Industry Analysis of Blue Bottle Coffee’s Planned Entry Into the Canadian Market

An Industry Analysis of Blue Bottle Coffee’s Planned Entry into The Canadian Market Through Porter’s Five Forces
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An Industry Analysis of Blue Bottle Coffee’s Planned Entry into The Canadian Market Through Porter’s Five Forces
Blue Bottle Coffee is a specialty coffee roaster that was founded by James Freeman in 2002 to cater to the growing market for high-quality beans sourced from individual farms. The specialty coffee company has several outlets in New York, San Francisco, Boston, Washington, Hong Kong, Kobe, Seoul, and Yokohama, among other Asian cities (Kim & Park, 2021). This essay will use Porter’s Five Forces model to analyze the competitive forces in the Canadian coffee market and therefore the attractiveness of expanding to Canada. The first force relates to threat of new entrants: Blue Bottle Coffee is unlikely to experience a lot of competition from new entrants owing to the high barriers of entry in the specialty coffee sector. Specialty coffee companies rely on extensive and reliable supply networks, which usually take years to develop. The company has developed international distribution channels capable of facilitating significant economies of scale. This is an advantage that new entrants may find challenging to replicate: it takes time and a lot of resources to cultivate supply networks capable of selecting the highest quality of coffee beans.
The second force is bargaining power of buyers. Blue Bottle Coffee’s buyers have a strong bargaining power. The company’s target market consists of educated high-income coffee connoisseurs who are not only interested in the quality of the coffee but are also focused on more subjective traits like the ambience of the company’s stores, brand identification, corporate social responsibility, and environmental sustainability (Yokoi, 2022). These customers are choosy and will quickly pick another specialty coffee company that meets their quality standards and brand perception if Blue Bottle Coffee fails to fulfill their demands. The third force is bargaining power of suppliers. Blue Bottle...