The Starbucks Company’s Challenges in Canada Case Study

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Mobile Payments as the Disruptive Technology

The world changes every day. Humanity has already entered the new technological era. As a matter of fact, constant innovation and changes can be considered as two main factors that contribute to the success of the business. Starbucks is not an exception. The company emerged to provide customers with high-quality service, coffee, and atmosphere. Creative ideas and unordinary management decisions contributed to the accomplishment of the goals.

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There is hardly a company in the world that does not face challenges, difficulties, and changes. Although changes are the driving force that leads the business to success, in some cases, they can be not beneficial. It is worth stating that constant improvement is an integral part of the accomplishment of success. It is difficult to imagine life without smartphones and being aware of this fact the company decided to implement mobile payments. The new type of payment is disruptive technology as it changes the ordinary system completely. Keeping pace with the innovations is the priority for Starbucks.

Starbucks Canada and Mobile Payments

To get deeper involved in the issue, Starbucks should be analyzed by Porter’s model. The tense competition in the Canadian market influenced the strategies of Starbucks. The major rival of the company is Tim Hortons is the most popular coffee retailer in Canada. To win the competition, Starbucks had to change visions towards innovative systems. As for the threat of substitution, it should be stated that the products are not unique as MacDonald’s and Tim Hortons offer coffee for a more reasonable price. However, Starbucks laid an accent on the quality of product and service. According to the statistics, Starbucks has almost three percent of the Canadian market.

Originally, the primary concepts associated with Starbucks were the friendly atmosphere and high-quality coffee. To compete, the company has implemented certain changes. To make the service work faster, the system of the mobile payment and application for iOS was introduced in 2011. The changes in strategies can be explained by the improvement of service to attract more consumers.

Challenges for Starbucks Canada in Mobile Payment

Implementation of the new system of payment is a challenging task. First and foremost, the gadgets that consumers use should be taken into account. According to the researchers made by Starbucks Canada, most of people use Android and iOS. The operating system is essential to be taken into consideration while developing the mobile system of payment as the application can work successfully on one and fail on another. To improve the system, the executives could use the third party.

However, the negative experience of Starbucks USA with Square proved that the system is not well developed yet. The survey has shown that around ten percent of the Starbucks customers have heard about the innovative system of payment, and only two of them have used it. The UAE is the country that aims to reach the dominant position in the world. The e-orientation of the government in the UAE is beneficial for the implementation of the Square Wallet. I do not profess to be an expert regarding the subject, but I am strongly convinced that the system will be successful in Starbucks UAE as it provides a number of benefits and facilitates the system of payment making the service faster and more comfortable.

Starbucks USA and Square

In 2012, Starbucks USA collaborated with Square to facilitate commerce. The fundamental purpose of cooperation was the creation of applications for mobile phones. The Square Wallet is an innovative system that allows customers to pay using smartphones. Due to the work of the GPS, the baristas can see that the client entered the store, and the system recognized him. The payment transactions can be done without even taking out the mobile phone.

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To implement the system in more than five thousand stores across America, Starbuck invested almost thirty million dollars. The main problem was that the employees were not aware of how the system works. Sometimes it did not work for any reason. There were no explanations for the system, and the workers had to figure it out on their own. To improve the service, I would make workshops for employees and would spread the information for the customers to get better acquainted with the system.

Recommendations to Starbucks Canada and Starbucks UAE

Starbucks Canada faced some issues while implementing the innovative system of payment. The reason for changing the traditional way was to win the competition and to provide the customers with the opportunity to enjoy fast and high-quality service. As a matter of fact, the lack of guidance and control was not beneficial for the system to reach success. The employees were not aware how to use it and what to do in the case some mistakes take place.

It is worth noting that not many clients knew about the innovative payment. To make it fruitful, the Canadian executives should advertise and promote the system. Moreover, they can motivate customers to keep to it, by providing the flexible system of discounts. Taking into consideration the strategies of the UAE government, it is no doubt that the Square Wallet has all the chances to succeed as the technologies and innovations received the priority in the country.

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IvyPanda. 2021. "The Starbucks Company's Challenges in Canada." August 5, 2021. https://ivypanda.com/essays/the-starbucks-companys-challenges-in-canada/.

1. IvyPanda. "The Starbucks Company's Challenges in Canada." August 5, 2021. https://ivypanda.com/essays/the-starbucks-companys-challenges-in-canada/.


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IvyPanda. "The Starbucks Company's Challenges in Canada." August 5, 2021. https://ivypanda.com/essays/the-starbucks-companys-challenges-in-canada/.

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