Blue ocean strategy is where a company creates a completely new market space or market category. And what we have been lacking is a roadmap to get there with tools and guidance anyone can apply. Each industry underwent continuous upheaval, each time spurred by a blue ocean strategy that 1 reduced factors unimportant to buyers, 2 increased factors important to buyers, 3 expanded the market. A final risk of blue ocean strategy is that it can lead companies to oceans that are blue for a very good reason. The implication is that blue ocean strategy needs to come with a reality check whether the opportunity found is real, or can be made real by the company. Chan kim and renee mauborgne wrote a bestselling book, blue ocean strategy, which has been translated into 43 languages. Their description of attempting to engage with your competitors, is a bloody red ocean. What makes blue ocean shift different than other strategy books. Red ocean strategy is a marketing strategy where there are a large number of firms selling closely related or even homogenous products. Featured on more than 300 bestseller lists across the globe. With the launch of itunes, apple unlocked a blue ocean of new market space in digital music that it has now dominated for more than a decade. The company was working in a highly competitive marketplace, with many other businesses offering similar services. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future.
Please someone tell me some specific companies products or services that are red 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. Here are a few examples of blue ocean strategic moves from a variety of different industries and sectors. We have come to think of them as red ocean traps, because they effectively anchor managers in red oceanscrowded market spaces where companies engage in bloody competition for market shareand. Nov 14, 2019 blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Chan kim and renee mauborgne 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. Blue ocean strategy tools and frameworks provide a compelling path to achieve just that. In a nutshell, this technique focuses on edging into new markets your. 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. 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. We all know well about red blue ocean strategy, how each ocean colour are works.
This blue ocean strategy and shift addresses exactly where i am. 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. After many years of business consulting and statistical analysis of more than 160 companies, w. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Advising a creative business in spain, i suggested that they adopt a blue ocean strategy. How to create uncontested market space and make the competition irrelevant, w. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w. Second, most books on strategy are either analytic or they. But they would go in it to apply blue ocean strategy or any idea and they were talking to the same customers. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. Blue ocean strategy is the complete opposite of the business strategy of direct competitioncalled red ocean strategyemployed by most companies, kim said.
Jan 10, 2018 this book has been called one of the best strategy books ever written. Blue ocean strategy pushes companies to create new industries and break away from the competition. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. Creative, digital and cultural enterprises can radically improve their businesses using blue ocean strategy. It helps the company in make huge profits as the product can be priced a little steep because of its. How to create uncontested market space and make the competition irrelevant pdf by w.
A blue ocean offers new opportunity for profitable and rapid growth to an entirely new market. Download for offline reading, highlight, bookmark or take notes while you read blue ocean strategy, expanded edition. I can now incorporate the blue ocean strategy and shift in my process. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. Sep 03, 2019 the blue and red ocean metaphor is a powerful one. Surface 3 and apple watch red oceans v blue oceans strategy. Aug 08, 2007 blue ocean strategy bos is the simultaneous pursuit of differentiation and lowcost to create new market space. As a result, they can be viewed as commodity businesses where price is the key differentiation. Blue ocean strategy is all about finding the right market and taking it, blue ocean. It can be difficult to succeed with the cutthroat competition in the business environment today. While this came in appendix a in the book, this is a good time to cover three industries with repeated blue ocean creation.
Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. In this article you will learn how to make your competition irrelevant and have sales and profit. Despite much investment and commitment, most firms struggle to do this. Sloane award for excellence in management consulting. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as.
Here we explore how entrepreneurs around the globe are using blue ocean strategy to break out of the red ocean and achieve strong results. Your competitors will eventually invade this space and turn it into another red ocean. Cell phones, and particularly smart phones manufacturers, are in red oceans. Top best strategy books no matter what profession you are in, you need a strategy to go from a to b.
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. They are competing very successfully in the already saturated red ocean of the shorthaul airline business. Because of similar products, the firms in the red ocean also face pricing competition from the other existing firms to drive up their business revenues. 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. Before we dive into blue ocean strategy examples, lets get clear on what a. Blue ocean strategy including examples and pdf download. A red ocean strategy ultimately leads to an organization choosing to follow one of two strategies differentiation or low cost.
Blue ocean strategy is a powerful framework for finding new business opportunities. Most markets are crowded with metoo companies fighting each other with cutthroat discounts and special offers. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. You have to constantly reinvent yourself and your company to continue to swim in the blue ocean. This is a highly influential and important book in the field of innovation and business strategy. What is blue ocean strategy about blue ocean strategy. In short, you create a blue ocean by focusing on the factors that customers really care about, while discarding factors they dont.
Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. It seems that most all of the fortune companies play in red oceans. 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. Thinkers50 strategy award for best business book of the decade. A different concept of market grabbing, is something called blue ocean. It requires the right research, patience and focus. To understand red ocean strategy let us begin by defining blue ocean strategy. Blue ocean strategy is a collection of wisdom, systematic process and framework which were formulated after extensive management research and studies of companies that exhibit characteristics of certain management principles that help these compa. Kim and mauborgne show how you can move out of this bloody red ocean into a different and more profitable blue ocean.
The authors use the term blue ocean strategy to refer to the new management approach they are selling in their book. In a red ocean market, everyone is just talking a different version of the sames thing to the same group of people vs a blue ocean where you guide new people over to your primary program. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Student questions i need company who is in red ocean. Chan kim is the codirector of the insead blue ocean strategy institute and a chair professor of strategy and international management at insead. This creates a new product offering that doesnt currently exist. A good example of red ocean strategy is the european airline operator ryanair or southwest if you like in the us. How to create uncontested market space and make the competition irrelevant, a book by professors w. The blue ocean strategy is a business book that has become mandatory for modern managers by proposing an organized structure to identify and implement differentiation in any industry and help you grow your business faster. This is where everyone would like to be and it is possible for you to have a blue ocean. Nov 04, 2018 want more secrets and tricks like the blue ocean strategy. Red ocean is where many firms compete, where they chase the same customers.
So blue ocean strategy is about how can any company or organization break out of the red ocean of. They also predict that a red ocean strategy is unlikely to create profitable growth in the future. 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 pool. Whichever is chosen the organization must align all activities with one of these strategic directions. Lets say you are a finance professional and you embarked on your journey as a financial analyst. Download it once and read it on your kindle device, pc, phones or tablets. Blue ocean strategy suggests that an organization should create new demand in an uncontested market space. Apple observed the flood of illegal music file sharing that began in the late 1990s, enabled by file sharing programs such as napster, kazaa, and limewire. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w. The risks of following a blue ocean strategy the adaptive.
Companies pursue blue ocean strategies to make competition irrelevant. The authors discuss the benefits for business owners to leave the red ocean. Apple and samsung together dominate the smart phone market today. Consider some of the well known blue oceans created by the new york police department, southwest airlines, cirque du soleil, casella wine yellowtail, nintendo wii, cemex cement, and the body shop. For example, competing factors in blue ocean strategy are similar to the definition of finite and infinite dimensions in funky business. In this post, well discuss how to change the way you approach blogging and revitalize your website using the blue ocean strategy. 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. The blue ocean strategy was developed by chan kim and renee mauborgne. These businesses struggle at operating and market differentiation from others.
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. These two authors created a simplistic way of describing the usual steps in trying to break through in any industry. Companies should instead look for new market space and ways to reinvent the industry. Even though, recently, white ocean has emerged in world business strategy. 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. Should an entrepreneur make a red ocean business or a blue ocean business asks brandon frere. How to create uncontested market space and make the. Should an entrepreneur make a red ocean business or a blue. A lot of businessesby definitionare not blue ocean companies. This blog article is a overview of some of the key points of the book by w. Click the link above or the picture below to read more. However if you go the traditional route which is to try to find a market that is filled with competition, the likelihood of you surviving is minimal, red ocean. Identify your job niche with the blue ocean strategy dummies.
The top inspiring quotes from blue ocean strategy you be. They have margin issues, problems with customer retention, growth problems, and are basically stuck in a rut. The strategy aims to capture new demand, and to make competition irrelevant by introducing a product with superior features. Blue ocean strategy is a book published in 2005 and written by w. Importance of the blue ocean strategy to a business. Is the blue ocean strategy book really a new approach or is. In red ocean companies try to surpass their rivals to take hold of a greater share of existing demand. Chan kim and renee mauborgne in their book blue ocean. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition. The database and research have continued to expand. An analytical study of red ocean and blue ocean strategy with. Mar 19, 2015 and then we saw companies putting the money behind this red ocean trap idea. Now you have become a senior analyst in your company. The premise of the book is that companies can succeed by creating.
But our research shows the future is on how to create. Nov 19, 2012 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. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Apr 30, 2016 red ocean strategy is a strategy which aims to fight and thrash the competition. Theyre fighting it out in the bloody red ocean of rising competition and lowering demand. Most blue oceans are created from within red oceans by expanding existing industry boundaries. The blue ocean strategy explains how to guide your business across seas with less competition and greater profitability.
Two of these are red ocean and blue ocean strategies, which were introduced by w. Luckily, there are many strategies you can use in order to gain an edge on your competition. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. How to create uncontested market space and make the competition irrelevant book online at best prices in india on. How to use the blue ocean strategy to revitalize your blog. Blue ocean strategy for creative businesses david parrish. Looking at these launches gives a lot of insight into how these two companies think, and the way they compete. 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 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. In our last blog post, we explored the fundamentals of blue ocean strategy. The only reason more big companies dont set sail for them, they suggest, is that the dominant focus of strategy work over the past twentyfive years has been on competitionbased red ocean.
Apr 02, 2015 surface 3 and apple watch red oceans v blue oceans strategy. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. The good news is, the shift to a happy blue ocean is possible. Blue ocean strategy seeks to make the competition irrelevant by creating a leap in value for both the company and its buyers. Blue ocean strategy is the most successful book on business masterplanning the economist. What are some successful examples of 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. But its not always clear how to create a blue ocean strategy for yourself.1061 957 247 366 227 214 696 1356 1345 513 21 1187 682 1421 420 896 1517 1513 133 522 1173 318 6 1136 1476 1429 1177 131 1089 1387 10 808 531 1256 739 512 1431 1195 784 393 446 57 785 7 879 650 44 215 1006 308