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Startbucks Blue Ocean Strategy - Essay Example

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The reason for Starbucks success has been their business model that was always about the people worldwide. They cared about their customers and employees both, in other words their business model has always had its focus on the people and it will be discussed in this paper…
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Startbucks Blue Ocean Strategy
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?Starbucks Blue Ocean Strategy Starbucks: competition irrelevant Over the past years the goal of different companies has become to make their brand relevant or the competitors irrelevant. Many leading names of today have done this in order to make their mark in the world. They have raised their innovation level so much their customers don’t even think of moving to another company, they have become the ‘must haves’. One such brand is the STARBUCKS coffee. Starbucks did not take away anything from its competitors all it did was made coffee more popular. It established itself in such a way that people preferred it over everything else. The reason for Starbucks success has been their business model that was always about the people worldwide. They cared about their customers and employees both, in other words their business model has always had its focus on the people. This is why they are such a big name today, for example when McDonalds launched their MacAfee it faced a huge loss to Starbucks. BLUE OCEAN OR RED OCEAN: Currently Starbucks is a blue ocean it has been so ever since it started but slowly and gradually they are moving towards becoming Red Ocean which means to compete with others. Blue ocean strategy means that tomorrows main leading companies will not fight with their competitors instead they will open up in places where the competition is absent and will make a mark for themselves or establish a proper brand for which the competition is irrelevant. The 6 paths framework strategy: According to the six paths framework strategy of the blue ocean strategy to conceive new market space for the specific company, Starbucks has to follow the six main strategically points. First of all they have to look for alternative industries. They have to look for new alternatives to help them grow as a blue ocean. Secondly Starbucks has to look over the different strategic groups within the coffee industry. They have to develop such strategies which will improve their position within the industry they belong too. In other words the key to make a blue ocean is to break out the small tunnel vision of the people by developing a good understanding of the factors which are important for the customer`s decisions. Thirdly Starbucks has to look over the chain of customers or buyers. To fulfill the customers’ requirement the company must look for the interest and taste of the customers. Blue ocean strategies give more importance to the customers then to the competition with the different companies. Fourthly Starbucks has to offer the customers complementary products and other services. This will make the customers happy and they will stay satisfied and as a result they will become a loyal customer of Starbucks. New and innovative ideas should come forth for such offerings. Fifth is that Starbucks has to be more appealing to the customers. The company has to make plans emotionally which will attract the customers. Lowering the prices will appeal the customers and they will welcome it. And the last step which Starbucks has to follow is to look though time, the company should offer the customers products according to their desires, the company should not be time dependent they should maintain their standard and always fulfill the customers’ requirements. A canvas strategy: The blue ocean strategy must include the canvas strategy which means that the central action and framework of the company must follow the blue ocean strategy. The range of different factors of an industry depends on, invests and competes in and the offerings level of the company with the customers’ acceptance of the product. A graph should be made between these two important factors. The canvas strategy is important for two important reasons, one is that it helps to capture the present situation of the known market space that helps the members to clearly see the points on which an industry competes or battles on, and the places where the concentration of competition is higher in, and secondly it helps to shift focus from competition to finding alternatives for the customers. This strategy helps to form a graphical representation of the performance of the company according to the factors that are considered competition in the industry it belongs to. The horizontal axis displays the factors that the company competes in and the vertical axis display the offering level that the buyers receive. Three triers: The three triers consist of the non-customers of the market. These three types of people are turned into customers by following different strategies. The first is the set of these non-customers are basically they people who buy the companies’ products very less. They are considered non customers. They can leave the industry at any time , to make them stay and offer them something attractive the company must make three kinds of changes , which include a reduction in the prices and increase the quality these customers will stay and might become regular customers as well, the second thing tier for these noncustomers are the people around us who don’t use the company’s products at all, in other words they refuse to use it, they know the option of your products but they refuse to use them, and the third tier is the set of customers which are quite far away from your market they are have never even considered your companies products. Buyer Utility Map and the experience cycle: The buyer utility map helps to understand the buyers behavior according to the company`s sales. This map consists of six main cycle stages, which are; purchase, delivery, use, supplements, maintenance and disposal. It studies and evaluates the buyers’ experiences. Basically buyer utility map is a two dimensional metrics which shows the six utility levers and the six stages of the buyer experience cycle. Experience cycle is basically an approach or a tool which is very new in the industry that will help our company to synthesize and give a huge or broader approach of the whole customer masses, this tool is being adopted by many brands and markets today. Uncover blocks to buyer utility to design the correct sequence: From studying these six steps of the cycle the company is able to unlock six levers for the exceptional buyer`s utility, which are simplicity, risk, image, customer productivity, convenience and environmental friendliness. Hurdles and characteristics of limitations: The hurdles and characteristics of limitations which the company may face are, that the company Star buck only offers coffee , it does not have a variety to offer to the customers , secondly is is quite expensive for every person to afford , whereas there are other compotators in the market which are offering good quality coffee it much cheaper rates. Thirdly Starbucks lacks innovations and fourthly is doesn’t offer many promotional or discount deals for the customers. The three E Principles of Fair Process: The three E principle of Fair process which we will include in our blue ocean plan are: Engagement, which means that everyone will be involved in making the best strategy no matter what their position is, good ideas from all will be welcomed, second is explanation, which means that everyone who is involved will be given explanations this increases the trust and values every team member. The third E is the expectation clarity, which means that everyone involved is responsible. Eliminate-Reduce-Raise-Create Grid: Eliminate, raise, reduce and create grid are very important points on which the blue ocean strategy heavily depends on. This means that the factors have to be identified which need to be: eliminated for the company to make progress, which need to be raised to help the company grow, the factors which should be reduced which lower the company`s standard and the factors which be created or introduced. Sustainability methods which will be used: Methods such as above the line marketing will be used for elimination , for raise methods like price versus budget analysis will be done , for reduce methods like prestige and complexity will be considered and to create factors like fun will be added. Sustainable method like regular analysis and monitoring the overall coffee market will be adopted to overcome these factors. Read More
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