Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. 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. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. The research focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean. 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. Chan kim and renee mauborgne provide tools and frameworks for creating blue oceanstheir term. Typically, companies in the red ocean pursue incremental improvements for customers through either low cost or differentiation. History and background a video game console is just a computer that is made only. The authors describe red oceans as the existing industries in a known market space. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. Red ocean in blue oceans, demand is created rather than fought over. But, lets first understand what is blue ocean and how it is different from red ocean strategy. Blue ocean vs red ocean strategies 6 major differences.
Their book teaches readers how to create uncontested markets for. It is the responsibility of the manager to analyze and put the most appropriate strategy for their business. Blue oceans denote all the industries not in existence today the unknown market space, unexplored and untainted by competition. Pdf blue ocean strategy download full pdf book download. Tru group inc blue ocean strategy belongs in the dead sea. Munir addresses the importance of focusing on noncustomers to. Blue ocean strategy adalah strategi menciptakan ruang pasar baru yang belum termanfaatkan. The authors use the terms blue oceans and red oceans to describe the entire market universe.
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. What is blue ocean strategy about blue ocean strategy. Chan kim and renee mauborgne, the writers of the 2005 book blue ocean strategy. In red oceans, industry boundaries are defined and accepted, and the. 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. Value innovation strategy competes in an 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. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. Red ocean looks at cost saving or differentiation while blue ocean focuses on doing both. Blue ocean strategy versus red ocean strategy youtube. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Pollard in their international bestseller, blue ocean strategy, w.
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. Zunaira munir compares blue ocean strategy versus red ocean strategy. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. Blue ocean strategy and sustainability for strategic. How does blue ocean strategy differ from red ocean strategy. Blue ocean strategy is a book published in 2005 and written by w. Explain these from the perspective of company, competition, costs, and markets. A marketcompeting strategy divides existing wealth between rival companies. One is to launch completely new industries, as ebay did with online auctions. The authors allude to the fact that most companies borrow their strategic thinking from military models see paradox of strategy. They represent businesses that may not be around today, or werent around until they came on to the scene.
This blog article is a overview of some of the key points of the book by w. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red wa ters of known market space. There is ample opportunity for growth that is both profitable and rapid. Sarah layton in blue ocean strategy on april 21, 2009. Cmo home opinion guest columnist blue ocean strategys fatal flaw by wayne e. This 2005 book is aimed at anyone interested in pursuing the authors blue ocean strategy for. How to create uncontested market space and make the. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Innovation, new market space and creating demand are central characteristics.
It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. In an environment where income streams are not welldefined and where there is political and economic challenges, businesses suffer. 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. 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. Blue ocean strategies on february 12, 2020 blog, b2b strategy and messaging, virtual vp of marketing it can be difficult to succeed with the cutthroat competition in the business environment today. It is based on the view that market boundaries and industry structure are not a given and can be. When we think of competition between companies like coke and pepsi or walmart and costco, we think of competitors fighting to. Red ocean strategy create uncontested market space make the competition irrelevant create and capture new demand compete in existing market space beat the competition exploit existing. Itu sebabnya kini hadir istilah baru yang disebut blue ocean strategy. Namun ternyata, kesuksesan sebuah perusahaan kini tidak lagi diukur dengan memenangi persaingan berdarahdarah di 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. In my own opinion, most businesses are operating under very challenging circumstances in zimbabwe.
Chan kim and renee mauborgne in their book blue ocean. Companies face cutthroat competition within defined and accepted industry boundaries. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w. These systems started to gain popularity in the 1970s with consoles that played only pong. In contrast, blue ocean strategy is about how to get out of established market boundaries to leave the competition behind. By that we can see that there is a lot of interest by the. 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. Blue ocean strategy is a concept that has been pioneered by insead professors, w. Value innovation is the cornerstone of blue ocean strategy 1 and it is the strategic move that allows a company to create a blue ocean. Red oceans are all the industries in existence today. How to create uncontested market space and make the competition irrelevant, a book by professors w.
In red oceans, there is a competitiveadvantage worldview. Surface 3 and apple watch red oceans v blue oceans strategy. Blue ocean strategy value innovation strategy canvas four actions framework errc grid six paths framework pioneer migrator settler map three tiers of noncustomers sequence of creating a blue ocean buyer utility map price corridor of the mass four hurdles to strategy execution tipping point leadership fair process. As competition increases, prospects for profit and growth decline. Impact of blue ocean strategy on organizational performance. Ocean strategy, sustainability, innovation, value, sustainable value, strategic management. The main selling point with blue ocean marketing is the focus on creating demand where there currently is none. With a focus of not just beating your competition but making them irrelevant, blue ocean strategy is all about thinking outside the box. Comparing surface 3 and apple watch shows us the difference between a red ocean competitor and a blue ocean competitor which are you. Let me try to explain this in simple terms for the benefit of everyone.
Blue ocean strategy can be applied across sectors or businesses. Senior global blue ocean strategy network member dr. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Blue ocean strategy suggests that an organization should create new demand in an uncontested market space, or a blue ocean, rather than compete headtohead with other suppliers in an existing industry that is called red ocean. How to create uncontested market space and make the competition irrelevant. Bos blue ocean strategy ros red ocean strategy pms pioneermigratorsettler map bum buyer utility map ua unfair advantage boii blue ocean idea index terms framework a framework is structure that is a real or conceptual, with the purpose to serve as a support or guide. I wondered if they are using a blue ocean or a red ocean strategy for their own business. Blue vs red ocean endicott masters in international admin. Red oceans represent all the industries in existence todaythe known market space. There are two types of oceans in this world, according to authors w. In simple terms, red ocean strategy is about how to outpace rivals in existing market space. Blue ocean strategy and its implications for businesses. Blue ocean vs red ocean strategies 6 major differences red bull case study. Blue ocean strategy case study service nsw 2 foreword service nsw is an important initiative in the delivery of an improved customer experience for the citizens and businesses of new south wales.
While the red ocean strategy is a head to head battle where the players of a particular segment compete with each other remaining in the same market space i. Pdf impact of blue ocean strategy on organizational. The authors conclude that the blueocean strategy or innovation approach is sustainable. 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. Red ocean strategy and blue ocean strategy youtube. Even though, recently, white ocean has emerged in world business strategy. For that there is nothing better than something called the blue ocean strategy. The vieoints of the authors are discussed with a greater clarity in order to clearify both the terms with respect to different references provided. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Let us say the market that we operate is an ocean cle. Blue oceans denote all the industries not in existence today. A red ocean is a metaphor for a market full of competitors. In a red ocean environment, the market becomes more fierce and crowded as competitors try to steal share.
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