Exporting Blue Bottle Coffee
Introduction
Blue Bottle Coffee Company has enjoyed a very successful experience in the United States, where it operates as a coffee roasting and retailing company. The company has its headquarters in Oakland, California. Blue Bottle Company was found in 2002 by James freeman (Freeman, Freeman, & Duggan, 2012). James started roasting his drinking coffee at his home before he later started selling coffee around the farmers market in San Francisco and Oakland. It was not until James had 30 to 40 customers waiting for his coffee in line that he realized he could turn it into a business. Since then, the company has grown and has opened numerous stores spread in many areas in the United States.
The purpose of this project is to prove the reason Blue Bottle Coffee Company should export. The company has been making a lot of money as its sales are glowing, and the investors prefer to invest in this company. In 2012, for example, the company acquired $20 million in venture capital investment. In 2015, the company accomplished a venture capital round, raising $70 million and above from investors led by Fidelity. These start Cleary shows the company has what it takes to export its product abroad. Nestle, which is referred to as the world’s largest drinks company, corroborated with Blue Bottle Company acquiring the majority stake of the company. With Nestle being a multinational company, it gives Blue Bottle an opportunity to export its product and services to other countries rather than just operating in the United States. If the company starts shipping will have several advantages; the company will increase its sales; the company will get more investors from other countries. This will result in the company making huge profits. Since the company has resources and the opportunities are available as, for example, it has the support of Nestle, which is famous globally, it should be exporting its products.
Export policy commitment
Our company believes in satisfying our customers by providing quality, standardized flavors at reasonable prices. We focus on acquiring our low materials from quality coffee growers approved by the ICO to ensure our customers get the best coffee ever.
Situation Analysis
After we analyzed the most coffee drinkers globally, we found that the United States is not even top ten in that list. This brought us to the conclusion that Blue Bottle company has a lot of opportunities that it needs to take advantage of and increase its sales. This was to start exporting coffee products to the countries where it is mostly drunk. Some of these countries included Finland, which is ranked first with a consumption rate of 12 kgs per capita together with others in the list of top ten, including Netherlands, Belgium, Norway, Iceland, etc. However, before taking this idea of exporting Blue Bottle Coffee, we had to analyze several things before recommending international export in the company, which included the following;
Product or service
After analyzing the product produced by the company, We found that the company was capable of producing products that can cater for the demand of the local markets and also the international markets; however, we suggested the company to start first with export to about two countries as they study the global markets and the rate of demand. Belgium and the Netherlands are some of the countries we found with a high demand for the product, and we suggested the company to start with them.
Operations
The company will have to identify the various operations required both at the organization level and the level of the international market. The company will first identify their consumers in the country of export. The company will then locate areas to temporarily build or hire stores where some of its products will be stored awaiting to be derived from their clients. The company will also be shipping products direct to clients’ places from Oakland when ordered in bulk.
Personnel and export organization
The company had a great advantage as it hires supervisors and managers who are experienced and who, in most cases, are conversant with different languages. This will be an added advantage as the company had several managers who had worked with exporting companies, and they had the experience. These could be shifted to manage the export activities supervising junior workers who will be hired to help in various works such as sorting and transporting products to clients’ places of work if need be. The organization will lay structured measures to ensure exported good is well handled to reach the clients in good condition.
Resources of the firm
Blue Bottle Company has enough resources to conduct export. The company has big warehouses that can hold large volumes of raw materials and manufactured goods. This will enable the company to have a place to store products awaiting shipping or sale. The company has a considerable number of employees and also has required capital to add more employees.
Industry structure, competition, and demand
Although several companies export roasted coffee, such as Starbucks, Blue Bottle Company is having the advantage of having Nestle, which is famous globally on its side (Kahiya, 2013). Through Nestle, Blue Bottle will have the strength to outsmart its competitors. The demand for the product has also increased in many countries that the companies are not able to provide enough to the consumers. This will enable the company to venture into the market with less computation, which will give it a significant likelihood of making new customers.
Marketing components
After conducting our research before recommending that the company should start exporting, we had to look at the following marketing components to ensure the company would prosper in exportation.
Identifying, Evaluating, and Selecting Target Markets
In our research, we found that there existed countries where the coffee drinking rate was higher compared to the United States, where the company operates. From the analysis, we found that most of those countries rely on imported coffee as they don’t produce their coffee. In Europe, countries like the Netherlands and Belgium are ranked among the top ten coffee drinking countries, but coffee is not produced in their countries (Murthy, & Naidu, 2012). Here we find their existed high demand for roasted coffee. Restaurants and hotels emerged to be the targeted markets; the demand was high. This led has to propose that the company should start by exporting the coffee to be sold in those hotels and restaurants as they needed the product.
Product Selection and Pricing
The Netherlands, for example, we found that they prefer flavored coffee. This was a big step as the company new that in the Netherlands, the coffee exported should be flavored so that it could be readily accepted in the market (Köksal, & Özgül, 2010). The biggest advantage was that in the countries we researched, it was only Canada where we realized that the price of a coffee per kg was lower compared to the current price of coffee in the United States where the company operates. Hence the price will shift high I other countries, which will be a big boost to enable the company to cover the shipping cost incurred as an extra cost.
Distribution Methods
The raw material will be acquired from the original sources. The manufacturing of the product will also take place in the original manufacturing center. One the good for export are manufactured and branded. The goods will be transported to the countries identified for the export. These goods will be stored in the temporal stores awaiting purchase. The ordered goods will be shipped to the clients’ places direct from the Oakland headquarters.
Terms and Conditions
The terms and conditions for the company are goods once sold are not refundable. The order placed also is not to be canceled, and if canceled, a negotiable fee is to be paid by the clients.
Internal Organization and Procedures
The organization has strong internal policies that help to tame the behavior of the employees. The employees are required to be morally upright and work towards goals achieved. The employees are required to get orders from their seniors in their designated areas.
Sales Goals: Profit and Loss Forecasts
The company expects to incur some losses before they adapt to the international market sale. However, the company expects to gain customer trust after creating brand awareness, and they will be hoping the sales to skyrocket, resulting in high profits in the future.
References.
Freeman, J., Freeman, C., & Duggan, T. (2012). The Blue Bottle Craft of Coffee: Growing, Roasting, and Drinking, with Recipes. Ten Speed Press.
Kahiya, E. T. (2013). Export barriers and path to internationalization: A comparison of conventional enterprises and international new ventures. Journal of International Entrepreneurship, 11(1), 3-29.
Köksal, M. H., & Özgül, E. (2010). The competitive export advantages of Turkish manufacturing companies. Marketing Intelligence & Planning.
Murthy, P. S., & Naidu, M. M. (2012). Sustainable management of coffee industry by-products and value addition—A review. Resources, Conservation, and recycling, 66, 45-58.