Levitt (1967), stated that to maintain the business in the strong competitive businesses’ world companies must adore innovation, not only as a desired however because it is a necessity for the company keep the existence and its growth in the marketplace.
In Starbucks coffee chain case developed by ‘Blue Ocean Strategy’s theory of innovation, using as an example one of its demanded successes. Companies can create the strategy of blue ocean in two diverse ways, in some cases companies can build a new businesses that they don’t have rival competing for the same place, generating a new demand that they are chasing to be different from the businesses which already exist, or some businesses can create the blue ocean from the red ocean which they change the restrictions of industry that already existed in the marketplace ( Mauborgne and Chan Kim, 2004).
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The company has invested in its coffee stores to established the its store as the third place for customer between their home and job, investing continuously in its premium version of the brand calling Starbucks Reserve Roastery where the brand combined a selection of rare coffees and retail innovation to give to the customer an entirely coffee experience, where the company offers in its premium version stores, main bar, roasting area, experience bar, renowned bakery and coffee library. It makes Starbucks coffee chain a great example, it changed the boundary of the traditional coffee industry and became very success company.
Starbucks coffee chain has focused on technology as its main strategy to engaged consumers and give to them a fully company’s experience, the company new business model Starbucks Reserve Roastery the premium version in Shanghai for instance the company has combined offline and online digital experience, the company has stimulated consumers use their mobile phone in store in order to discover more about the company’s history and what the premium version of the company has to offer to the customers, through an interactive experience augmented reality (AR) and multi-sensory experience, customers have to use their mobile phones in store, thus, the augmented reality experience is a floor-to-ceiling, wall-to-wall visual image of Starbucks and its coffee process.
Therefore, the company has focused on personalized digital relationship, that is going to give to the organisation a new profits opportunity. The company launched the new model of its loyalty programme in order to influence more customers and place a customised order and pay, the mobile order and pay app is now available to non-Starbucks rewards members, teamed up with Visa Card, integrated directly into Starbucks loyalty programme, it empower purchasers earn stars in and out of Starbuck’s store, worldwide Visa Card is accepted as payment.
References
- Mauborgne, R. and Chan Kim, W. (2004) ‘Best in brief: Blue ocean strategy’, WARC Market leader, 27 Available at: https://www.warc.com/content/article/mkt/best_in_brief_blue_ocean_strategy/79644#about-the-author [ Accessed 06 March 2019].
- Levitt, T. (1967) ‘Innovative imitation’, Business Source Complete, 4(2), pp. 35-45
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