Only Converge: Networks and Connectivity in the Information Economy

The network economy offers unprecedented opportunities to combine and leverage resources across markets, companies, value chains, products, services and technologies. Strategic convergence is the new business imperative.

Starbucks, which sells coffee, pastries, coffee beans and coffee-related accessories, has been expanding through its own retail operations and through new customer alliances (Westin Hotels & Resorts, United Airlines, Barnes & Noble and Marriott), co-branding partners (Pepsi, Dreyer’s Grand Ice Cream) and new retail formats such as in-store news, airport kiosks, bookstores and hotels, to drive profitability.

Recently, the Seattle-based group has also leveraged mobile telecommunications services to promote its brand and announced a strategic alliance with Oxygen Media, a high-profile media company publishing web sites for women. Starbucks will probably sell products through Oxygen’s web site and the companies will build content to cross-promote their web sites. The alliance with Oxygen clearly moves Starbucks toward taking further advantage of technologies. It is clearly leveraging relationships across markets, companies, products, value chains and technologies (see Figure 1).

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