Is Mcdonalds expanding into the McCafe business considered a blue ocean strategy?
To determine whether McDonald's expanding into the McCafe business can be considered a blue ocean strategy, we need to understand the concept of blue ocean strategy.
Blue ocean strategy, introduced by W. Chan Kim and Renée Mauborgne, is a concept that refers to creating new market spaces that are uncontested by competitors, rather than competing in existing markets ("red oceans"). In a blue ocean strategy, companies aim to create and capture new demand, offering unique value and differentiation.
In the case of McDonald's, expanding into the McCafe business involves entering a market that already exists – the specialty coffee segment. This market is highly competitive, with many established players like Starbucks, Dunkin' Donuts, and local coffee shops. Therefore, McDonald's entry into the McCafe business is not a classic example of a blue ocean strategy.
However, it is worth noting that McDonald's was able to differentiate itself within the coffee segment by leveraging its existing infrastructure and customer base. By offering affordable and convenient coffee options, McDonald's targeted a larger consumer base beyond traditional specialty coffee consumers. This strategy allowed it to capture some untapped demand and gain a competitive advantage over fast-food competitors that did not offer a similar coffee experience.
So, while McDonald's entry into the McCafe business may not be a pure blue ocean strategy, it does demonstrate elements of strategic differentiation and market expansion that align with blue ocean principles.