...Blue Ocean Strategy Paper Sarah Van Wyk MKT/421 April 19, 2015 Professor Phyllis Levith Blue Ocean Strategy Paper Blue ocean strategy is a business tactic that separates the market into “blue” and “red” oceans. Blue oceans relate to all of the industries that do not currently exist in today’s society. They are the “unknown market space, untainted by competition, where demand is created rather than fought over” (W. Chan Kim, 2004). In direct contrast to this notion are red oceans, which relate to existing markets with substantial competition and where demand is already severely exploited. Further reading will provide the importance of the blue ocean strategy in business, an example of a product that has captured this strategy, and an alternative red ocean scenario for that same product. What is Blue Ocean Strategy? Blue ocean strategy is a fresh way of thinking in the business world. It is an innovative approach that restructures the corporate mentality to focus on carving out new paths for business and industry. Its prime emphasis is to help companies better stand apart from their competition yet still keep costs low and is achieved by following four basic principles. The first is creating uncontested market space, followed by concentrating on the big picture, then reaching beyond existing demand and lastly, mastering the strategic sequence (W. Chan Kim, 2004). With these guidelines, blue ocean strategies capture new demand, make the competition irrelevant, build differentiation...
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...MKT 421 Week 4 Blue Ocean Strategy Paper Blue Ocean Strategy - Introduction The blue ocean strategy in marketing is a unique approach to building a customer base. Rather than try to compete in a crowded marketplace with existing companies, a blue ocean strategy looks to build an entirely new market segment that has not other existing firms. With the rapid growth of technology and globalization, the importance of a blue ocean strategy has grown in recent years. The following essay will analyze the blue ocean strategy and offer suggestions on how it can be employed in the modern business environment. What is a Blue Ocean Strategy in Marketing? Companies must consider the four Ps of marketing when developing a new offering, which include product, placement, price, and promotion. In order to compete successfully, it is necessary to give consumers a certain value proposition. For example, a firm can offer a product at a lower price or at a higher quality than what is presently offered by other firms. But what if a firm could avoid having to deal with competition altogether? This is exactly what the blue ocean strategy attempts to do – create a new marketplace that is free of competitors. Marketers build an entirely new product or service that is currently unknown to consumers. It is necessary to thoroughly educate the public about the new product in order to gain interest and confidence. Once this has been completed, the new product will be positioned in point that provides...
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...Blue Ocean Strategy Paper Jamie Carbary MKT 421 Professor William Alan McIntyre November 23rd, 2015 Blue Ocean Strategy Paper Introduction In the current competitive market, businesses often adopt several strategies so as to compete effectively. These strategic moves are usually derived from market – competing strategies. Innovation and creativity are the keys whereby organizations can focus on finding and creating new market spaces resulting in the opening of the new market and increasing their profit margins. The term “Blue Ocean” denotes all the industries that are not in existence today (Kim & Mauborgne, 2004). It includes unknown market and is untainted by competitions. In blue oceans, demand is created rather than fought over. Thus, there is an ample opportunity for growth that is rapid and profitable too. On the other hand "Red Ocean" is regarded as the existing market space with numerous risks and limited opportunities with limited profit margin, whereby companies strive to sustain their position (Gruwer, 2014). The companies operate in saturated market conditions with numerous small and big players and try hard to exploit the demand of customers. Blue Ocean Strategy Blue ocean strategy is the new way of thinking, a new strategic mind – set, a bold and new path to winning the future. It is grounded in analysis and energizes everyone. Blue ocean strategy focuses on creating new markets rather than competing with existing ones so as to stand apart and keep...
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...Blue Ocean Strategy Paper The blue ocean strategy in marketing is a business theory that helps search for ways to gain uncontested market space, this is seen as a unique approach to building a customer base. The following essay will analyze the blue ocean strategy and its importance, while providing a product or service that might be considered a blue ocean strategy. Lastly, an alternative red ocean move for the same product or service along with the pros and cons of that strategy will be discussed. Blue Ocean Strategy was developed by W. Chan Kim and Renee Mauborgne. “It describes how companies traditionally work in "red ocean" conditions, where businesses viciously fight against each other for a share of the marketplace. Instead, according to the blue ocean strategy, organizations should find a way to work in a marketplace that is free of competitors.” ("Blue Ocean Strategy", 2015). The purpose of the Blue Ocean strategy is to create an uncontested market place while making the competition irrelevant. By doing so this creates and captures new demands and breaks the value-cost trade off. In result, this aligns the whole system of a business’s activities in pursuit of differentiation and low cost. This strategy is important for businesses because in order to make your competition irrelevant, you must leave the red ocean and go to the blue ocean. Once in the blue ocean, you only need to create demand for your product or service. Examples of Blue Ocean Moves There are...
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...Blue Ocean Strategy Paper 01/05/15 MKT/421 Blue Ocean Strategy – Introduction When a company is about to enter the market, they typically spend their time trying to create a strategy to overcome their competitors that already exist in the market. In the book Blue Ocean Strategy authors W. Chan Kim and Renée Maugorgne explain how to create your own blue ocean. A blue ocean is the complete opposite of the existing red oceans in the market that quickly drown a new company before they can gain success. Basing their studies on 150 strategic business moves that stretch over 300 years and 30 different industries. Kim and Mauborgne express the importance of 6 principles a company needs in order to create their own blue ocean. The six principles show how to reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome organizational hurdles, and build execution into strategy (Blue Ocean Strategy, 2014). What is Blue Ocean Strategy in Marketing? The Blue Ocean Strategy is essentially creating your own unique market where you have absolutely no competitors therefore creating your own demand from consumers. This strategy is important because it has been proven to be wildly successful and is trending in all types of industries, meaning this strategy isn’t going away and it is a proven strategy, especially in the ever changing and expanding tech industry. In a ‘blue ocean’ a company doesn’t need strategize on...
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...Blue Ocean Strategy Paper KT/421 What is Blue Ocean Strategy and its importance Blue Ocean strategy is a strategic form of marketing which ideal model is to be different in a new market place. Blue Ocean strategy goal is to create a new way of marketing instead of common forms of marketing such as competiveness. Another one of Blue Ocean strategy goal is to set the pace with unique products with profit gain in new markets. Blue Ocean believes in leaving the ways of Red Ocean which is characterized by unmorally hills of competitions. Blue Ocean strategy is imperative because most prospects in Red Ocean established market places are consistently reducing. Today’s technology has drastically improved industrial production which is now allowing suppliers to produce product at a massive amount in a short amount of time. Blue Ocean is also important in the American Market. In the American Market brands are becoming more and more similar. Therefore, customers are no longer basing their purchase decisions on brands but more so on prices. Product or Service that night be considered a Blue Ocean Strategy An acceptable example of a Blue Ocean Action is Apple’s iTunes. In 2003 Apple confused into the agenda music amplitude as a provider and benefactor of agreeable – and signaled the end of the antecedent innovation, the CD. Apple created iTunes as online account area customers could download legal, top superior songs for a actual reasonable price. ...
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...Blue Ocean Strategy Paper Julian Mackie MKT/421 November 24, 2014 Stephen Grothe Blue Ocean Strategy Paper When you think about a Blue Ocean Strategy, there are three words that come to mind. The first one is innovative. Blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value while decreasing costs. It was introduced by W. Chan Kim and Renee Mauborgne in their best-selling book of the same name. The second word would be intelligence.” The Blue ocean strategy made it so companies would be able to come up with a whole new way to do business in either an industry or invent a new way of doing business.” ("Financial Times", 2014). The third in final word would be strategic. There are a few guidelines that were proposed to companies seeking to create blue oceans. The first guideline would be to identify the key features/dimensions that currently define a product and or service. The second guideline is to identify a group of customers who only value a subset of these features. These customers may be currently using lower end alternatives, or maybe very different from the current customers while having needs that similar at some fundamental level. The third guideline is to make a product or service better on the dimensions valued by the new target customers. “This step is counter-intuitive but necessary in order to create value while decreasing cost. The final...
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...Blue Ocean Strategy Paper In today’s global economy, many companies are competing each and every day for the same customers. On the other hand, the elite companies are sailing in uncontested waters by being innovative and creative in obtaining profit and growth. Research spanning over 100 years in thirty industries was conducted, and the result was astonishing. The conclusion of the research was that companies need to stop competing head-on in existing industry space because they should make competition irrelevant. How do you make competition irrelevant? What product or service can fall in this innovative strategy? What is the alternative to this strategy and what are the pros and cons? First of all, how to make competition irrelevant? Blue Ocean created by W. Chan. Kim and Renee Mauborgn is Strategy based on 100 years long study of more than 150 strategic moves, spanning more than 30 industries. It pursues differential and low cost. Blue ocean strategy is based on the simultaneous pursuit of differentiation and low cost. It creates uncontested market space because it doesn’t aim at competing nor does it aim at outperforming the competition; rather it aims at making the competition irrelevant by reconstructing the industry standards and boundaries. Blue ocean strategy uses tools and framework to break away from the competition. By doing so, it creates new market space. Blue ocean strategy starts by assessing the current state of play in an industry to exploring the new market...
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...Blue Ocean Strategy Paper February 2, 2015 MKT/421 Ellen Carter Within the world of business it can be considered a battlefield. Companies in the same industry are in constant battle with each other. They are competing every day for the same customers, trying to outwit the other with every move they make. This strategic way of business is referred to as the red ocean strategy. Companies focus on building advantages over their competition, taking whatever a competitor does and attempting to do it better. While this has worked for companies for over one hundred years, it is becoming more difficult for companies to distinguish themselves from one another in their respective industry. For example, Colgate and Crest have lost their core customers over the years, now the only way for one to out sale the other is to drop the price. With this happening, the vision for profits and growth is becoming immensely blurred. Imagine if a company lived beyond these boundaries, or outside of this battlefield. One would be able to capitalize on the abundance of opportunity to grow. There have been numerous innovators who have succeeded at restructuring an industry, or creating a completely different industry. This business strategy is considered the blue ocean strategy. Blue Ocean refers to the unchartered waters that companies have yet to explore. Companies practicing the blue ocean strategy attempt to create demand for a product instead of focusing on the supply of a product. If one...
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...Blue Ocean Strategy Paper August 20, 2015 MKT/421 Ronald Rouillier The Blue Ocean Strategy is invented by Professors Renee Mauborgne and W. Chan Kim. This strategy proposes companies do better when they search for “uncontested market space” instead of engrossing in traditional competition. It entails how businesses fight for marketspace instead of finding or creating different ways to work in the marketplace that is competitor free. This strategy focuses on generating new distinctive merchandise using innovation as the launch for these new products. This strategy makes the competition irrelevant, captures and creates new demand, and creates unchallenged market space. “Blue ocean strategy presents a largely descriptive approach into assessing how successful companies are capable of creating a business model transformations that provide a foundation for creating completely new value offerings to the marketplace,” (Mauborgne, pg., 49,8. 2005). To find a subtle blue ocean, the professors suggest that entrepreneurs and businesses contemplate the “Four Actions Framework.” The Four Action Framework is to create new buyer constituents in an innovative way and consists of Eliminate, Raise, Reduce, and Create. Blue Ocean Strategy Example Southwest airlines are known as the low-cost carrier. This company anticipated alternative industries by creating innovative and better benefits for their cost- sensitive and non-customer travelers. Southwest adapted the following strategies...
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...Blue Ocean Strategy Paper MKT/421 April 6, 2015 Businesses constantly look for ways to stand out in their market industry. There are two main strategy philosophies that they use to accomplish this goal. Those philosophies are the red ocean strategy and the blue ocean strategy. These ideals may sound strange, but the names make sense once a person understands the principles behind them. Companies looking to make themselves stand out from others must decide on the direction that they want their business to take. One method that they use is known as the red ocean method. Under this strategy, companies try to make themselves stand out from their competition by making small tweaks to their business without ever really changing their business model. Red oceans have heavily contested markets with extreme competition, where profits and growth are minimal (Kam, 2008). This type of market is easy for new companies to enter because it is already established, but it is difficult stand out in or make a large profit. Companies operating under the blue ocean strategy seek to create a whole new type of industry. The goal here is not to compete with other like companies, but to make the competition irrelevant by creating new products and services (Investopedia, 2015). Under this type of operation, both new and existing companies seek to stand out by having no competition. This can involve creating a new service or by changing the way that they operate. These types...
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...Introduction The blue ocean strategy in the environment of marketing is an extraordinary way to embark on creating a monopolistic customer base. It describes how the blue ocean strategy looks to find ways to build a new market segment that has no current existing businesses and without competing in a crowded marketplace with existing companies. As new technological innovations emerge daily, blue ocean strategy is rapidly growing. The paper will intel the characteristics of the blue ocean strategy while providing ideas of how to employ them into the business environment. Description and Importance of Blue Ocean Strategy Blue Ocean Strategy is a non-fiction business book written in 2005 by W. Chan Kim and Renee Mauborgne. Kim and Mauborgne sought to find a more vigorous strategy approach than Harvard Professor Michael Porter’s “five forces”. They argued that Professor Porter’s strategy would have businesses remaining in the “red ocean” where there’s heavy competition and a very crowded marketplace. The importance of the Blue Ocean Strategy is to encourage existing business customers to move from the red ocean which is characterized as a bloody, shark infested waters competition marketing environment to the blue ocean waters than has no competitors and ample amount of space to evolve new beginnings. Kim and Mauborgne used the Cirque du Soleil as an example of how the Blue Ocean Strategy can be successful. “Despite a long-term decline in the circus industry, Cirque du Soleil...
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...Blue Ocean Strategy Effectively marketing a product or service can be the difference between success and failure. Companies who offer products or services that no other company can compete with are the easiest way to be successful if consumers found the product or service valuable. Coming up with a way to create value by marketing a product differently is one blue ocean strategy. This paper will explain the blue ocean strategy; highlight an example of the strategy and an alternative red ocean move from the same industry. The blue ocean strategy is designed to target markets where there is little or no competition. This strategy is aimed at creating products or services that no other company has before. If the product or service has been tried in the past and failed, it is possible timing may have been a part of the failure (Blue, 2015). There are four questions which can help create value for a company’s product or service. What can the products or services provide that will be viewed above the industry standard? What things within the industry competition can be removed? Are there any factors that could be reduced below industry standards in order to create value? What can be created in this industry that no one else has offered before (Blue Ocean Strategy, 2015)? Coming up with solutions and answers to each of these questions can move a product farther into the blue ocean where competition has no effect on your product or service. These questions can also help companies understand...
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...Contents: 1 Introduction 2 Frameworks and analytics for Blue Ocean Strategy * Strategy Canvas * The Four Actions Framework * Eliminate- Reduce- Raise- Create Grid * Pioneer-Migrator-Settler Map * Buyer utility Map * Three Tiers of Noncustomers * Sequence of the Blue Ocean Strategy 3 Conclusion 4 Appendix Introduction: Due to the rapid development of logistic, communication tools, the world has become ‘smaller’ and ‘flatter’ than ever. Instead of competing with the local firms, nowadays companies would have to compete in the global environment. The entry and trade barriers for most of the market have been eliminated due to the regulations and the growth of technology. Here, the concept of ‘Blue Oceans’ comes into place. We can imagine a market universe consisted of two sorts of oceans: Red oceans and blue Oceans. Red oceans represent all the existed industries and market nowadays. In the red oceans, industry boundaries and standard are well defined and accepted, the formation and situation of the market can be understand and work out easily. The accelerated technological advances and the trend toward globalization have substantially improved industrial productivity and have enabled suppliers to produce an array of products and services, which lead to the supply exceeds demand. Due to the removal of trade barriers between nations and regions, the information on products and prices become more globally available. As a result...
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...Ninth AIMS International Conference on Management January 1-4, 2012 Blue Ocean Strategy – A Critical Analysis of Application on Indian Companies Smita Shukla smitashukla_in@yahoo.com University of Mumbai, Mumbai Blue Ocean Strategy which is much discussed strategic approach that needs to be followed by such companies that wish to beat the market competition. The paper analyses the practical application of Blue Ocean strategy in case of Indian companies. This paper also discusses the risk factors/negatives associated with the emergence of application of Blue Ocean Strategy in India/worldwide. 1. Introduction According to the well-known authors and management thinkers, W. Chan Kim and Renee Mauborgne, ‘the only way to beat the competition is to stop trying to beat the competition’. According to them, the entire market universe can be divided into two oceans: Red Ocean and Blue Ocean. Red Ocean is representative of all such industries/products which already exist and are thus representative of the known market space. Blue Oceans denote the industries/products not in existence today. Blue Oceans thus represent the unknown market space. In the Red Ocean industry boundaries are defined and well accepted. This means the existing competition is well known in the market space and the players in the market try to outperform their rivals to get greater share of the existing market demand. As existing market space gets crowded prospects for good profit and growth in future are...
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