Reference no: EM133081100
Product/Service: Starbucks delivery service.
Before the COVID-19 pandemic began, consumers would stop by Starbucks' coffee houses every morning to get a coffee on the way to work. After the pandemic began, though, more and more consumers began working from home and, therefore, were not passing by a Starbucks on the way to work. Rather than a morning Starbucks trip being a convenient stop on the way to work, Starbucks in the morning when working from home became an out of the way trip. Less consumers were getting a Starbucks coffee in the morning due to this change in routine. College students were also unable to bring their laptop and work on assignments in Starbucks' coffee houses as a nice get away and an excuse to get a cup of coffee. Thereby, students also were ordering Starbucks less because it was out of the way with little benefit for their already tight schedules. To combat these issues, Starbucks should release a delivery service. This service would allow those working from home or those busy students to still get their Starbucks coffee fill without having to go out of their way.
Starbucks will differentiate itself in the coffee delivery service arena by providing its own delivery service instead of outsourcing it, while keeping delivery charges at a rate consumers are willing to pay. Dunkin' Donuts delivers through Postmates charging a $5.99 delivery fee with no delivery fee on orders over $12. Krispy Kreme has a $4.49 delivery fee through Uber Eats. Baskin Robbins has a $9.49 delivery fee through Uber Eats. McDonald's has a $2.99 delivery fee through Uber Eats. Starbucks should charge a $5.99 delivery fee, which is about the average of what competitors are charging for coffee delivery. Starbucks is special, though, because the company is taking responsibility for its delivery service, while the competition use other sources to cut their costs.
Provide an initial demand forecast for your product/service for the first six months of operation.
Discuss the technical rationale for your forecasting method and why it is better than other methods of forecasting