Blue ocean strategy is a marketing theory in which a business enters a market that has little or no competition. Blue ocean strategy formulation the strategy canvas. Click the link above to read the key concepts and everything you want to know about the blue ocean strategy. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy, expanded edition. In the early stages, business objectives are usually fairly simple. A blue ocean strategy posits that when a customer changes the purpose of purchasing, a new market is created. Blue ocean strategy definition marketing dictionary. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking.
This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. In red oceans, industry boundaries are defined and accepted. It requires the right research, patience and focus. The strategy focuses on moving away from an existing market and seaching for new markets.
The seminal book blue ocean strategy has sold over 3. Companies should instead look for new market space and ways to reinvent the industry. By that we can see that there is a lot of interest by the business people and academics around the world about that subject. Blue ocean strategy bos introduction to bos bos tools. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. Examining the emergence and evolution of blue ocean strategy.
The rapid pace of innovation and change in recent years has led scholars and executives to search for an approach to strategy that is more dynamic than harvard professor michael porters classic five forces. How to create uncontested market space and the make competition irrelevant 2005. Blue ocean strategy is a concept that has been pioneered by insead professors, w. The concept of ideal strategy and its realization using white ocean. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30. Chan kim and renee mauborgne in their book blue ocean. Here, the market structure is yet to be decided, so the price competition is far less intense.
It is a great way to mobilize thinking around new differentiators value creation. Red oceans represent all the industries in existence todaythe known market space. It is the idea of trying to find market spaces that are free of competitors by creating and caputuring new demand. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Learn the definition of blue ocean strategy and the meaning of creating blue oceans here. This blog article is a overview of some of the key points of the book by w. In other words, the definition of a blue ocean strategy is creating a new. Blue ocean is a strategy of innovation in new market space where competition does not exist. The idea in brief the best way to drive profitable growth. The authors discuss the benefits for business owners to leave the red ocean. Companies pursue blue ocean strategies to make competition irrelevant.
Chan kim and renee mauborgne wrote a bestselling book, blue ocean strategy, which has been translated into 43 languages. 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. This blog article is part of a series on the book blue ocean strategy by w. Much of business strategy in the past few decades has focused on competition, including michael porters five forces and swot analysis. To understand red ocean strategy let us begin by defining blue ocean strategy.
Identify actions to actualize the strategies conclusion facilitators. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make. Blue ocean strategy bos is a framework which inspires to innovate and develop new demand and new markets to sell your products instead of fighting with competition over the same market share and satisfying the same demand which is typically done in a red ocean strategy ros. This post defines blue ocean strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. This article explains the blue ocean strategy, developed by w. By identifying untapped or at least less tapped product markets where unique buyer segments and needs can be identified and satisfied, blue ocean. Blue oceans strategy is the approach that suggests a company is better off searching for ways to play in uncontested market places instead of engaging with competition in existing marketing spaces. Blue ocean strategy ppt slides by yodhia antariksa 60197 views. Pdf blue ocean strategy as a tool for improving a companys. Blue ocean strategy and its implications for businesses. Blue ocean strategy er et ledelsesbegreb fra erhvervslivet formuleret af professor w.
The concept of blue ocean strategies is new in the business world as it was first published in 2005 in the bookmanual blue ocean strategy, by w. The insead blue ocean strategy institute is dedicated to extending the research on blue ocean shift, blue ocean strategy, and blue ocean leadership by chan kim and renee mauborgne and disseminating it to professors, researchers and practitioners around the globe. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy is based on the idea that every enterprise can achieve higher profit by creating new demand in noncompetitive market so called blue ocean. The on the blue ocean strategy essay 1969 words 8 pages. What is blue ocean strategy about blue ocean strategy. Importance of the blue ocean strategy to a business. Blue ocean strategy can be applied across sectors or businesses. This new market space is created by launching new offerings, with the aim being to make the competition irrelevant so that an organization can grow, uncontested, at least in the beginning. Essay about blue ocean strategy 825 words bartleby. This indicates that the term has become part of the terminology in the field of strategy and management. 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.
Blue ocean strategy is a new way of thinking, a new strategic mindset, a bold new path to winning the future. 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. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w. For example, and individual may purchase cloths of a vehicle for its functional purpose. Value innovation strategy competes in an uncontested market space. Red oceans are described as all the industries in existence today. Blue ocean strategy is where a company creates a completely new market space or market category. The structure can be created or recreated by the steps taken by players in the market. Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. Blue ocean strategy is a method of creating business strategy of the enterprise, which was described in a book by w. Blue ocean strategy including examples and pdf download.
This book brings the best of those articles together all in one place. Strategies are correspondingly simple as well, and are often not even. This strategy, which is based on extensive research of hundreds of companies spanning across decades and including several industries, proclaims that instead of battling competitors, companies can create new markets for themselves. The text offers a practical handbook to business students and entrepreneurs who wish to rise above the fray of the competition, become pioneers in previously uncharted market territory, and gain access to impressive growth opportunities and an. Red oceans represent the traditional existing industries and known market space, where industry boundaries are defined and accepted. Blue ocean strategy is a powerful framework for finding new business opportunities. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are well understood. If that individual changes purchasing habits based upon aesthetics or fashion, there is a new customer market. An introduction to blue ocean strategy mba knowledge base. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world.
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. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Strategy is, very simply, an outline of how a business intends to achieve its goals. One of the most successful efforts to do so is the book blue ocean strategy, by w. Blue oceans, in contrast, denote all the industries not in existence today the unknown market space, untainted by competition. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades. Based on a study of 150 strategic moves, spanning more than 100 years across 30 industries, the authors, chan kim and renee mauborgne show that lasting. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. But its not always clear how to create a blue ocean strategy for yourself. In red oceans, industry boundaries are defined and accepted, and the. 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. Blue ocean strategy displays an orderly way to deal with making the challenge unessential and traces standards and instruments any organization can use to make and catch their blue seas.
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. Blue ocean strategy presentation by ajay mohan goel 22067 views. How to create uncontested market space and make the competition irrelevant pdf by w. Chan kim and renee mauborgne in their book 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. After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. Reviewing the blue ocean strategy university of twente student.
Blue ocean strategy refers to the building of a new, uncontested market space that makes competitors irrelevant. The profit is much easier than the rivalry with the. It refers to the clear blue water color that is not contaminated or infected by the bloody red color of water 14. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool.
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