Sep 24, 2017 blue ocean strategy requires a different mindset. For example, competing factors in blue ocean strategy are similar to the definition of finite and infinite dimensions in funky business. The key theme in this article is that when businesses are faced with a choice of battling competition in saturated markets or creating an entirely new market. But, lets first understand what is blue ocean and how it is different from red ocean strategy.
This article explains what the blue ocean strategy is and how it can become a game changer for businesses stuck in stagnating markets. Blue ocean vs red ocean strategies 6 major differences. Blue ocean strategy pdf blue ocean strategy blue ocean strategy 2004 five keys to blue ocean strategy blue ocean strategy expanded edition book summary blue ocean strategy blue ocean strategy book by w. Blue ocean strategy and its implications for businesses. Although established industries red oceans are growing increasingly cluttered, few companies are currently attempting to create new markets. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. However, blue ocean strategy provides a robust mechanism to mitigate risks and increase the odds of success. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. The blue ocean strategy book defines red oceans as those which already contain a high level of competition. The basic message of blue ocean strategy is that organizations should not try to compete in existing markets red oceans but rather create or find.
Blue ocean strategy powerpoint templates present better. There may be times when your audience will ask you to email them a copy of your blue ocean strategy presentation. Importance of the blue ocean strategy to a business. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. Tidak heran pada red ocean strategy akan timbul persaingan yang tidak sehat, saling menjatuhkan dan berusaha mengahabisi setiap pesaingnya. 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. A red ocean strategy ultimately leads to an organization choosing to follow one of two strategies differentiation or low cost. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. How to create uncontested market space and make the competition irrelevant, a book by professors w.
As competition increases, prospects for profit and growth decline. Although there is an inevitability to having to compete in crowded markets, there are too many advantages to avoiding this situation to ignore the possibility of looking for blue space. Blue ocean strategy is a book published in 2005 and written by w. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy. A good example of red ocean strategy is the european airline operator ryanair or southwest if you like in the us. Feb 01, 2015 purple ocean strategy purple ocean strategy just as blue ocean strategy states that a red ocean strategy competitive strategy does not guarantee success for the firm purple ocean strategy also claims that blue ocean strategy cannot guarantee the business success in the long run since the blue ocean strategy will finally turn red. However, theres always the possibility that your recipients may not have the. Of course any strategy will always involve risks be it red or blue. Make the competition irrelevant download free epub, pdf. Healthcares blue ocean strategy for blockchain cio. Avoid these six red ocean traps firms trying to tap into new markets for growth often fall into the traps of putting resources into wooing existing customers and investing heavily in valueadded offerings.
A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. Achieved via the delivery of features that have a highest marginal benefit to customer needs. The authors use the metaphor of the blue ocean as a direct contrast to red oceans. Black ocean strategy while making decision for survival and consequences of such strategic decisions through investmentperceived risk matrix. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of 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.
A marketcompeting strategy divides existing wealth between rival companies. In the scenario of a bloody red and rivalryoriented food industry, around eight years ago, the largest wine and food market of the world, globally known as. 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. A red ocean strategy is based on traditional strategic.
Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. The logic behind blue ocean strategy parts with traditional models focused on competing in existing 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. Much of the literature previously suggested that following a mix of generic strategies could be very difficult or could compromise a firms competitive position. Blue ocean strategy can be applied across sectors or businesses. They have seen that the trouble lies in managers mental modelsingrained assumptions and. Only then can companies step up to the challenge of creating blue oceans in a smart and. 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. 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. To understand red ocean strategy let us begin by defining blue ocean strategy. In this article you will learn how to make your competition irrelevant and have sales and profit. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. A key concept of this blue ocean strategy is value innovation. So blue ocean strategy is about how can any company or organization break out. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure.
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. Namun ternyata, kesuksesan sebuah perusahaan kini tidak lagi diukur dengan memenangi persaingan berdarahdarah di red ocean strategy. Healthcares blue ocean strategy for blockchain increased commoditization drives leaders to search for uncontested markets with the desire to make the competition irrelevant. Innovation, new market space and creating demand are central characteristics. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. For instance, the benefits of optimizing the firms strategy for a particular target segment focus. Blue ocean strategy is a powerful framework for finding new business opportunities. 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. This article uses examples from the real world to discuss the specifics of the blue ocean strategy.
A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean strategy including examples and pdf download. But its not always clear how to create a blue ocean strategy for yourself. Blue ocean strategy and new business models in the food industry. Blue ocean strategy is an opportunitymaximising riskminimising strategy. They represent businesses that may not be around today, or werent around until they came on to the scene.
Of course, the blue ocean approach to this model would call. 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. 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 impact of blue ocean strategy on organizational. Blue ocean strategy is a new way of thinking, a new strategic mindset, a bold new path to winning the future. Sarah layton in blue ocean strategy on april 21, 2009.
Chan kim and renee mauborgne wrote a bestselling book, blue ocean strategy, which has been translated into 43 languages. Value innovation strategy competes in an uncontested market space. This blog article is a overview of some of the key points of the book by w. Blue ocean shift is the definitive guide to shift you, your team, and your organization to new heights of confidence, market creation, and growth. Indeed, it can be argued that managers failure to realize the differences between red and blue ocean strategy lies behind the difficulties many companies. Blue oceans denote all the industries not in existence today the unknown market space, unexplored and untainted by competition. Jul 17, 2018 implementing the blue ocean strategy is, simply put, a gargantuan task. How to create uncontested market space and make the competition irrelevant download free epub, pdf. In case of blue ocean strategy the emphasis of the company is on research and development because new products can only be made if company invests funds into research department whereas in case of red ocean strategy the emphasis is on good service and timely delivery to the customers because emphasis in this strategy is the satisfaction of the. Blue ocean strategy pdf blue ocean strategy blue ocean strategy 2004 five keys to blue ocean strategy book summary blue ocean strategy blue ocean strategy expanded edition blue ocean strategy book by w. 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. Blue ocean strategy is where a company creates a completely new market space or market category. You can, of course, email the entire powerpoint file.
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. Blue green red and purple ocean strategy slideshare. But many companies have done their homework and succeeded thanks to this strategy. There is ample opportunity for growth that is both profitable and rapid. A business model describes the rationale of how an. Aug 16, 2018 a red ocean strategy is going to require that you manage the process of meeting with the stakeholder groups and their representatives to build the case for change, to understand their needs, and. Chan kim pdf download blue ocean blue ocean strategie blue ocean shift blue ocean shift pdf blue ocean shift espanol pdf ocean blue sanded grout red ocean strategy 15fen finding the blue ocean. Itu sebabnya kini hadir istilah baru yang disebut blue ocean strategy. By focusing on strategies of competition in established industries, companies and researchers have overlooked the value of creating new market spaces where there are no competitors. Whichever is chosen the organization must align all activities with one of these strategic directions. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy. A blue ocean strategy enables the creation of new markets, buy moving beyond the boundaries of existing red ocean markets to create uncontested markets. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue.
This framework addresses not only the analytic aspects behind the creation of blue ocean strategy but also the allimportant human aspects of how to bring an organization and its people on this journey with a willingness to execute these ideas in. Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, funky business explained that competitive strategy is the route to nowhere. Ocean strategy, harvard business school press, 2005. Pdf harvard business school press blue ocean strategy. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. Red ocean in blue oceans, demand is created rather than fought over.
Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as. Blue ocean strategy and new business models in the food. 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 demand blue ocean strategy red ocean strategy 6. Most blue oceans are created from within red oceans by expanding existing industry boundaries. Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets. Impact of blue ocean strategy on organizational performance. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w.