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Story/ History of Blue Bottle Coffee

Blue Bottle Coffee is a coffee retailer and roaster founded and headquartered in Oakland, California in the United States. The company begun its operations in 2002 (Huddleston, 2019). The story behind the founding of this brand is often narrated as part of the firm’s culture. From the firm’s website, the company was inspired by the apocryphal tale of the late 1600s when the Turkish army terrorized Central and Eastern Europe (The Blue Bottle Coffee, 2021). The selfless sacrifice of Franz George Kolshitsky and his bold decision to disguise himself and bypass the Turkish army to reach Poland and rescue Vienna from the Turks made him a hero. The decision by James Freeman to establish the company in 2002 was motivated by a desire to go against conventional practices where coffee shops sold overly roasted and stale commercial coffee beans. He decided to offer a differentiated value proposition by vowing to sell coffee fresh from the roaster (Close, 2020). This way, Freeman believed that his guests could enjoy coffee at its peak flavor. He further promised himself to use the finest, most delicious, and sustainably sourced coffee beans.

Three Business Strategies for taking Blue Bottle Coffee Global

To expand globally, different business strategies can be used by this company. The first target market is Brazil. Here, cost differentiation will be employed considering how the country is already a major coffee producer. Hence, it is likely that consumers will have many options to choose from. Thus, with cost differentiation, the Blue Bottle Coffee will be able to enter the market and become well established by gaining significant competitive advantage (Anne, 2017). In addition to this, the use of freshly roasted coffee will ensure that customers are enticed by the product, as compared to that which other companies will be offering. An advantage of this market is that Brazilians are considered to be among the top coffee consumers. Therefore, Blue Bottle Coffee will not lack consumers who are seeking freshly roasted, and brewed coffee. Another advantage is that Blue Bottle Coffee has already made a great name in other countries. Therefore, many will feel compelled to try out this product and compare it to their local company products. A disadvantage of this market is the fact that it is already saturated. Therefore, the company should expect stiff competition from the already established companies.

Second, the company hopes to expand to Australia using its product differentiation strategy. According to Islami, Mustafa and Latkovikj (2020), differentiation is an extremely effective business strategy that sets a business’ value proposition apart from its rivals. Blue Bottle Coffee applies this strategy as it sells coffee as soon as it is from the roaster to reach the customers in peak flavor. This is unlike its rivals who package and sell their coffee within a longer period after roasting. Additionally, Black Bottle Coffee uses the most delicious, finest and responsibly sourced coffee beans (Wong, 2021). To ensure that its brand is differentiated, Freeman locates the bottle shops near the roasting headquarters. The brand further uses the single origin beans to shorten its supply chain thus, reducing time to market. This approach to sourcing is different from regular coffee blends which are sourced from multiple sources. An advantage of this market is that the company will not fail to attract customers looking for high quality products. Also, the company already knows what others are offering. Hence, it has sufficient information to develop quality differentiated products. Disadvantages are that the market is already saturated. The company will need to work hard on its marketing and even research and development.

Lastly, the company seeks to expand into Spain, which is another market where many coffee lovers exist. Here, cost leadership strategy will be employed. The cost leadership strategy is evident in the way Blue Bottle Coffee makes efforts to achieve economies of scale. According to Islami et al. (2020), cost leadership strategy entails adopting efficient operations through large scale operations that effectively lower costs thus optimizing profitability. As much as this is not the primary strategy pursued by Blue Bottle Coffee brand, the company’s efforts at internationalization are aimed at increasing its economies of scale as it allows it to source more coffee which increases its bargaining power. The end result is a reduced cost of acquiring the beans and other resources. The pros of cost leadership as applied by Blue Bottle Coffee include; reduced competition as rivals are afraid of engaging in price wars. Secondly, the strategy has been helpful in attracting a larger market share for the coffee brand. On the downside, the strategy has diluted the brand value of Blue Bottle Coffee customers as most customers associate low prices with poor quality. A benefit of this market is that the customers are willing to spend as long as they get a high quality product. However, there is a disadvantage in the sense that customers are already loyal to the companies available. Hence, it will take a lot of effort to develop a relationship with them.