Value innovation strategy competes in an uncontested market space. In this article, we present the concept of blue ocean strategy and describe its defining characteristics. 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. This article explains what the blue ocean strategy is and how it can become a game changer for businesses stuck in stagnating markets. Most leadership efforts focus on cognitive and behavioral. Theeffect of blue ocean strategyon increasing competitive. This article uses examples from the real world to discuss the specifics of the blue ocean strategy. What is distinctive about blue ocean strategy as a theory. To do so, the commercial offers of selected airlines were compared to validate any attempts to apply the blue ocean strategy concept. By that we can see that there is a lot of interest by the business people and academics around the world about that subject. 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 page 1 main idea the best way to beat your competition is, in fact, to stop competing against them. List the factors the customer cares about, and current dimensions of competition.
In this article, we will look at 1 what is a blue ocean strategy. How is blue ocean strategy different from a classic differentiation strategy. In this article you will learn how to make your competition irrelevant and have sales and profit. Blue ocean strategy is a powerful framework for finding new business opportunities. Presentation mode open print download current view. This blog article is a overview of some of the key points of the book by w. In other words, when you go headtohead against rivals for a share of the existing market, this is like competing in a red ocean. Blue ocean strategy is about offering alternative services that have different functions and forms but the same purpose. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. From blue ocean strategy to blue ocean leadership july, the concepts of blue ocean leadership differ from traditional leadership models in that blue ocean leadership. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Achieved via the delivery of features that have a highest marginal benefit to customer needs.
This paper first critically analyzes the conjectures presented in the book. Information about the openaccess article reflections on blue ocean strategy. Eight key points of blue ocean strategy heres the essence of blue ocean strategy captured in eight key points. Insead is the home of the blue ocean strategy programme, which is designed to help executives successfully implement the blue ocean strategy in their organisations. The authors use the metaphor of the blue ocean as a direct contrast to red oceans. This article is an outgrowth of kim and mauborgnes. How to create uncontested market space and make the competition irrelevant, a book by professors w. The blue ocean strategy book has been sold over 3,5 million times, was published in 43 languages and is a bestseller across five continents. 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. 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. After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. We assess the profit and growth consequences of blue oceans and discuss why their creation is a rising imperative for companies in the future.
Blue ocean strategy is continuously being applied all over the world and is regularly featured in news articles. Blue ocean strategy is a strategy that advice companies to go to a new market, which interest. This article investigates the applicability of blue ocean strategy in regard to lowcost airlines in the civil airline industry. 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.
On the basis of a reconstructionist view of strategy, blue ocean strategy argues that industry structure can be changed endogenously by the strategic actions of micro. 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 blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. 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. You can follow blue ocean strategy and leadership on twitter and facebook and visit the website here. Blue ocean strategy mi major reference works wiley. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. The strategy canvas visualizes the current state of the industry and shows how a blue ocean strategy differs from incumbents. The blue ocean strategy bos is the strategic organizational approach that is based on the principle that companies should not engage in a competitive struggle. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets. Blue ocean strategy and its implications for businesses. Furthermore the blue ocean strategy was awarded with the best business book of 2005.
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. Chan kim and renee mauborgne in their book titled blue ocean strategy. What is the blue ocean strategy the term blue ocean was coined by two professors w. The blue ocean strategy represents the way in which to open up an untapped market space and create demand and growth opportunities kim and mauborgne, 2004. We believe that an understanding of blue ocean strategy will help todays companies as they. The idea in brief the best way to drive profitable growth. This article explains the blue ocean strategy, developed by w.
What is blue ocean strategy about blue ocean strategy. One of the most successful efforts to do so is the book blue ocean strategy, by. View blue ocean strategy research papers on academia. Companies pursue blue ocean strategies to make competition irrelevant. Find the most recent and compelling stories here of people and companies creating their own blue oceans in strategy and leadership. It requires the right research, patience and focus. 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. 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. But its not always clear how to create a blue ocean strategy for yourself. That is why i am suggesting that blue ocean strategy principles lend themselves well to the education sector. A company will have more success, fewer risks, and increased profits in a blue ocean market. A comparison with ansoffs, porters, and hax and wildes strategies in doaj. In 2005 they published blue ocean strategy, one of the most impactful strategy books every written. This, in turn, requires the alignment of the value, profit, and people propositions of a strategy in support of pursuing both differentiation and low cost.
Empirical validation of blue ocean strategy sustainability. Whilst i greatly value the portfolio of frameworks and tools in blue ocean strategy, for kim and mauborgne, unfortunately, everything that is successful is forcibly attributable to blue ocean thinking, like their assumption in this article that all innovation is necessarily disruptive. Article summary 2 blue ocean strategy a list of related materials, with annotations to guide further exploration of the article s ideas and applications 11 further reading competing in overcrowded industries is no way to sustain high performance. Article blue ocean strategy from theory to practice 2005. You can read blue ocean strategy if you want to learn how the authors suggest you do it, but there is a. Rather than concentrating on beating the competitors, the company must actually prioritize on making the competition irrelevant. Blue ocean strategy including examples and pdf download. Kim and mauborgne point out that untapped value is often hidden in complementary products and. Blue ocean strategy, one of the best seller books has received tremendous attention amongst scholars and practitioners. Second, we investigate if means suggested by authors to create a blue ocean are applicable in emerging markets. The study was anchored on the disruptive innovation theory and the theory of the blue ocean strategy. Blue ocean strategy introduces analytical tools to minimize risk. Competing in overcrowded industries is no way to sustain. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades.
1652 1590 839 2 463 109 828 795 426 340 1568 748 1421 942 1318 273 844 847 376 283 106 413 1055 998 862 1637 846 1380 1093 235 718 246 1279 1282 599