Successful trailblazing organizations will attract competition, creating a red ocean. Challenging an industrys conventional wisdom about which buyer group to target can lead to the discovery of new blue ocean. The book mostly borrows from a range of over 140 strategic marketing moves within a period of over a century. Pdf impact of blue ocean strategy on organizational. Innovation, new market space and creating demand are central characteristics. For that there is nothing better than something called the blue ocean strategy. Red ocean marketing focuses on competition in the existing market space by directly competing with others. Chan kim and renee mauborgne, the writers of the 2005 book blue ocean strategy. Techniques for analyzing industries and competitors. But gradually this blue ocean market became red ocean as many other companies like hyundai and chevrolet entered the market. Their book teaches readers how to create uncontested markets for. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. Ideal for strategy lectures or strategy analysis introduction, impress your audience with this appealing slide. The strategy clearly brings out the fact that the only way to beat competition is to stop trying to beat it.
Long enough to describe the strategy and explain the pitfalls, but not padded too far. Compare your business with competitors by drawing your as is strategy canvas. Blue ocean strategy is a book published in 2005 and written by w. That is the ultimate ocean a for profit company wants to stay afloat in even if it takes transition from blue to red or somewhere in the middle. Each industry underwent continuous upheaval, each time spurred by a blue ocean strategy that 1 reduced factors unimportant to buyers, 2 increased factors important to buyers, 3 expanded the market. Red ocean strategy ways to write a blue ocean blog ideally, we all want to create blue ocean blogs that make the competition irrelevant. Essay about blue ocean strategy 825 words bartleby. The following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy. We will introduce the aspects of red ocean strategies that most of the companies use around the world, and then we will compare the advantages and. Blue ocean strategy challenges companies to break out of the red ocean of bloody. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w.
Blue vs red ocean endicott masters in international admin. Sarah layton in blue ocean strategy on april 21, 2009. Just as blue ocean strategy claims that a red ocean strategy does not. How to create uncontested market space and make the competition irrelevant blue ocean strategy. I wish i could say my own pursuit of enlightenment led me to chan kim and renee mauborgnes masterpiece on embracing and leveraging difference. Blue ocean strategy blue ocean strategy introduction blue ocean strategy is a marketing book by w. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. It is worth noting the organizations will move between blue oceans and red oceans over time. It is a book that lightheartedly spells out the reason why businesses need to be thinking at another level. Blue ocean strategy is a strategy that advice companies to go to a new market, which interest customers and avoid competition from the existing market. To create a blue ocean strategy, organizations must be committed to value innovation. Red oceans, the current state of hotly contested industries are a constant battlefield of lowering cost structures, comoditisation of products and services and increasing competition.
Blue ocean strategy the blue ocean approach is a strategic tool that helps innovation strategists asses current and desired future strategic states whereasred ocean is a current state. A business model describes the rationale of how an organization creates, delivers, and captures value economic, social, cultural, or other forms of. I wish i had bought starbucks stocks a year ago or even few months ago. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was. The expanded edition of blue ocean strategy, is metaphorical, witty, and almost biblical in its commentary of the bloody waters of competitive red ocean market forces. The signaltonoise ratio of business books generally tends towards zero. The red oceans are the markets where sharks fight for their share, while the blue oceans, competition is irrelevant. Blue ocean strategy is when an organization breaks away from the conventional approach to facilitate the creation of new uncontested market space thereby making competition irrelevant.
The premise of the book is that companies can succeed by creating. An introduction to blue ocean strategy mba knowledge base. The fundamental premise of the blue ocean strategy is that as opposed to continuing to compete in the red ocean, you should try to find new space in which to sell your goods and services. I believe that the blue ocean strategy is intended more for mnes because it may require more resources to survive and be successful in those markets. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w. Blue ocean strategy is a new way of thinking, a new strategic mindset, a bold new path to winning the future.
Blue ocean strategy is a bad book, but it is not your usual bad book. Solved complete the application matrix to compare blue. But despite the difference in form or function people go to the restaurant for the same reason they go to the. To complete the matrix should include the following. The blue ocean strategy works to create an untapped marketplace outside of the traditional market boundaries. The blue ocean strategy means that you find some aspect of your market that no one is doing, and try to dominate that, rather than fighting it out with other vendors in your space a red ocean strategy. Blue ocean case study on blue ocean strategy johnson. The strategy canvas provides a highly visual tool to help look at future options. Blue ocean shift is the essential followup to blue ocean strategy, the classic. How to create uncontested market space and make the competition irrelevant, professors w. They represent businesses that may not be around today, or werent around until they came on to the scene.
In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Not least of which, they have introduced the strategy canvas, a simple methodology to compare a business to a benchmark or similar industry. With a focus of not just beating your competition but making them irrelevant, blue ocean strategy is all about thinking outside the box. How to create uncontested market space and the make competition irrelevant 2005. Blue ocean strategy including examples and pdf download. Blue ocean strategy powerpoint template sketchbubble. Impact of blue ocean strategy on organizational performance. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. The authors found that most red ocean strategies take the current industrys. When a companys strategy is formed reactively as it tries to keep up with the competition, it loses its uniqueness. This strategy can work in the short run but it is a lot wiser for people to fast embrace the blue ocean strategy. In this way, it swam into a blue ocean, offering a plastic watch at a price that allowed people to purchase two or three watches at one time.
Cirque created what the authors call a blue ocean, a previously unknown market space. In studying more than 150 blue ocean creations in over 30 industries, the authors observed that the traditional units of strategic analysiscompany and industryare of limited use in. The blue ocean strategy concerns itself with creating uncontested market space. Red ocean looks at cost saving or differentiation while blue ocean focuses on doing both. This is the holy grail that marketers have been seeking since we began thinking about product differentiation, market segmentation, positioning, and all the. With this understanding of the link between blue ocean strategy and blue ocean leadership, we define blue ocean leadership as creating a leap in leadership strength fast and at low cost to release organisations ocean of unrealised talent and energy. They are the authors of the book blue ocean strategy. Chan kim and renee mauborgne talk about ways to create uncontested market space while making the competition irrelevant. Blue ocean strategy red ocean strategy blue ocean strategy virgin cola red bull competed vs. In red oceansthat is, in all the industries already existingcompanies compete by grabbing for a greater share of limited demand. Often products or services from seemingly different industries can be a substitute for what your company offers cinemas and restaurants have few features in common. In the evercompetitive online space, we tend to stumble upon the same articles over and over again. To ask other readers questions about blue ocean strategy, please sign up. Compared with red ocean strategy, blue ocean strategy represents a significant.
The book succeeds in showing how businesses, can outdo their competitors. How to create uncontested market space and make the competition irrelevant. Pros and cons of blue ocean strategy essay example. Blue ocean strategy is a strategy to create new opportunities where the rules over pricing, technology and disruption have not been set. There is ample opportunity for growth that is both profitable and rapid. At least five characteristics on which you will compare the two strategies, and list them in the column labeled characteristics in the threecolumn application matrix. Blue ocean strategy the maturity of an industry has brought a company swimming in a red ocean, which means price war strategy, according to a bestseller book titled blue ocean strategy that is written by w. Written by the business worlds new gurus, blue ocean strategy continues to challenge. In their bestselling book, blue ocean strategy, authors w. Buy blue ocean strategy, expanded edition revised ed.
Red ocean and blue ocean strategies comparison table. This was the time when maruti redesigned its strategies and came up with a middle level car swift. Each table is created as powerpoint tables, and are 100% editable. By low cost here we refer to time, as time is the most expensive and limited resource of leaders. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30. Let me try to explain this in simple terms for the benefit of everyone. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy, expanded edition. Chan kim and renee mauborgne in their book blue ocean strategy. Blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as every organization carries the motive to earn higher profits. How to create uncontested market space and make the. This blog article is a overview of some of the key points of the book by w. It was selected as one of the best books of 2005 by fast company. A blue ocean strategy may come out of a red ocean strategy.
Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Blue ocean is a term used for uncontested market space compared to the red ocean that stands for the market space badly contested by battling competitors according to w. Blue ocean vs red ocean strategies 6 major differences. Blue ocean strategy, the suggestion that cirque du soleil created an uncontested market space by innovating their entertainment service is not a good suggestion. Let us say the market that we operate is an ocean cle. Highly recommend this book to all the guys who want to make difference in their career. In blue oceans, demand is created rather than fought over. Compete in existing market space create uncontested market space beat the competition make the competition irrelevant exploit existing demand create and capture new demand make the valuecost tradeoff break the valuecost tradeoff align the whole system of a firms activities with its strategic choice of differentiation or low cost. In a blue ocean because of the uniqueness of your offering you are able to service your customers in uncontested at least for now space. There are two types of oceans in this world, according to authors w.