Blue Ocean Strategy is a marketing theory from a book published in which was written by W. Chan Kim and Renée Mauborgne, professors at INSEAD.Book layout and concepts · Concept · Examples · Reception. 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. In , Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant, a book by.
|Published:||17 January 2014|
|PDF File Size:||47.18 Mb|
|ePub File Size:||45.43 Mb|
blue ocean strategy The goal of these strategies is not to beat the competition, but to make the competition irrelevant. To discover an elusive Blue Ocean, Kim and Mauborgne recommend that businesses consider what they call the Four Actions Framework to reconstruct buyer value elements in crafting a new value curve.
The framework blue ocean strategy four key questions: What factors should be raised well above the industry's standard? What factors were a result of competing against other industries and can be reduced?
Blue Ocean Strategy - Wikipedia
Which factors that the industry has long competed on should be blue ocean strategy Which factors should be created that the industry has never offered? In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.
Here companies try to outperform their rivals to grab a greater share blue ocean strategy product or service demand. As the market space gets crowded, prospects for profits and blue ocean strategy are reduced.
Products become commodities or nicheand cutthroat competition turns the ocean bloody; hence, the term "red oceans". In blue oceans, demand is created rather than fought over.
Blue Ocean Strategy Definition from Financial Times Lexicon
There is ample opportunity for growth that is both profitable blue ocean strategy rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting blue ocean strategy be set.
Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. The aim of value innovation, as articulated in the article, is not to compete, but to make the competition irrelevant by changing the playing field of strategy.
Blue Ocean Strategy
The strategic move must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.
The Four Actions Framework is used to help create blue ocean strategy innovation and break the value-cost trade-off. Value innovation challenges Michael Porter 's idea that successful businesses are either blue ocean strategy providers or niche-players.
Instead, blue ocean strategy proposes finding value that crosses conventional market segmentation and offering value and lower cost.
Blue Ocean Strategy: Creating Your Own Market
Hill proposed a similar idea in and blue ocean strategy that Porter's model was flawed because differentiation can be a means for firms to achieve low cost.
He proposed that a combination of differentiation and low cost might be necessary for firms to achieve a sustainable competitive advantage. For example, blue ocean strategy factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business.
Just as blue ocean strategy claims that blue ocean strategy red ocean strategy does not guarantee success, Funky Business explained that "Competitive Strategy blue ocean strategy the route to nowhere".
Funky Business argues that firms need to create "sensational strategies". Kim and Mauborgne explain that the aim of companies is to create blue oceans, that will eventually turn red.
This is the same idea expressed in the form of an analogy. Kim and Mauborgne claim that blue ocean strategy makes sense in a world where supply exceeds demand.
What Is Blue Ocean Strategy?
Blue Ocean Strategy can be applied across sectors or businesses. It is not limited to just one business. But, let's first understand what is Blue Ocean and how it is different from Red Ocean strategy. In today's environment most firms operate under intense competition and try to do everything to gain market share.
The steps above would take the following blue ocean strategy for this innovation: