Luckin Coffee: Digital Strategies, Governance, and Ethics

Name: Luckin Coffee: Digital Strategies, Governance, and Ethics (English version)
SKU: W24623

Yulin Fang, Ning Su, Yuqin Jiang

Product #:W24623

Supplier:Ivey

Discipline:Information Systems

Setting:2020

Details:Case (PDF) • 17 pages • 2021-09-10

Subjects:

Technology and analytics Information systems

Industries:

Food and beverage sector

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$10.54

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Designed as a coffee chain enabled by a digital platform, Luckin Coffee Inc. leveraged extensive customer behavior data gathered from its application (app), information systems, and technologies to offer innovative customer experience and high operational efficiency. Merging online with offline channels, this digital start-up quickly grew into a formidable competitor for Starbucks Corporation in China and became a star in the technology industry. Luckin was listed on the Nasdaq Stock Market in 2019, bringing additional capital to fuel its ambitious growth. However, in 2020, a report revealed a deep scandal, showing falsified financial and operational figures. The scandal could have a profound and far-reaching impact and offers lessons for the business world and beyond.

Learning Objectives

The case is suitable for undergraduate- and graduate-level courses examining internal enterprise control and scandal management, and offers students an opportunity to analyze a novel business model and consider how it created opportunities—even a need—to forge data and fake financials. Students learn how to identify the operational risks and make suggestions for coping with the scandal. After working through the case and assignment questions, students will be able to do the following:

Understand the business model and competitive strategies of digital disruptors.
Examine the root causes of the fraud and identify lessons for governance.
Explore potential strategies for responding to such scandals.