Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to bring the blue. How to create uncontested market space and make the competition irrelevant. In the red oceans the rules of competitive games are well defined. Kim and mauborgne compared this to a blue ocean where the water is clear and blue, a lovely place to go for a swim. 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.
Red ocean vs blue ocean this blog article is a overview of some of the key points of the book by w. In a blue ocean, you are the only provider of consequence. Companies pursue blue ocean strategies to make competition irrelevant. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. One is to launch completely new industries, as ebay did with online auctions. Blue ocean strategy including examples and pdf download. 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. How to find a blue ocean for your startup blog web and. Blue ocean strategy is where a company creates a completely new market space or market category. In order, to give a deep insight on the blue ocean strategy i selected the most relevant ones that i will enumerate in my research object. Most blue oceans are created from within red oceans by expanding existing industry boundaries. You are uncontested because you have created a product or service that is. The study illustrates that blue ocean strategy cannot be a static process and that it is necessary for nintendo to create a dynamic strategy in order to stay in the blue ocean and keep it from being turned into a red ocean. The following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy.
A blue ocean strategy may come out of a red ocean strategy. It is aimed at enriching blue ocean strategy with a case study in which we see the process of creating a blue. There are no substitutes for analytics to guide managers in navigating successfully in the blue. Blue ocean strategy blue ocean strategy pdf five keys to blue ocean strategy blue ocean strategy 2004 compte nickel blue ocean strategy book summary blue ocean strategy blue ocean strategy expanded edition blue ocean strategy book by w. Joining forces university of art and design helsinki september 2224, 2005. Companies under red oceans strive to outperform their rivals by grasping a higher proportion of existing market share. Through my research, readings and my interviews more and more questions appeared. 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. Blue ocean strategy how to create uncontested market space and make the competition irrelevant. Dec 11, 2016 blue ocean strategy the blue ocean approach is a strategic tool that helps innovation strategists asses current and desired future strategic states whereasred ocean is a current state. However, value innovation is based on the view that market boundaries and industry structures are not given and can be reconstructed. In blue oceans, demand is created rather than fought over. The bluest ocean strategy for emerging ict business. Blue ocean strategy and sustainability for strategic management.
Achieved via the delivery of features that have a highest marginal benefit to customer needs. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. To understand red ocean strategy let us begin by defining blue ocean strategy. It is worth noting the organizations will move between blue oceans and red oceans over time. Pdf blue ocean strategy download full pdf book download. Red ocean in blue oceans, demand is created rather than fought over. The company, however, is now in the middle of a bloody red ocean, with declining performance. The industries boundaries are defined and well accepted in the red oceans. Companies should instead look for new market space and ways to reinvent the industry.
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. Because there is a cut throat competition that makes the red ocean bloody and products become commodities. 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. Converting a red ocean into a blue ocean brainmass. Red ocean blue ocean strategies kim and mauborgne n. How to create uncontested market space and make the competition irrelevant, professors w. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy.
How to create uncontested market space and make the. Red oceanblue ocean strategies kim and mauborgne n. In this article you will learn how to make your competition irrelevant and have sales and profit. This blog article is a overview of some of the key points of the book by w. The risks of following a blue ocean strategy the adaptive. Red ocean strategy pdf download download the blue ocean strategy summary pdf. The blue ocean that disappeared the case of nintendo wii. Red ocean and blue ocean approach to industry boundaries red ocean markets are large and the rate of product innovation is low. Mauborgne call red oceans coloured by blood of cutthroat competition. A blue ocean is contrasted with a red ocean where all market participants are doing the same thing and fighting for the same customers. Four reasons why blue ocean thinking is crucial insead. How to create uncontested market space and make the competition irrelevant pdf by w. Chan kim, and renee mauborgne of insead, a graduate business school with locations in europe and the middle east, put forth a simple, but effective argument as to why markets should be divided into two distinctly different categories.
Blue ocean vs red ocean strategies 6 major differences. May 30, 2017 a blue ocean is contrasted with a red ocean where all market participants are doing the same thing and fighting for the same customers. How to create uncontested market space and make the competition irrelevant, a book by professors w. 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. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue. They are the authors of blue ocean strategy, which has sold over 3. A red ocean is a metaphor for a market full of competitors. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited.
Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as. Red ocean strategies compete in existing markets which is referred to head to head competition, where as blue ocean strategies exist in. Sep 24, 2017 in 2005, blue ocean strategy, expanded edition. What a company will do if it adopts a blue ocean strategy skills practiced making connections use understanding of the concept of a blue ocean strategy to identify its effects on a business. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. You are uncontested because you have created a product or service that is exclusive and unchallenged. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. Let us say the market that we operate is an ocean cle. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. Chan kim pdf download blue ocean blue ocean strategie blue ocean shift pdf blue ocean shift blue ocean shift espanol pdf ocean blue sanded grout red ocean. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. Red oceans represent all the industries in existence today the known market space. An introduction to blue ocean strategy mba knowledge base.
Blue ocean strategy how to create uncontested market. Therefore the market is usually heavily populated by competition and there are a set of rules that is known. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. It requires the right research, patience and focus. The on the blue ocean strategy essay 1969 words 8 pages. The companies try to take away the greater share of the existing demand. It is being published in a recordbreaking 44 languages and is a bestseller across five. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. The first step towards implementing blue ocean theory is finding your own blue ocean. A marketcompeting strategy divides existing wealth between rival companies. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. The concept of blue ocean is based on the idea that the business universe is made up. As competition increases, prospects for profit and growth decline. Red oceans of vicious competition, why not move to the blue.
The creation of blue oceans is about driving costs down while simultaneously driving value up for buyers. 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. Red oceanstrategy compete in existingmarket space beatthe competition exploitexisting demand make the value. The red ocean in contrast is red because ofwell blood. Jan 21, 2015 in their 2005 book entitled, blue ocean strategy. Essay about blue ocean strategy 825 words bartleby. By combining the decisive factors of both groups and eliminating or. Companies that are already in existence may make a solid decision to come out of the usual way of doing things and go into uncharted grounds.
The premise of the book is that companies can succeed by creating. 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. Pdf blue ocean strategy as a tool for improving a companys. In red oceansthat is, in all the industries already existingcompanies compete by grabbing for a greater share of limited demand. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w. Cirque created what the authors call a blue ocean, a previously unknown market space. Blue ocean businesses create new markets, new demand, and often give the business insulation against competition. Blue ocean strategy offers startup owners a way to create a new market and fill it with their product. Value innovation strategy competes in an uncontested market space.
Therefore, the main idea of blue ocean strategy is. 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 business model describes the rationale of how an organization creates, delivers, and captures value economic, social, cultural, or other forms of. Set sail towards your blue ocean jk beteiligung gmbh. 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. After studying 150 strategic moves by companies spanning more than a hundred. 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. Jul 28, 2018 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. Value innovation value innovation places equal emphasis on value and innovation.
Blue ocean strategy is a book published in 2005 and written by w. 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 vieoints of the authors are discussed with a greater clarity in order to clearify both the terms with respect to different references provided. There is ample opportunity for growth that is both profitable and rapid. Blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. The elimination reduction improvement creation net 4. The blue ocean that disappeared the case of nintendo wii journal of business strategy theme. While they are generally perceived to be more exciting and innovative, there are still major opportunities in traditional red ocean businesses when companies apply rethinking and some adjustments. The book titled blue ocean strategy is not helpful to management dont buy it and if you. Red oceans represents all the industries in existence read little women online pdf today.
Exploration of the dynamic process of blue ocean creations based on a single case study of nintendo wii. This paper aims to understand the underlying dynamics of strategies in the form of interactions between theory and management practices by examining the successive strategic moves. Startups using it enjoy a competitorsfree market and when the copycats and competitors finally come, its harder for them to beat the predecessors since people dont like changing their habits. How does blue ocean strategy differ from red ocean strategy.
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. Jun 21, 2007 blue ocean strategy red ocean strategy 2. Blue ocean strategy and sustainability for strategic. The book then proceeds with the explanation of value innovation and a comparison between red ocean and blue ocean strategy before going into the analytical tools and frameworks.
In a red ocean environment the market becomes more fierce and crowded as. Value innovation is a new way of thinking about and executing strategy that results in the creation of a blue ocean. But its much more common for a blue ocean to be created from within a red. Let me try to explain this in simple terms for the benefit of everyone. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. 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. Creativity, industrial strategy making, valueinnovation, blue ocean strategy, design. Successful trailblazing organizations will attract competition, creating a red ocean. 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. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. See comparison between red and blue ocean strategies here in one simple table.
Blue ocean strategy the blue ocean approach is a strategic tool that helps innovation strategists asses current and desired future strategic states whereasred ocean is a current state. How to create uncontested market space and the make competition irrelevant 2005. The concept of ideal strategy and its realization using white ocean. 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. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. Like the blue ocean, it is vast, deep, powerful in terms of pro. Blue ocean strategy is a landmark idea founded by w.
The body shop, for example, dominated the blue ocean it had created for more than a decade. A company will have more success, fewer risks, and increased profits in a blue ocean market. Blue ocean strategy is based on over decadelong study of more than 150. Chan kim and renee mauborgne in their book blue ocean strategy.
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