Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make. Essay about blue ocean strategy 825 words bartleby. Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level. Blue ocean vs red ocean strategies 6 major differences red bull case study published on june 2, 2016 june 2, 2016 91 likes 5 comments. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. This strategy can work in the short run but it is a lot wiser for people to fast embrace the blue ocean strategy. Jun 14, 2014 blue ocean strategy, create new markets and leave the competition behind renee mauborgne wobi duration.
Blue ocean strategy is a book published in 2005 and written by w. Impact of blue ocean strategy on organizational performance. Chan kim and renee mauborgne in their bestselling book of the same name. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant.
Let me try to explain this in simple terms for the benefit of everyone. The strategy clearly brings out the fact that the only way to beat competition is to stop trying to beat it. Strategy and thinking is not limited by preconceived barriers, and a shift happens from a focus on the supply side to a focus on the demand. Blue ocean strategy this strategy was made popular by kim and mauborgne in 2004. Netflixmarketentry, diffusion, dominanceand iplessonslearnedandfuturechallengesinthe. The structure can be created or recreated by the steps taken by players in the market. In a red ocean market, everyone is just talking a different version of the sames thing to the same group of people vs a blue ocean where you guide new people over to your primary program. Blue ocean strategy and sustainability for strategic management. In red ocean companies try to surpass their rivals to take hold of a greater share of existing demand. Blue ocean strategy introduces analytical tools to minimize risk. Some strategic planning models are based on theories that dont quite pan out during gotomarket executions. Companies should instead look for new market space and ways to reinvent the industry. Pdf impact of blue ocean strategy on organizational.
Tools and frameworks for creating and capturing blue oceans it is constructed to create a new value curve and when you apply the four actions framework to the strategy canvas of your industry, you get a. An analytical study of red ocean and blue ocean strategy with. The blue ocean strategy concerns itself with creating uncontested market space. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. Innovation, new market space and creating demand are central characteristics. Every blue ocean move will ultimately turn into a red ocean. But we believe that a blue ocean move will give the company a head start it requires to understand and conquer the existing competition.
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. Competition will ultimately catch up but it typically takes about. In red oceans, there is a competitiveadvantage worldview, companies are often driven to outperform rivals and capture greater shares of existing or shrinking market space. Red ocean strategy and blue ocean strategy youtube. Chan kim and renee mauborgne in their book blue ocean strategy.
Blue ocean strategy chapter 14 the four action framework chapter two. Blue ocean strategy makes companies to come out of ocean of bloody competition by creating market space which is uncontested and that makes the completion irrelevant. An introduction to blue ocean strategy mba knowledge base. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to. Blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing costs. List the factors the customer cares about, and current dimensions of competition. Blue ocean strategy summary click here to read this article. 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. Blue ocean strategy is a business strategy book, first published on february 3, 2005 by the harvard business school press. Blue ocean strategy formulation the four principles of strategy formation click here to read this article. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. This blog article is a overview of some of the key points of the book by w.
Red ocean in blue oceans, demand is created rather than fought over. Pdf blue ocean strategy download full pdf book download. In this 5 minute blog, ill tell you what the difference is between a red ocean vs blue ocean and how you can survive a red ocean and swim into a more profitable and audible blue one. Red oceans are all the industries in existence todaythe known market space. Blue ocean vs red ocean strategies 6 major differences. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. The premise of the book is that companies can succeed by creating. The bluest ocean strategy for emerging ict business.
Value innovation strategy competes in an uncontested market space. Chan kim and renee mauborgne, published by harvard business school press, boston, massachusetts, 2005, isbn 97815996192 blue ocean strategy is a business strategy book, first published on february 3, 2005. Blue ocean strategy including examples and pdf download. May 31, 2016 instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. This international bestselling book sold more than a million copies in its first year of publication, and has. Those who want to create a blue ocean strategy for their company must focus on value innovation that makes the competition irrelevant by the simultaneous pursuit of differentiation and low cost, thus creating a leap in value for the customers and an uncontested market space for the company. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. In this case, redbox knew there was an opportunity in dvd rentals outside of what the biggest players were doing today.
Blue ocean strategy coexists alongside red ocean strategy competitive strategy. It uses a combination of patents, trademark, and trade secrets to protect its intellectual property. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. We use the terms red and blue oceans to describe the market universe. In contrast, blue ocean strategy originated from a study that took place over 10 years and analyzed company successes and failures in more than 30 industries. Blue ocean strategy is a landmark idea founded by w. A blue ocean offers new opportunity for profitable and rapid growth to an entirely new market. The elimination reduction improvement creation net 4. I have recently been reading up on the rise and huge success of netflix and how they used the blue ocean strategy to change the rules of the game.
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. However, the price competition only results in a red. Jul 16, 2015 the blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. The on the blue ocean strategy essay 1969 words 8 pages. Olabode samuel adeola capella university introduction. Put simply the blue ocean strategy is innovating in ways which make your competition irrelevant. Redbox has found a way, by finding blue ocean a new way of thinking among the crowded red ocean movie rental industry. How to create uncontested market space and make the competition irrelevant, a book by professors w. Chan kim and renee mauborgne, professors at insead. How to create uncontested market space and make the competition irrelevant by w. History and background a video game console is just a computer that is made only. Jul 14, 2009 redbox has found a way, by finding blue ocean a new way of thinking among the crowded red ocean movie rental industry. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies.
Jul 28, 2018 blue ocean strategy was coined by professors w. Since, dividing up existing demand and benchmarking the competitors, blue ocean strategy is regarding grow demand and break away from the competition. These systems started to gain popularity in the 1970s with consoles that played only pong. Blue ocean strategy has helped numerous companies and organisations across the globe to create new market space and achieve pro. Blue ocean strategy and sustainability for strategic. We believe that blue ocean strategy will send you on the right path towards creating your own uncontested space. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. May 16, 2016 i have recently been reading up on the rise and huge success of netflix and how they used the blue ocean strategy to change the rules of the game. May 26, 2015 summary of the first four chapters of the international bestseller blue ocean strategy. Red ocean strategy is a strategy which aims to fight and thrash the competition.
Redbox and coinstar because of its strategies of market entry, diffusion, domination and its revolutionary patented business model. Let us say the market that we operate is an ocean cle. Apr 30, 2016 red ocean strategy is a strategy which aims to fight and thrash the competition. The strategy canvas visualizes the current state of the industry and shows how a blue ocean strategy differs from incumbents. A different concept of market grabbing, is something called blue ocean. Pdf harvard business school press blue ocean strategy. There is ample opportunity for growth that is both profitable and rapid. The blue ocean approach is based upon the concept of value innovation which was also introduced by the authors of the blue ocean strategy, kim and mauborgene. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue.
An analytical study of red ocean and blue ocean strategy. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. 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. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. May 30, 2017 it reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. Most blue oceans are created from within red oceans by expanding existing industry boundaries.
When expressed through a value curve, an effective blue ocean strategy has three complementary qualities. This study will also examine the case study of redbox and glaxosmithkline to help examine successful companies who have adopted these innovation strategies and how the chosen innovation strategy has shaped their futures. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30. Welcome to blue ocean strategy were thrilled to have you on board. The key was finding a competitive position that would meet an unmet need. Achieved via the delivery of features that have a highest marginal benefit to customer needs.
Click here to download the blue ocean strategy summary pdf. This framework addresses not only the analytic aspects behind the creation of blue ocean strategy but also the allimportant human aspects of how to bring an organization and its people on this journey with a willingness to execute these ideas in. They represent businesses that may not be around today, or werent around until they came on to the scene. A red ocean is a metaphor for a market full of competitors. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group.
Set sail towards your blue ocean jk beteiligung gmbh. Summary of the first four chapters of the international bestseller blue ocean strategy. Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Made by group d of the minor global trendwatching 2015. How to create uncontested market space and the make competition irrelevant 2005. Netflix has a competitive edge in the dvd rental industry over competitors such as blockbuster, redbox and coinstar because of its strategies of market entry, diffusion, domination and its. Sep 24, 2017 in 2005, blue ocean strategy, expanded edition. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. Blue ocean strategy, the global phenomenon that has sold over 4 million copies and is recognized as one of the most iconic and impactful strategy books ever written, argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. A third tool, the eliminatereduceraisecreate grid, pushes firms to act on all four questions posed by the four actions framework and to create a new value curve.
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