Class PMBA 6314 Term Spring 1
Class PMBA 6314 Term Spring 1, 2018 Name Ray Espinosa Case Summary/Analysis All through the United States people are depending on companies to offer free Wi-Fi in order to browse email, access social media, and search the web. As smart phones and tablets continue to increase in popularity, companies have to decide if they will join the others by guaranteeing consumers to have access or risk losing foot traffic. It isnt shocking that because of the constant change in technology and the enhancements offered, Starbucks has possessed the capacity to offer with no limitations, enrollments or expenses. According to Starbuckss website Starbucks offers free, one-click, unlimited Wi-Fi at all company-owned stores in the United States, including instant access to the Starbucks Digital Network. Theres no purchase or subscription required, no password needed and no time limit on your session. (Wi-Fi Starbucks Coffee Company) The website also includes instructions on how to connect as well as a toll free number for technical assistance. As stated in the case study, the idea for Starbucks to offer time-limited free Wi-Fi to customers was acceptable for that specific moment in time. However, as seen throughout history, businesses must constantly monitor their environment in an effort to remain competitive and satisfy customers. On July 1, 2010, all Starbucks locations in the United States offered free Wi-Fi to guests, no strings attached. In addition to the free wireless offered, Starbucks added an extra incentive free online articles, music, videos and local information through a partnership with Yahoo. Specifically, as it relates to Wi-Fi, coffee shops and quick service restaurants offering free wireless access began as a competitive strategy which allowed each business to promote the free Wi-Fi as an incentive of being a patron. Over time however, free Wi-Fi is shifting into a role of necessity, which requires businesses to offer the free wireless in order to remain competitive. The textbook states the key success factor for many firms is maximizing customer value. Ultimately, coffee shops and restaurants must constantly monitor the needs and wants of their clients in an effort to ensure the customer feels they are receiving value for their money. Porters Forces Model explains the importance of collecting information and constantly monitoring new entrants, suppliers, customers, and substitute products. Consumers are now armed with smart phones, tablets, and laptops on a regular basis. The number of devices each individual carries is the reason Starbucks had to conform to the expectations of the clientele. This illustrates the importance of Starbucks constantly monitoring the external environments in their industry because free access is a critical factor in developing and keeping loyal customers. In an article from the National Federation of Independent Business website, Rosas-Guyon states Free Wi-Fi works best for any business that wants to encourage customers to spend time in their establishment. Should You Provide Free Wi-Fi at Your Business – NFIB For example, a Starbucks customer will purchase a beverage generally upon arrival, but potentially could end up purchasing food to go along with the specialty coffee beverage due to the additional time spent surfing the web at Starbucks. Free Wi-Fi guarantees that Starbuckss patrons have another reason to be loyal to the brand (2)The decision McDonalds made to have free Wi-Fi in over 11,000 stores in the United States as of January 2010 had a direct impact on Starbucks. In an effort to retain customers, Starbucks realized it was imperative for all their company owned locations to offer free wireless internet access. Individuals are often prone to forming habits and based on the growing need to have access to the internet for email, social media and web browsing, companies have realized offering free Wi-Fi can help ensure foot traffic. If Starbucks had not made this decision in July 2010, there might not have been a substantial loss in terms of a decline in sales, but perhaps the increase in sales for Starbucks would not have been as large if the company failed to recognize the need to offer free Wi-Fi. By offering free wireless internet, Starbucks is able to attract various people including students, professional, and retired individuals who need a place to meet which provides access to the internet. Without embracing the necessity to offer free Wi-Fi, McDonalds would have been able to easily gain Starbuckss customers by offering the following free Wi-Fi at more than 11,500 participating restaurants, where customers can access the Internet using their laptops or PDAs at no charge. Free Wi-Fi McDonalds.com For six months, McDonalds enjoyed the ability to market and promote their generous offer of free Wi-Fi without any competition from Starbucks. In those short months it took Starbucks to finalize the decisions associated with offering free wireless and successfully implementing the systems, those days most likely felt like an eternity due to fear of losing customers. The best way to describe the necessary steps Starbucks had to implement in order to make free wireless feasible is through understanding Lewins Organizational Change Model. Lewin, a physicist as well as social scientist, explained organizational change using the analogy of changing the shape of a block of ice. Lewins Change Management Model First, Starbucks realized that there was need for change each store needed free Wi-Fi throughout the United States in order to remain competitive, which is referred to as unfreezing. Although adding Wi-Fi is not a monumental change to the organizations core, the basic elements of transformation remain the same when a company alters an existing process. Secondly, the wireless transformation was able to occur by Starbucks making provisions for the individual stores and deciding collectively that by July 1, 2010 all stores would be equipped to offer free wireless. Lastly, upon completion of the change, the organization is able to refreeze in the new state, until another opportunity is presented. (3)Personally, I would not answer questions in order to have access to free Wi-Fi at locations like airports. The bombardment of advertisements does not appeal to me either as a way to access the internet. While on my computer, I do not want to be interrupted from my tasks and items to accomplish to benefit someone else, such as the companies conducting the research or running the advertisements. For the most part, I do not travel with my laptop anymore because it has become cumbersome and is not necessary due to the introduction of smart phones and tablets. I can sit in an airport and ultimately complete anything I would have done on a laptop, such as reading and responding to emails, checking out Facebook, and searching Google by using my iPhone and iPad through my carriers network. Even if the Wi-Fi was offered for free with no strings attached, such as the advertisements and/or questionnaires, I would not use the wireless network due to potential security concerns. Regardless of whether the laptop was personal or business use, I would not connect to the free Wi-Fi because of the ease of access to my computer in a place with thousands of people. Amaras Law can best sum up the potential for disaster using free Wi-Fi in a place like an airport due to so many unknown factors and concerns. We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. Amaras Law (PC Mag.com) Work cited OBrien, James Marakas, G. (2012). Management Information Systems, 10th Edition. New York, NY McGraw-Hill/Irwin HYPERLINK http//www.seattlepi.com/business/article/Starbucks-to-offer-limited-free-Wi-Fi-1264130.php http//www.seattlepi.com/business/article/Starbucks-to-offer-limited-free-Wi-Fi-1264130.php HYPERLINK http//www.nytimes.com/2010/06/15/technology/15starbux.html http//www.nytimes.com/2010/06/15/technology/15starbux.html HYPERLINK https//www.starbucks.com/coffeehouse/wireless-internet https//www.starbucks.com/coffeehouse/wireless-internet HYPERLINK https//www.starbucks.com/coffeehouse/wireless-internet/starbucks-digital-network https//www.starbucks.com/coffeehouse/wireless-internet/starbucks-digital-network Case Study 4, Starbucks and Others The Future of Public Wi-FiChapter 6, Page 268-269 Page PAGE 2 of NUMPAGES 5 Y, dXiJ(x(I_TS1EZBmU/xYy5g/GMGeD3Vqq8K)fw9
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