It is important to note that data analytics is a highly powerful instrument, which can be useful in order to improve the key strategic decision-making process. Starbucks is a global business, which serves coffee products in a wide range of coffee shops. According to an article, it is stated that Starbucks began fully integrating data analysis as a measure to decide where to open new stores (Rachel, 2018). It is stated that the decision to utilize data analytics was made in 2008 by CEO Howard Schultz (Rachel, 2018). However, the company does not analyze data on its own because it has a contract-based collaboration with a location-analytics company called Esri (Rachel, 2018). For example, Starbucks uses Esri’s “technology platform that helps analyze maps and retail locations. It uses data like population density, average incomes, and traffic patterns to identify target areas for a new store” (Rachel, 2018, para. 5). In other words, the cooperation between these companies allows Starbucks to outsource data analytics processes, which means that the company does not need to hire new talent, build new infrastructure, and dedicate resources in order to establish an effective analytics department. Therefore, outsourcing the data analysis saves time, effort, and resources for Starbucks, and data analysis transforms how the company expands with precision rather than an intuitive approach.
I think that such a move is an outstanding decision since Starbucks already experienced some form of failure by expanding and establishing stores recklessly, thinking that more stores will equate to more market share and revenue. Therefore, I think that such a solution is a proper one because Starbuck is already struggling from its previous resource-wasting, which is why it cannot afford to wait for the establishment of its own analytics department. What is the long-term solution for data analysis at Starbucks? Will the company eventually decide to have its own analytics department?
Reference
Rachel. (2018). Starbucks’ secret ingredient: data analytics. Digital Initiative.