Digital media impacts on the way people communicate information, ideas, and arguments locally as well as internationally. Companies are faced with the digital imperative: Employ new digital technologies effectively or risk competitive obsolescence. Every organization wants to leverage new technologies for business transformation. Starbucks embraced digital media technology after dismal performances caused a 50% cut in its stock price (Fitzgerald, Kruschwitz, Bonnet & Welch, 2013).
Starbucks has not always been a leader in digital media. The company lagged behind relative to similar businesses. Some of the indicators of this include the fact that Point of sale (POS) systems were unintuitive and depended on antiquated technology, while store managers did not have free access to email. In 2008, the company faced the worst decrease in same-store sales. Its stock price was cut in half during a period of 2 years. A change had to be made for the survival of the business. Digital media had to be used to engage customers in improved ways.
One of the first steps was the development of the mobile app known as myStarbucks in 2009. This mobile app enabled customers to locate the store nearest to them, learn about the available products and coffees and customize their own drink. The app could also be used for feedback which is important in informing decision-making by the company. In terms of social media, the company has 54 million Facebook fans. Its Twitter followers are 3.4 million while their Instagram followers are 900,000 in number (Welch & Buvat, 2013). Starbucks is the most socially-engaged company. Social media is used for customer-fueled innovation and for feedback on products and services. This informs decision-making.
My Starbucks Idea webpage has collected more than 50,000 customer ideas and initiatives. Ideas are voted up or down to help the company to pick and implement the best ideas. The Ideas in-Action blog showcases the customer-generated ideas being implemented. The Starbucks Digital Network is an offer in stores where free Wi-Fi offers in-store customers free digital content to view as they take their coffee.
Conclusion and Analysis of Results of Change
Using mobile apps, social media, websites and other digital media has changed customer relationships. Operations have been boosted, and the company has re-engaged with customers. The company’s overall performance has also improved significantly. The stock price increased by a margin of about $65 from $8 in 2009 to $73 in 2013. Customer-generated ideas continue to drive business.
Fitzgerald, M., Kruschwitz, N., Bonnet, D., & Welch, M. (2013). Embracing Digital Technology. MIT Sloan Management Review RSS. Retrieved April 8, 2014, from http://sloanreview.mit.edu/projects/embracing-digital-technology/
Welch, M., & Buvat, J. (2013). Starbucks: taking the “Starbucks experience” digital. Capgemini consulting,3(2), 1-5.