CHRIST UNIVERSITY OF MANAGEMENT INSTITUTE
“STARBUCKS AND OTHERS: THE FUTURE OF PUBLIC Wi-Fi”
CASE STUDY ANALYSIS
Wi-Fi usage has been on the upswing recently, thanks to the rise of smartphones, especially the iPhone. Whether it is airports or cafes, people are increasingly logging onto Wi-Fi networks.The case talks about free Wi-Fi in various areas of businesses like restaurants, airports etc to attract crowd and to increase their business. It talks about transition from Wi-Fi – for money to Wi-Fi as a lure. The various strategies implemented by these businesses to give away free public Wi-Fi. Various issues like pricing, security issues etc are discussed in detail in the analysis below. The case also talks about newer trends like mobile broadband which may be a threat to Wi-Fi networks. Starbucks is facing competition from McDonalds and Seattle’s Bauhaus books and coffee that are also using Wi-Fi. As Wi-Fi hot spots are becoming free some operators are turning to advertising to make money for example Ji wire is the company which serves ads to more than 8 million people ,In cluding Boingo group. This company has started to target on I phone users Now a day Wi-Fi is free at airport one of the largest is Denver international. In addition to advertising the free Fi network Wi-Fi access is subsidized by Disney ABC television shows where users can down load over the connections airline. The use of Wi-Fi in airlines has become competition for railways as most of the business people who show a major interest in using Wi-Fi for killing the time when they are free Though the prices are ranged at premium at all these industries foe product and services the customers are willing to access their services and buy their products as they are providing free Wi-Fi services. STARBUCKS:
Now that the market is flooded with espresso machines at quick service restaurants, grocery and convenience stores outlets all competing in the specialty segment, Starbucks finds it more difficult to differentiate its customer experience. Like many companies it is shifting to a more profitable business model based on customer loyalty.
Starbucks is leading a transition from Wi-Fi – for money to Wi-Fi as a lure. Starbucks and AT & T give 2 hrs a day of free Wi-Fi.but only if you use Starbucks card.
Benefits of cards:
* People with Starbucks cards in their pockets probably more likely to choose Starbucks when there are other nearby alternatives.
* By getting millions of customers to pay in advance, Starbucks gets more cash upfront.
* Card gets stolen or forgetten, Starbucks gets to keep the money without supplying anything.
The Starbucks Digital Network (SDN) will be available to customers at company-operated stores beginning this fall. With SDN, Starbucks hopes to engineer an in-store, third-place experience like no other by offering exclusive and premium content from hand-picked content providers, including Apple, The New York Times and leading health publisher Rodale. For Starbucks, the in-store experience is paramount.
The company already knows that computer users spend about one hour per visit on Wi-Fi while mobile users stick around for 15 minutes per web session. Plus, Starbucks has a history of curating music and pop culture content with in-store selections. SDN is the realization that nationwide free Wi-Fi offers Starbucks more access to its customers; it is a marriage of digital convenience and curatorial prowess. In fact, when it comes to SDN, there’s no money changing hands between Starbucks and the content providers. Content providers are giving away restricted access in the hopes of attracting new business, and Starbucks wins by having something completely unique and customers benefit from by getting something of value at no cost. Brotman says, “It’s a win-win for everyone.” Starbucks does plan to upsell SDN users, and there will be a revenue share between the coffee retailer and its content...
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