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. Blue ocean strategy bos introduction to bos bos tools. What is blue ocean strategy about blue ocean strategy. Blue ocean strategy is a method of creating business strategy of the enterprise, which was described in a book by w. This blog article is a overview of some of the key points of the book by w. Blue ocean strategy definition the business professor. Blue ocean strategy powerpoint templates present better. Jul 28, 2018 the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. What are some successful examples of blue ocean strategy. 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 time. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit. One of the most successful efforts to do so is the book blue ocean strategy, by w. 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 is a marketing theory and the title of a book published in 2004 that was written by w.
It requires the right research, patience and focus. May 19, 2007 blue ocean strategy presentation by ajay mohan goel 22067 views. This book brings the best of those articles together all in one place. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. 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. Click here to download the blue ocean strategy summary pdf. Sep 24, 2017 blue ocean strategy requires a different mindset. Jul 10, 2019 download blue ocean strategy definition as pdf. It is a great way to mobilize thinking around new differentiators value creation. Why should companies continue to fight in tough competitive markets waters that are red with blood when they can find new waters that ar. Secondly market definition it is recognized that the term blue ocean strategy is new, but blue oceans existence is not. 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. 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. Learn the definition of blue ocean strategy and the meaning of creating blue oceans here.
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. The profit is much easier than the rivalry with the. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Blue ocean strategy financial definition of blue ocean. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Red oceans are described as all the industries in existence today. Much of business strategy in the past few decades has focused on competition, including michael porters five forces and swot analysis. A blue ocean strategy posits that when a customer changes the purpose of purchasing, a new market is created. By identifying untapped or at least less tapped product markets where unique buyer segments and needs can be identified and satisfied, blue ocean strategy results to. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. The cornerstone of the blue ocean strategy is value innovation. Companies should instead look for new market space and ways to reinvent the industry. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30.
Click the link above to read the key concepts and everything you want to know about the blue ocean strategy. In red oceans, industry boundaries are defined and accepted, and the. Companies pursue blue ocean strategies to make competition irrelevant. Chan kim and renee mauborgne in their book blue ocean strategy. Blue ocean strategy can be applied across sectors or businesses. Blue ocean strategy presentation by ajay mohan goel 22067 views. Chan kim and renee mauborgne, professors at insead. The economist a great read for any leader looking to get a real edge in business and establish a real competitive advantage in the market. By that we can see that there is a lot of interest by the business people and academics around the world about that subject. It is based on the view that market boundaries and industry structure are not a given and can be. Blue ocean strategy er et ledelsesbegreb fra erhvervslivet formuleret af professor w.
Essay about blue ocean strategy 825 words bartleby. The book the origin of the terms red and blue oceans comes from blue ocean strategy how to create uncontested market space and make the competition irrelevant. 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. The rapid pace of innovation and change in recent years has led scholars and executives to search for an approach to strategy that is more dynamic than harvard professor michael porters classic five forces. Achieved via the delivery of features that have a highest marginal benefit to customer needs. The on the blue ocean strategy essay 1969 words 8 pages. Blue ocean strategy is often compared to venture strategy. Rather than concentrating on beating the competitors, the company must actually prioritize on making the competition irrelevant. Red oceans represent all the industries in existence todaythe known market space.
After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. The concept of blue ocean strategies is new in the business world as it was first published in 2005 in the bookmanual blue ocean strategy, by w. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean strategy summary click here to read this article. 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. Mauborgne nevertheless attack him head on, arguing that the five forces analysis is a formula for remaining in red oceans, where the sharks compete. Blue ocean strategy is where a company creates a completely new market space or market category. This happened, for example, when apple created its itunes music download service in 2003. The blue ocean approach is based upon the concept of value innovation which was also introduced by the authors of the blue ocean strategy, kim and mauborgene. This article explains the blue ocean strategy, developed by w. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. Blue ocean shift is packed with realworld examples of organizations facing the same constraints we all face be they politics, bureaucracy, or limited resources that applied the very tools and process outlined in the book to shift from competi.
Blue ocean strategy refers to the building of a new, uncontested market space that makes competitors irrelevant. Introduction it is not hard to see why blue ocean strategy has been so popular. Blue ocean strategy formulation the four principles of strategy formation click here to read this article. Venture strategies have been used by large multinationals for decades. Blue ocean strategy including examples and pdf download. Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. To understand red ocean strategy let us begin by defining blue ocean strategy. To make your life easier, you can download these free templates that have been made especially for blue ocean strategy presentations. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. The seminal book blue ocean strategy has sold over 3. Blue ocean strategy is the most successful book on business masterplanning. The validity of the often used blue ocean strategy for generating and successfully operating on blue ocean markets has. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant.
Reviewing the blue ocean strategy university of twente student. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Apr 03, 2010 blue ocean strategy summary and examples 1. Blue ocean was not created but the demand was drawn from other markets. Chan kim and renee mauborgne in their book blue ocean. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. 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. Pdf blue ocean strategy as a tool for improving a companys.
This can be done by creating more value for buyers enabling the company to open up a whole new uncontested market space, the blue ocean. Blue ocean strategy is a concept that has been pioneered by insead professors, w. The text offers a practical handbook to business students and entrepreneurs who wish to rise above the fray of the competition, become pioneers in previously uncharted market territory, and gain access to impressive growth opportunities and an untapped customer base. How to create uncontested market space and make the competition irrelevant, a book by professors w. Blue ocean strategy how to create uncontested market space and make the competition irrelevant facilitators. This allows you to understand where the competition is currently investing, the factors the industry currently competes on in products, service, and delivery, and what. The risks of following a blue ocean strategy the adaptive. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Blue ocean strategy summary by jessestarmer 395542 views. The blue ocean strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers.
Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. The blue ocean strategy bos is the strategic organizational approach that is based on the principle that companies should not engage in a. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. The profit is much easier than the rivalry with the competition on existing markets. Value innovation strategy competes in an uncontested market space. The blue ocean strategy seems to be a perfect solution for present companies to become sustainable successful.
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. However, there is a large difference between these two approaches. Apr 27, 2012 blue ocean is a strategy of innovation in new market space where competition does not exist. If that individual changes purchasing habits based upon aesthetics or fashion, there is a new customer market. Blue ocean strategy and its implications for businesses. Identify actions to actualize the strategies conclusion facilitators. 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.
How to create uncontested market space and the make competition irrelevant 2005. A company will have more success, fewer risks, and increased profits in a blue ocean market. There are two ways we can create a blue ocean strategy. Jul 16, 2015 the blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. 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. By identifying untapped or at least less tapped product markets where unique buyer segments and needs can be identified and satisfied, blue ocean. 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. One is by launching or introducing a completely new product, service, or concept.
Reviewing the blue ocean strategy universiteit twente. Five steps to making a blue ocean shift blue ocean shift. Some critiques say that the prospect of raising demand infinitely simply does not exist. The idea in brief the best way to drive profitable growth. 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. Blue ocean strategy is a book published in 2005 and written by w. Blue ocean is a strategy of innovation in new market space where competition does not exist. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades. Now that youve done the hard work of identifying your blue ocean strategy, its time to present it to top management. It captures the current state of play in the known market space.
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