Levie shared more examples of how he and his team apply this line of thinking to citizenm. Blue ocean strategy is a concept that has been pioneered by insead professors, w. Want more secrets and tricks like the blue ocean strategy. Pdf on sep, 2015, mohammed r ahmed and others published blue ocean or green ocean strategy. 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. It views longterm competition as the main concern that business people should be. These systems started to gain popularity in the 1970s with consoles that played only pong. The fighting results in a red sea, because much of the energy is spent competing. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. It is the responsibility of the manager to analyze and put the most appropriate strategy for their business. 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. Nearest metro station samaypur badli or rithala is video me humane blue ocean strategy k bare me baat ki hai. Value innovation strategy competes in an uncontested market space. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.
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. What is blue ocean strategy about blue ocean strategy. The authors describe red oceans as the existing industries in a known market space. But many companies have done their homework and succeeded thanks to this strategy. In contrast, blue ocean strategy is about how to get out of established market boundaries to leave the competition behind. But its not always clear how to create a blue ocean strategy for yourself. Apr 27, 2012 lets focus on two of the businessworlds trending marketing strategies for electronic market space today blue ocean vs. Chan kim and renee mauborgne, professors at insead. There is ample opportunity for growth that is both profitable and rapid. Porters five forces is a very competitive marketing strategy. Blue ocean strategy including examples and pdf download.
Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. In this summary, well give a synopsis of the key concepts, tools and tips from the book. Blue ocean vs red ocean business strategies duration. Blue ocean strategy is a powerful framework for finding new business opportunities. Blue ocean strategy and its implications for businesses. 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. So blue ocean strategy is about how can any company or organization break out of the red ocean of bloody competition. Find, read and cite all the research you need on researchgate.
Chan kim and renee mauborgne, the writers of the 2005 book blue ocean strategy. 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. This industry has been in existence for a long time, and there are many barriers to entry. Specifically, these new markets give a company a very high competitive advantage as well as low pricecost pressure. History and background a video game console is just a computer that is made only. Jul 17, 2018 implementing the blue ocean strategy is, simply put, a gargantuan task.
As competition increases, prospects for profit and growth decline. They represent businesses that may not be around today, or werent around until they came on to the scene. Blue oceans denote all the industries not in existence today the unknown market space, unexplored and untainted by competition. But thats a slow process, requiring 15 years or so, which suggests that it takes the better part of a generation for the blueocean approach to yield to competitive strategy. 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. One industry in which a red ocean strategy would be necessary is the soft drink industry. Blue ocean strategy, create new markets and leave the competition behind. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space.
Bos is all about minimizing risks due to competition threat and maximizing opportunities by exploring new boundaries. How does blue ocean strategy differ from red ocean strategy. Of course, the blue ocean approach to this model would call. These competitors may possess a competitive advantage driven by cost, differentiation, or niche market strategies. Only then can companies step up to the challenge of creating blue oceans in a smart and. The authors use the terms blue oceans and red oceans to describe the entire market universe.
Levie said this is a fundamental tenet of blue ocean. The goal of a blue ocean strategy is for organizations to find and develop blue oceans uncontested, growing markets and avoid red oceans overdeveloped, saturated markets. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. This often requires overcoming an intense level of. Nov 04, 2018 want more secrets and tricks like the blue ocean strategy. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as. The result of the competition is destruction, which draws the analogy of red blood in. 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. The strategy focuses on moving away from an existing market and seaching for new markets. A marketcompeting strategy divides existing wealth between rival companies. A red ocean strategy involves competing in industries that are currently in existence.
A company will have more success, fewer risks, and increased profits in a blue ocean market. The authors conclude that the blueocean strategy or innovation approach is sustainable. Mar 19, 2015 blue ocean strategy and red ocean traps. Dec 11, 2016 blue ocean strategy 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 cost. Blue ocean strategy powerpoint templates present better.
Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. The key goals of the red ocean strategy are to beat the competition and exploit existing demand. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. So blue ocean strategy is about how can any company or organization break out. To understand red ocean strategy let us begin by defining blue ocean strategy. How to create uncontested market space and make the competition irrelevant, a. Most blue oceans are created from within red oceans by expanding existing industry boundaries. Of course, the blueocean approach to this model would call. Red ocean in blue oceans, demand is created rather than fought over.
Innovation, new market space and creating demand are central characteristics. Sep 24, 2017 blue ocean strategy requires a different mindset. Blue ocean and red ocean strategy hindi marketing course. Their book teaches readers how to create uncontested markets for. Following my earlier brief post on value innovations that formed the core of a realtively new strategy concept called blue ocean strategy bos, this post provides a critique of bos to offer a deeper insight. See comparison between red and blue ocean strategies here in one simple table. The blue ocean approach is a strategic tool that helps innovation strategists asses current and desired future strategic states whereasred. Sarah layton in blue ocean strategy on april 21, 2009. Companies face cutthroat competition within defined and accepted industry boundaries. The strategy clearly brings out the fact that the only way to beat competition is to stop trying to beat it. 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 simple terms, red ocean strategy is about how to outpace rivals in existing market space.
Blue ocean strategy is where a company creates a completely new market space or market category. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. Red oceans are all the industries in existence today. The blue ocean strategy concerns itself with creating uncontested market space. 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 disadvantages of using blue ocean strategies. There is a defined market, defined competitors and a typical way to run a business in any. 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. This blog article is a overview of some of the key points of the book by w. Based on the book blue ocean strategy, a red ocean is defined as a market where multiple competitors fight for the same customers.
How to create uncontested market space and make the competition irrelevant, a book by professors w. A red ocean is a saturated market with industry competitors. Blue ocean strategy is a marketing theory in which a business enters a market that has little or no competition. 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. Blue ocean vs red ocean strategies 6 major differences. Jul 30, 2017 this strategy can work in the short run but it is a lot wiser for people to fast embrace the blue ocean strategy. What is the difference between red ocean and blue ocean strategy. Achieved via the delivery of features that have a highest marginal benefit to customer needs. May 27, 2014 for that there is nothing better than something called the blue ocean strategy. Here are two takeaways from the blue ocean strategy.