Managing Innovation: Blue Ocean Strategy and its Application in Starbucks

Managing Innovation
Assessment

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
Innovation theory- Blue Ocean Strategy................................................................................1
Company background.............................................................................................................4
Historical development...........................................................................................................5
Future development................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Innovation refers to the process of introducing new idea, workflows, methodologies,
products and services in an organisation. Innovation brings an improvement in an existing
products and services so that it can reach put to the maximum customers as possible and enhance
their experience(Thøgersen, 2021). The purpose of the innovation is to create value for a
business concern which provide revenue generating opportunities and improve productivity as
well. Therefore, by managing innovation, an organisation can discover the new products, reduce
costs and able to enhance the development process. The report will focus upon the theory is blue
ocean theory and discuss its principles and process. Further, It will explain the benefits and
limitations of the blue ocean theory and its application to the organisation. Moreover, it will
explain the background of the company and the historic development of the products and
services. It will also explain the future development of the products and services of the company
for creative ideas. Then, it will provide summary and recommendation of the report for the
selected company.
MAIN BODY
Innovation theory- Blue Ocean Strategy
Definition
The Blue Ocean Strategy refers to the strategy when there is no competition in the market
or is very less competition for the product of an organisation(Si, Kavadias, and Loch, 2022).
With this strategy, the company is able to create a viable business model and ensure profit from
the strategy.
Principles and process of theory
There are some principles of the Blue Ocean Strategy that assist the business organisation
to formulate and execute the strategy in minimising the risk and exploit new opportunities. The
principle are described as under:
 Reconstruction market boundaries: An organisation is required to explore for the new
opportunities that are beyond the practice and norms of the market for reconstruction of
the boundaries. It teaches the company to make competition irrelevant by looking other
conventional boundaries.
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 Focus on big pictures instead of numbers: This principles states that a leader is required
to break away from conventionality(Szostak, Laviolette, and Burger-Helmchen, 2021)
They are on conscious about searching of new opportunities and strive to find the best
ways by sticking to the rules that are commonly mentioned in red ocean strategy.
 Reach beyond exiting demand: The manager is needed to challenge the conventional
practice in order to create the greatest market for the new demand. This help in making
the fine segmentation and knowing the preference of the customers to meet their demand.
 Get the strategic sequence right: This strategy help in following the systematic
framework which includes the blueprint(Shaikh, and Randhawa, 2022.)(.. It is composed
of the four elements such as buyer utility, price, cost and adoption that are considered as
sequential steps.
 Overcome key organisation hurdles: There are many hurdles in adopting the blue ocean
strategy where a leader has to overcome the cognitive, resource, motivational and
political hurdles in order to be effective decision maker in spite of limited time and
resources.
 Build execution into strategy: The blue ocean strategy shows a need to build execution
in the strategy because it represent the departure from the situation. Therefore, a fair
process is required for strategy making and execution(Acharya, and et.,al, 2022). It
mobilises people for the voluntary cooperation that bis require to execute the blue ocean
strategy and deals with the risk of management that are associated with attitude and
behaviour of the people.
Blue Ocean Framework
The following framework are depicted as under:
Six path framework
This framework assist the organisation in guiding a way to look beyond the existing
market in order to get the potential for the new market. It teaches a business concern to think
about the creativity for the existing market with the purpose of determining new value to the
market(Bahl, Lahiri, and Mukherjee, 2021). It moves beyond the attitude in order to compete the
known value driers in the red ocean.
Following are the paths in order to examine are as follows:
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