Starbucks Blazes New Trails With Coffee Delivery Service

Starbucks recently announced they will be offering delivery services for their food and beverage items in select locations. To date, details about where products can be delivered, its costs, and how it is going to function have been withheld. Experts are confused as to how any company could offer low cost personalized differences. They do seem to agree that if it works Starbucks will be blazing some new trails in logistics that will be adopted by others.

I congratulate Starbucks on creating buzz in the market because there will be a lot of companies watching how they are effectively going to do this on low value purchases.  The media is ablaze about the development and its implications on e-commerce. Uniquely Starbucks is taking sales and delivery down to a micro level not yet seen on a large scale. 

Starbucks is trend setting by not only offering deliveries, but also providing pre-order cellphone applications that customers can pick up later. No one wants to wait in a long Starbucks line when they know they can grab and go with a pre-order application. Approximately 15% of all their customers’ purchases are being made through mobile devices. 

The great innovations have some theorists wondering. Some have argued that the minimum purchase price needs to be over $20 dollars to make it economically feasible. Certainly this is one possibility. The other possibility is they will require a purchase minimum like $7 and have three deliveries in the same area. Instead of one delivery you are making three within a short distance with each other. 

This would require delivery in high concentrated areas to make a return even possible. There is no doubt technology is lowering costs but to do so on a $2.25 cup of coffee is unprecedented. The only item to effectively beat economy of scale margins would be many small purchases or combining multiple services and benefits together. 

An additional benefit is that more loyalty through habit is being developed with every purchase. The consistent use of technology and applications fits within the tech savvy and trendy markets that create an image that others in society are likely to emulate. Getting customers to make the coffee as part of their working lives certainly makes a difference in longer term sales.

What Starbucks is doing is being a market leader in personalized logistics where members of society can order products and create consumer culture right from their phone. Today you may be limited to a cup of coffee from Starbucks or a bag of groceries from Amazon Fresh but tomorrow you may be having someone deliver your healthy meals three times a day. Wait…you can already sign up for this through a local service. Times have changed and so has the expectation of service.

Are Business School Deans and Employers Focused on the Same Graduate Skills?

Businesses want college graduates to be ready to fulfill important functions upon hire. When graduates are not ready this can raise the cost of training and slow down production. Criticism of higher education revolves around the difficulties some schools are having preparing students to take on challenges in the modern business world. A study of perceptions of deans and prospective employers helps show where college administration and business leaders see eye-to-eye and where they diverge.  

Throughout the nation a debate rages about the value of higher education, its costs, and employ-ability of students. We also know that higher education is important to grow innovation and feed the needs of employers so they can fill open positions. There is a natural split between higher education as a vessel of cultural tradition and higher education as training grounds for employment.

That debate isn’t likely to be decided anytime soon. The study helps show that business school deans and employers are not that far off when assessing the importance of certain required skills. Businesses, of course, also had a few ideas but for the most part the two seem to be in the same hemisphere. 

Top Seven Skills by Prospective Employers (In order of importance): responsibility and accountability, interpersonal skills, oral communication, teamwork, ethical values, decision-making and analytical skills, and creativity and critical thinking.

Top Seven Skills by Business School Deans (In order of importance): critical skills/abilities to the organization are oral communication, written communication, interpersonal skills, decision-making, responsibility and accountability, ability to work in teams, and creativity and critical thinking skills.

As you can tell oral communication, responsibility and accountability, interpersonal skills, decision-making, creativity and critical thinking skills were common to both deans and prospective employers. Where they differed was ethical values, analytical skills and critical skills/abilities.

The differences seem to be based in the soft and hard skills. Hard skills are akin to specific job functions that you may find on a job description while soft skills are related more to personality and the ability to work with others. Understanding how to make a chart is an easily measurable skill while having the social abilities to influence stakeholders to accept the meaning of that chart is a little more difficult. Employers lean a little heavier on soft skills while deans focus more on hard skills.

This isn’t particularly odd considering that hard skills are easier to implement into curriculum and easier to assess for successful achievement. For example, someone can either explain compound interest or they can’t. It is more difficult to assess soft skills such as politeness or ethical behavior because these are more situational. Employers will still need to interview and assess needed soft skills themselves. Sometimes they are going to get a great employee and sometimes they won’t. It will be difficult for education to fix this problem but could consider methods of encouraging these behaviors in students. 

Shuayto, N. (2013). Management skills desired by business school deans and employers: an empirical investigation. Business Education & Accreditation, 5 (2).

Moving Beyond Service-Dominant Logic to Include Change

Service related add-ons can raise the value of products while encouraging higher levels of customer satisfaction. A paper by Lusche & Spohrer discusses the service-dominant (S-D) logic as a science that encourages systems-level thinking and provides greater value propositions. The development of service related products alleviates many human-oriented problems in business and government entities.  Thinking about service requires moving beyond the obvious to incorporate difficult to account for complexity.

Improvement comes with a level of chaos as we learn that we are interconnected and influenced by a complex system of people, events, and actors. S-D logic helps us understand how the underlying principles that foster growth and creation are not readily apparent. They are part of the fabric of our environment but when taken together create the totality of our economic system.  

Innovation changes the environment in a way that can encourage higher levels of functioning and interaction between business and customers. Sometimes this innovation is complex and at other times it is small and adjustable. Change is the process of generating new solutions to existing processes and enhancing smooth business functioning through continuous adjustment. 

Current institutional logic works well when the market is simple and stable. Business and marketing management is focused heavily on analysis, planning and control but are not optimum when the environment changes. The process of strategizing is based upon fixed market assumptions that don’t regularly leave enough room for unexpected adjustments. 

It is important to consider the adjustments in business development as the business changes and adapts to its environment. When new products and services make their way onto the market they naturally create change among the economic actors who seek to maximize their earning potential. We can see this occur in the development of stronger and more reliable cell phones that incorporate apps to enhance their functionality. 

All service development should think about strategy beyond the here and now and leave enough flexibility within the strategic decision-making process to adjust to changes and new developments as they occur. This requires openness to new information that can help a strategy adjust as that new information becomes relevant. Providing for some level of contingency planning of most likely change scenarios can be beneficial. 

Lusch, R. & Spohrer, J. (2012). Evolving serve for a complex, resilient, and sustainable world. Journal of Marketing Management, 28 (13-14).