Blue ocean strategy is where a company creates a completely new market space or. Its the best part about the book is it speaks with examples which is what i prefer. 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. A good example of red ocean strategy is the european airline operator ryanair or southwest if you like in the us.
But, lets first understand what is blue ocean and how it is different from red ocean strategy. Blue ocean strategy is a book by harvard university press that states that instead of fighting for space in the already crowded sectors buisnesses, one must invent new domains categories, so that profits are maintained with minimum overheads. The books blue ocean strategy and blue ocean shift both provide. How to create uncontested market space and make the. Blue ocean strategy is the complete opposite of the business strategy of direct competitioncalled red ocean strategyemployed by most companies, kim said. See comparison between red and blue ocean strategies here in one simple table. 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.
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 order to keep themselves afloat in the marketplace, proponents of red ocean strategy concentrate on creating competitive advantages by examining the blueprints of their peerscompetitors. I am doing some research on bos it would be great if you experts here can give me examples of different companies who. What is the difference between a red ocean vs blue ocean. This creates a new product offering that doesnt currently exist. Companies under red oceans strive to outperform their rivals by grasping a higher proportion of existing market share at another companys loss. The book presents analytical frameworks and tools to foster an organizations ability to systematically create and capture blue oceansunexplored new market. Blue oceans, in contrast, denote all the industries not in existence today. Blue ocean strategy is a theory explained in a 2005 book by w. Canon copier industry case study blue ocean strategy.
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. Chan kim and renee mauborgne in the indie business book club. Written by the business worlds new gurus, blue ocean strategy continues to. Blue ocean strategy is where a company creates a completely new market space or market category. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w. And given that their recent followup book blue ocean shift.
Blue ocean strategy including examples and pdf download. Instead of struggling to survive in the bloody sharkinfested red oceans of vicious competition, why not move to the blue. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. Chan kim et renee mauborgne, chercheurs au blue ocean strategy institute.
So blue ocean strategy is about how can any company or organization break out of the red ocean of bloody competition or existing market space, which. Authors our story what we stand for books blue ocean global network. The metaphor defined in the book is that many companies compete with their rivals in bloody red oceans. Blue ocean strategy, create new markets and leave the. According to the blue ocean strategy principles, companies should not only try to compete in.
Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, toggle navigation. This book is a mustread for any small business owner or wannabe entrepreneur. Want more secrets and tricks like the blue ocean strategy. 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. In short, avoid headtohead competition and focus on innovation. If youd like to learn more about blue ocean strategies, then the best book on the.
Chan kim and renee maubourgne published a book, blue ocean strategy. Despite its importance to british culture, the british teakettle industry had flat sales and shrinking profit margins until philips electronics, the dutch consumer electronics company, came along with a teakettle that turned the red ocean blue. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price. How to create uncontested market space and make competition irrelevant. Why should companies continue to fight in tough competitive markets waters that are red with blood when they can find new waters that ar. 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. As the market gets crowded, the prospect of profit and growth diminishes. A red ocean strategy involves competing in industries that are. In short, you create a blue ocean by focusing on the factors that customers really care about, while discarding factors they dont. Align the whole system of a firms activities with its strategic choice of. It seems that most all of the fortune companies play in red oceans. Achieved via the delivery of features that have a highest marginal benefit to customer needs. In blue oceans, demand is created rather than fought over.
This is a complete contrast to conventional red ocean strategies because instead of analysing competitors, and try out perform them, blue ocean strategy encourage companies to differentiate or break away from the existing market space, hence making competition irrelevant. Sarah layton in blue ocean strategy on april 21, 2009. 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. It can be difficult to succeed with the cutthroat competition in the business environment today. The premise of the book is that companies can succeed by creating. Luckily, there are many strategies you can use in order to gain an edge on your competition. Her bio mentions that shes done work consulting and supporting companies using the blue ocean strategy, including academia. In a red ocean, an industry sector boundary is defined and accepted. Chan kim and renee mauborgne, professors at insead, back in 2004. Blue ocean strategy pushes companies to create new industries and break away from the competition. This new market space is created by launching new offerings, with the aim. This article describes how to break free of these red ocean traps.
Cell phones, and particularly smart phones manufacturers, are in red oceans. 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. Please someone tell me some specific companies products or services that are red ocean strategy. Learn about red ocean strategy and how it differs to blue ocean strategy.
Two of these are red ocean and blue ocean strategies, which were introduced by w. Chan kim and renee mauborgne, professors at insead. A red ocean strategy involves competing in industries that are currently in existence. 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. Blue ocean strategy is the most successful book on business masterplanning. Learn more about red and blue ocean strategies from the authors of the book on their website. To create a blue ocean strategy, organizations must be committed to value innovation. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w.
Blue ocean strategy blue ocean strategy is a business strategy book published in 2005 by harvard business school publishing corporation in united state of america, it was written by w. To understand red ocean strategy let us begin by defining blue ocean strategy. The mental models that undermine marketcreating strategies. This blog article is a overview of some of the key points of the book by w. The authors stress that value and innovation must work together simultaneously in order to develop a blue ocean strategy. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. In short you need to create your own blue ocean strategy. Companies try to outperform each other and gain a greater share of product or service demand.
The authors use the metaphor of the blue ocean as a direct contrast to red oceans. Introduction it is not hard to see why blue ocean strategy has been so popular. For this strategy, the key goals are to beat the competition and exploit existing demand. Blue ocean strategy can be applied across sectors or businesses. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. The blue ocean strategy means that you find some aspect of your market that no one is doing, and try to dominate that, rather than fighting it out with other vendors in your space a red ocean strategy. Blue ocean strategy suggests that an organization should create new demand in an uncontested market space.
They are competing very successfully in the already saturated red ocean of the shorthaul airline business. The authors suggest that there are many ways to create blue oceans. 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. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. Student questions i need company who is in red ocean. What are some successful examples of blue ocean strategy. Long enough to describe the strategy and explain the pitfalls, but not padded too far. Available on kindle ebook and can be read on any device with the free kindle. Value innovation strategy competes in an uncontested market space. The purpose of this conceptual paper is to introduce one of the controversial issues in the business world which is labeled blue ocean strategy, this study. Companies should instead look for new market space and ways to reinvent the industry. We all know well about redblue ocean strategy, how each ocean colour are works. 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.
How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy, expanded edition. 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. 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. One of my favorite business books is called blue ocean strategy, written by w. Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets.
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