Blue Ocean Strategy: Environment And Market Strategy

Decent Essays
Environment and Market Strategy Firstly, looking at environmental factors and in particular the changes in the overall external macro environment. Such changes cannot always be pre-determined and can be seen to effect organisations on various differing levels strategically. (Brooks & Weatherson, 2010) One example of a colossal environmental factor which affected not only Starbucks but organisations globally lies within the global financial crisis of 2007-08. Prior to the 2008-2009 period, Starbucks had not posted a loss for fifteen years. (Lee, 2008) Leading on from the global recession, Starbucks found themselves in a state of struggle with stock prices throughout the company at an all-time low. (Lee, 2008) Comparatively, revenues from …show more content…
Starbucks finds itself in a highly competitive market place and as such it is essential to set itself apart competitively in order to gain an increased consumer base. (Swan, 2014) As a means of entering an uncontested market place, the ‘’Blue Ocean’’, Starbucks has worked tirelessly as an organisation to transform the overall coffee shop experience and environment for consumers, Starbucks wished to make the service more so a way of life rather than a onetime purchase. (Swan, 2014) Larson further reiterates that Starbucks aim to provide a feeling of a ‘’third place’’ for customers whereby it is possible to escape from work and home life. (Larson, 2008) As to achieve a perfect ‘’Blue Ocean’’ strategy throughout the coffee industry, Starbucks announced a partnership in late 2007 with iTunes, allowing customers an accustomed music service when entering a Starbucks branch. (Fleshman, 2007) Starbucks also changed the landscape and led the way when it came to launching offering free Wi-Fi services in 2010 throughout each chain. (Warren, 2010) The overall aim was to enhance the overall experience for existing customers whilst also creating demand from a potentially untapped customer base, further widening overall position in the ‘’Blue Ocean’’. (Swan, …show more content…
Since 2008, the coffee shop market size has increased year on year. Appendix 1 demonstrates market growth between the years 2009-2013. (Market Line, 2012) As a result of increasing market size, competition is rife throughout the coffee industry with competition not only coming from other well established coffee chains for example Costa Coffee and Café Nero but also other well established businesses such as McDonald’s have latched on to the expanding demand from consumers. Consequently, McDonald’s increased their product line and have sold speciality coffee throughout its globally recognised chain since 2008. (Market Line, 2014) McDonalds launched itself in to the coffee and intended to be seen a cheaper alternative for consumers, some have even claimed that it would ultimately prove a ‘’game changer’’ for Starbucks. (Lim, 2014) Despite the competition, Starbucks have remained defiant and global sales have grown consistently year-on-year since 2008. (Lim,

Related Documents

  • Great Essays

    EXECUTIVE SUMMARY Coffee market is continuously changing and this section include the marketing plan to show where Starbucks stands in this current market. Major changes in coffee industry include changes in the price of coffee, changes in buying habits of customers,new market entrants etc... Starbucks is well known for its exceptional coffee products and is regarded as the company that has revolutionized coffee business. Its origin is in Seattle,Wsahington. The company has its operations currently in 5 continents,in nearly 30 countries.…

    • 1975 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    If one needs a coffee to kick start their day, the options for where to get their fix are almost limitless. But even with the rise of local coffee shops or other fast food chains, there is a high chance for one to grab their brew at Starbucks or Dunkin ' Donuts. They are both worldwide coffeehouse chains that are still continuing to grow. Although they may seem like just an average joe store, they both have pros and cons in each cup. The largest dispute is whether or not these coffee consumers are getting their daily grind at Dunkin ' Donuts or at Starbucks.…

    • 729 Words
    • 3 Pages
    Improved Essays
  • Decent Essays

    Many other companies have attempted to obtain the amount of success as their competitor, Starbucks, but no one can seem to beat the popular and well liked coffee shop. Starbucks has a unique…

    • 903 Words
    • 4 Pages
    Decent Essays
  • Improved Essays

    Redondo Beach Restaurant

    • 872 Words
    • 4 Pages

    The entire scope of this particular business idea entails; classifying and describing the product, knowing the target market and consumers of this product, considering a competitive situation analysis of this product as wells doing a SWOT analysis for this business. In a brief summary, the product is a processed consumer product. This product is to be used in coffee shops as the end product to the consumers. I consider this product to be a convenience good since it entails being frequently bought by customers catching up time or resting in the coffee shop. The coffee sold to the customers is also not very expensive.…

    • 872 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Starbucks corporate-level strategies are the main factors that led to Starbucks success. According to Bradley (2016), “corporate level strategy is concerned with the strategic decisions a business makes that affect the entire organization. Financial performance, mergers and acquisitions, human resource management and the allocation of resources are considered part of corporate level strategy.” There are many strategies of Starbucks corporate level strategies, such as value Neutral strategy (Bradley, 2016).…

    • 1350 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    Apart of the high demand and cost for petroleum these days, coffee is appointed to be the second most traded product on global markets next to oil. Coffee is nature resources that is cultivated in more than 50 countries and provides living for more than 22 million farmers, altogether up to 100 million people are involved in the cultivating process, trading and retailing of the product globally. The aim of this report is to answer the questions given in the study case regarding to the demand and supply for Starbucks coffee. Starbuck Corporation is a company that purchase, sell and roast whole bean and rich-brewed coffees, espresso beverage, a selection of food items and coffee related a selection of quality teas, it is also the premier retailer, roaster and brand of speciality coffee in the world, Starbuck operates in 65 countries, according to the annual report of Starbuck, it has 10,713 stores in total located in North America, Latin America, Africa, Europe, Australia and Asia, it was found in…

    • 1051 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Starbucks is the global leader in the coffee house industry. With it primary market in the US, Starbucks hinges its competitive advantage on the quality of its products and services. In addition to a globally recognized brand, the company has achieved wide-ranging success in spite of the implementation of a premium pricing strategy. Although the company has diversified its coffee brands, specialization in coffee stands as a strength and weakness in the enterprise. However, based on the performance in the market, the marketing, and operational strategies are suited for the various market segments.…

    • 3556 Words
    • 15 Pages
    Improved Essays
  • Improved Essays

    Task 3A All companies have factors that affect the success of their business in the market. These are the political, legal, and social factors. This means that these three factors are given top priority in order for the companies to gain success. They have to conduct market investigation which will help these businesses to gather information to help their process of decision making in the market.…

    • 1251 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    Starbucks enters humbly in Colombia without generating direct competition with Juan Valdez Café, only seeking its own market (for the moment) by increasing consumption of Colombians, and increasingly driven by the preference for new experiences over a cup of coffee. This is reflected in the proposed plans of opening more stores, and Juan Valdez further increase of its sales by 30% since the arrival of…

    • 786 Words
    • 4 Pages
    Improved Essays
  • Superior Essays

    Though it has a very big strong hold on the coffee market, it is still developing relationships outside of the Unites States. This requires action on Starbucks part, entrepreneurial action. This is the action through the creation of new products/processes and the entry into new markets which may occur through a newly created organization (Hirsch & Peters, 1989). Before taking action one must asses the market and use prior knowledge to ensure that the new venture is needed, will be welcomed, and will draw an…

    • 1151 Words
    • 5 Pages
    Superior Essays
  • Great Essays

    Starbucks: The Marketing Saga MBA 205 Marketing EMBA Dubai 2014/2015 Group A3 Over four decades since its inception, Starbucks positioned itself among the world's top ranking brands as the company grew from being a small coffee shop based in Seattle to becoming an internationally renowned name. This study sheds light on some of the marketing schemes that were utilized in the development of the brand, the distribution strategy, the pricing plan, and the communication approach to portray the Starbucks' journey towards globalization. 1. The Starbucks Brand Starbucks has been very successful, partly because of the triumph of its logo, symbol, and design.…

    • 3446 Words
    • 14 Pages
    Great Essays
  • Superior Essays

    Starbucks

    • 1587 Words
    • 6 Pages

    The business can expand the number of coffeehouses with different products and drinks to reach broader customer group. (4) Co-branding with the other food and drink manufacturers, and brand franchising of other goods and services both are having potential. Threats (1) Increased competition from the local cafes and specialization of other coffeehouse chains. Local cafes offer customer oriented menus at cheaper prices than the Starbucks.…

    • 1587 Words
    • 6 Pages
    Superior Essays
  • Great Essays

    Starbucks Mission Analysis

    • 1099 Words
    • 5 Pages

    Starbucks has one simple mission, which is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” It is this mission statement which has contributed to the development of the brand over the past four decades, as it is found in Starbucks more than just a coffee shop. It is not just an “escape” for anyone who needs a break from their day-to-day work but also becomes a place for friends to hang out and even a venue for businessman to meet. We want to provide people - regardless of their age, occupation, or location - a unique experience: a coffee shop as a place to relax, work and make friends.…

    • 1099 Words
    • 5 Pages
    Great Essays
  • Decent Essays

    EXTERNAL (PEST) Pestle Analysis is originally known as PEST Analysis, it is used to determine the impact of the external factors on the organization. Francis Aguilar was the one who originate this tool; he believes that PEST act as an important factor in scanning the business environment (Pandey, 2011). PEST stands for Political, Economical, Social and Technological factors. According to Pandey (2011) PESTLE Analysis is used to examine the current and future state of the industry an organization belongs to.…

    • 832 Words
    • 4 Pages
    Decent Essays
  • Great Essays

    b. Define and characterize what BLUE ocean strategy is. Discuss how Cirque du Soleil as an example of blue ocean strategy. Compare blue ocean strategy from the red ocean strategy. EXPAND ... Blue Ocean Strategy is the idea of companies creating their own market.…

    • 1375 Words
    • 6 Pages
    Great Essays