucks may be able to attract a few price sensitive customers who do not have any form of loyalty to a particular café but rather are more swayed by Wi-Fi services. As Starbucks operates in about 89 countries, the offer of free Wi-Fi by allowing customers to buy Starbucks card will also ensure customers who travel to other countries are likely to go to a branch Starbucks café. Do you think free Wi-Fi would be enough to instill that kind of loyalty? By demanding that customers purchase the Starbucks card before having access to the free Wi-Fi, clients who opt to purchase the card may be forced to taste Starbuck’s coffee perhaps for a first time. If the company’s coffee and breakfast meals are as tasty as competitors, it can begin to sway customers. However for customers that are loyal to their competitors as Wi-Fi is not the direct service they seek for, they are not likely to bulge. Hence, the effect on loyalty is not likely to be anything rewarding. Based on the experiences of the other coffee houses reported above, do you think

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