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Blue Ocean

In: Business and Management

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BLUE OCEAN STRATEGY
Authors: W. Chan Kim – Renee Mauborgne

How to Create Uncontested Market Space and Make the Competition Irrelevant

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I. THE STRATEGY

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New Market Space known market space

RED OCEAN Represent all the industries in existence today BLUE OCEAN Denote all the industries not in existence today space
Circus Industry Traditional Circus: • Target Market : Children • Dependent to : Star performance, animal shows • High fun & humor • High Thrills & dangers

unknown market

Cirque du Soleil: • Target Market : Adults • Not Dependent to Star performance & animal shows • Reduce fun & humor • Reduce Thrills & dangers • Unique Venue • Theme & Theater
Low Cost, High Price

High Cost, Low Price

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The Cornerstone of Blue Ocean Strategy

• Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proportion to buyers • Cost savings are made by eliminating and reducing the factors an industry competes on • Buyer values is lifted by raising & creating elements the industry has never offered • Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates

The Simultaneous Pursuit of Differentiation and Low Cost

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Red Ocean vs Blue Ocean

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The Six Principles of Blue Ocean Strategy

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Four Actions Framework

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The Case of Cirque du Soleil
Raise Unique venue

Eliminate Star Performers...

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