This happened, for example, when apple created its itunes music download service in 2003. Surface 3 and apple watch red oceans v blue oceans strategy. They represent businesses that may not be around today, or werent around until they came on to the scene. Gain a new framework for strategy design and implementation.
Download a pdf version of the formulation teaching module here. This blog article is a overview of some of the key points of the book by w. You can read blue ocean strategy if you want to learn how the authors suggest you do it, but there is a. These systems started to gain popularity in the 1970s with consoles that played only pong. Start developing blue ocean strategy for your organisation in order to break away from the competition through. Red ocean strategy ways to write a blue ocean blog ideally, we all want to create blue ocean blogs that make the competition irrelevant.
It became a huge bestseller, and remains popular today. History and background a video game console is just a computer that is made only. There are two types of oceans in this world, according to authors w. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to. Without a rich choice of titles and an easy way to download them, the noncustomers. This is the holy grail that marketers have been seeking since we began thinking about product differentiation, market segmentation, positioning, and all the. Red ocean strategy pdf download download the blue ocean strategy summary pdf. Blue ocean strategy is a method of creating business strategy of the enterprise, which was described in a book by w.
This strategy can work in the short run but it is a lot wiser for people to fast embrace the blue ocean strategy. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. An introduction to blue ocean strategy mba knowledge base. 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. How does blue ocean strategy differ from red ocean strategy. A red ocean is a metaphor for a market full of competitors. With a focus of not just beating your competition but making them irrelevant, blue ocean strategy is all about thinking outside the box. 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. 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. Red oceans represent all the industries in existence todaythe known 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. Blue ocean strategy is where a company creates a completely new market space or market category. For that there is nothing better than something called the blue ocean strategy. A red ocean strategy involves competing in industries that are currently in existence. Essay about blue ocean strategy 825 words bartleby.
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. Pdf blue ocean strategy download full pdf book download. The key is understanding how to create a blue ocean market. Blue ocean vs red ocean strategy strategic management. Pdf for creating new demands and open up a new market space the pursuit of. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50.
Let me try to explain this in simple terms for the benefit of everyone. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Blue ocean vs red ocean strategies 6 major differences. How to create uncontested market space and make the competition irrelevant pdf by w. Let us say the market that we operate is an ocean cle. The on the blue ocean strategy essay 1969 words 8 pages. Learn how to engage your colleagues in a blue ocean strategy process. Written by the business worlds new gurus, blue ocean strategy continues to challenge everything you thought you knew about competing in todays crowded market place. There are two ways we can create a blue ocean strategy. The book titled blue ocean strategy is not helpful to management dont buy it and if you.
Acquire an indepth understanding of blue ocean strategy tools and concepts developed at insead. A marketcompeting strategy divides existing wealth between rival companies. Social sector application and research, including such topics as how blue ocean strategy can be applied in the developing world to mitigate poverty and improve education and health. In their bestselling book, blue ocean strategy, authors w. Companies should instead look for new market space and ways to reinvent the industry. Public sector application and research, including the application of blue ocean shift, blue ocean strategy, and blue ocean leadership to governments and nonprofits. 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.
Blue ocean strategy including examples and pdf 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. The authors conclude that the blueocean strategy or innovation approach is sustainable. The profit is much easier than the rivalry with the competition on existing markets. The blue ocean strategy concerns itself with creating uncontested market space. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. Red ocean strategy compete in existing market space beat the competition focus on existing customers exploit existing demand make the valuecost tradeoff create greater value to customers at a higher cost or create reasonable value at a lower cost align the whole system of a firms activities with its strategic choice of differentiation or low cost blue ocean strategy create. 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. Chan kim and renee mauborgne, the writers of the 2005 book blue ocean strategy. Blue vs red ocean endicott masters in international admin. Value of the organization examination of differentiation with red ocean strategy.
Blue ocean strategy chan kim and renee mauborgne was released in 2005 by harvard business school press. 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. 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. The blue ocean strategy is based on the concept that industry structure. In this article you will learn how to make your competition irrelevant and have sales and profit. 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 is a book published in 2005 and written by w. Value innovation strategy competes in an uncontested market space. Blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. Pdf blue ocean strategy for creating value of the organization. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. 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.
Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. 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 red ocean environment, the market becomes more fierce and crowded as competitors try to steal share. The mental models that undermine marketcreating strategies. Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, authors w. When it comes to building a blue ocean, what organisation wouldnt want. To understand red ocean strategy let us begin by defining blue ocean strategy. Innovation, new market space and creating demand are central characteristics. Chan kim and renee mauborgne argue that lasting success comes from creating blue oceans. In a red ocean environment the market becomes more fierce and crowded as.
Most blue oceans are created from within red oceans by expanding existing industry boundaries. Sarah layton in blue ocean strategy on april 21, 2009. 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. In red oceans, industry boundaries are defined and accepted, and the. Blue ocean vs red ocean strategy free download as powerpoint presentation. There is ample opportunity for growth that is both profitable and rapid.
Blue ocean strategy powerpoint templates present better. One is by launching or introducing a completely new product, service, or concept. In the evercompetitive online space, we tend to stumble upon the same articles over and over again. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. Blue ocean strategy is to defined, in red oceans, existing industries and businesses, an unknown market space that has never been tapped by any player in the current industry. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. Red ocean looks at cost saving or differentiation while blue ocean focuses on doing both. Red oceans represents all the industries in existence read little women online pdf today. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. See comparison between red and blue ocean strategies here in one simple table. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy.
But many companies have done their homework and succeeded thanks to this strategy. As competition increases, prospects for profit and growth decline. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. The structure can be created or recreated by the steps taken by players in the market. Indeed most blue oceans are created from within, not beyond, red oceans of. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. Blue ocean strategy red ocean strategy blue ocean strategy virgin cola red bull competed vs.
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. 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. Their book teaches readers how to create uncontested markets for. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Implementing the blue ocean strategy is, simply put, a gargantuan task. 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 strategy clearly brings out the fact that the only way to beat competition is to stop trying to beat it.
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