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Starbucks’ Data Analytics Integration in Business Strategy

Many companies are now starting to integrate data analytics into their business strategies to improve their performance. There are many examples of companies using data to better predict products users may like, credit default risk, and supply chain optimization, but Starbucks is utilizing date science strategies to determine where to open their next locations. Not only will they utilize the other data science insights on what to sell their customers at the location but they will also be determining the optimal location for a new store can create larger opportunities for sustained growth.

Starbucks takes information on the location, traffic, demographics, and local customer behavior to determine if a new location will be a top performer. This gives Starbucks a way to choose locations that will give the largest revenue growth and highest success rate (O’Neill 2016). I thought this example was creative because it goes past the simple questions of “what products do our customers want” into the deeper realm of “where are our customers” and “how can we make it easier for them to access our products”. This showcases an advanced approach to data analytics in business strategy. This approach to data analytics involves ensemble modeling techniques. They are taking their models around general product selection and tying it into models around location and traffic flow information too. Starbucks’ approach shows that they have strong business acumen tied into a data science team to achieve their amazing market dominance in a non-tech industry.

Author: Logan Callen


O’Neill, Eleanor. 2016. “10 companies that are using big data”. ICAS, May 13, 2020.

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