Application of Blue Ocean Strategy in Starbucks: Benefits, Limitations and Future Development

Managing
Innovation

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Definitions, Principles and Processes of the theory ...................................................................3
Evaluation of the theory (Benefits and limitations) ...................................................................6
Application of the Blue Ocean Strategy in the historical development context.........................7
Application of the Blue Ocean Strategy theory in the future development ..............................8
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................12
Books and Journals...................................................................................................................12

INTRODUCTION
Innovation is basically described as the combination of commercialization and creativity.
In the temporary world, innovation plays a very important role when it comes to contemporary
world. In reference to modern organizations, they are usually bound for the purpose to adopt the
process, products and services in order to ensure survival. Sustaining and adopting innovation
within the company could very costly and challenging. Innovation Theory is basically considered
to be one of the oldest social science theories. With the support of innovation theory, it helps in
brief explanation about the rate at which the customers will adopt a new service or product. In
context to organization, it helps the marketers in having deep understanding about the current
trends and also helps the company in assessment of the failure and likelihood of success. In
context to innovation strategy, the most commonly used innovational theories are Blue ocean
strategy and Disruptive Innovation Theory. In case of innovational theory, there are various
innovations being developed every day and some innovations plays a very important role in
selecting the group of individuals.
MAIN BODY
Innovation Theory
Definitions, Principles and Processes of the theory
Blue Ocean Strategy: In context to blue ocean strategy, it basically refers to the market for a
product where there is very less competition or no competition. The major focus on this strategy
is that it revolves around searching for the business where only few organizations operate and
also it does not comprises of pricing pressure. In reference to Starbucks, the organization sold a
retailing concept, where the drinks are made up with quality beans, coffee bar, ices, syrups and
flavoured milks. In reference to Starbucks, the organization is considered to be one the best and

the excellent example of the organization who has successfully implemented the Blue Ocean
Strategy. In relation to blue ocean strategy, it makes the organization to come out of the Ocean of
bloody competition through creating a market space (Mousavi, Bossink and van Vliet, 2018).
Principles of Blue Ocean Strategy
In reference to blue ocean strategy, it basically comprises of the six main principles
which could help in providing guidance to the organizations through execution and formulation
of their Blue Ocean Strategy in a opportunity maximizing manner and systematic risk
minimizing. In reference to the blue ocean strategy formulation, it involves the following
principles:
Focus on the big picture, not the numbers: In reference to the company's strategic planning
process, it basically pay much more emphasis on the incremental improvements for the purpose
to create value innovations. With the help of this principle, it really helps in tackling the planning
risk (Kavadias and Hutchison-Krupat, 2020).
Reconstructing market boundaries: In context to this principle, it basically helps in identifying
the paths through which the managers could systematically create uncontested market space
across diversity industry domains. It basically helps the company in making the competition
irrelevant through looking across the various six conventional boundaries.
Overcoming key organizational hurdles: In case of the tipping point leadership, it generally
shows managers and how to mobilize the company for the purpose to overcome the key
organizational hurdles which could result in implementation of the blue ocean strategy (Choo,
Narayanan, Srinivasan and Sarkar, 2021).
Reaching beyond existing demand: In order to create the greatest market of new demand, it is
very important for the managers of the organization to challenge the conventional practice of