This blog article is a overview of some of the key points of the book by w. Some companies compete in what are called red ocean spaces so called because the oceans are red with blood. Blue ocean versus competitive strategy repub, erasmus. Blue ocean strategy is where a company creates a completely new market space or market category. Red ocean in blue oceans, demand is created rather than fought over. Companies face cutthroat competition within defined and accepted industry boundaries. Apr 21, 2009 blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. Pdf throughout history, the competition had been the dominant strategy of.
Click here for a quick look at the differences between red ocean and blue ocean strategy you will have to give an email address, fyi. Red ocean strategy focuses on competing in the existing market space with the current firms. With a focus of not just beating your competition but making them irrelevant, blue ocean strategy is all about thinking outside the box. Chan kim and renee mauborgne wrote a bestselling book, blue ocean strategy, which has been translated into 43 languages. Chan kim, and renee mauborgne of insead, a graduate business school with locations in europe and the middle east, put forth a simple, but effective argument as to why markets should be divided into two distinctly different categories. Each table is created as powerpoint tables, and are 100% editable. Blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w.
The red ocean represents the known market space where companies compete over a defined market segment. There fore the paper defines the clear differences and benefits of both. Jul 30, 2017 this strategy can work in the short run but it is a lot wiser for people to fast embrace the blue ocean strategy. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. The difference between traditional circuses and cirque du soleil is that the. The blue ocean, on the other hand, is calm, smooth, with lots of food and little or no competition. Only then can companies step up to the challenge of creating blue oceans in a smart and. See comparison between red and blue ocean strategies here in one simple table. Companies that are already in existence may make a solid decision to come out of the usual way of doing things and go into uncharted grounds. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. Your experience is your blue ocean strategy successful. Red ocean and blue ocean strategies comparison table slidemodel. Red ocean vs blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space.
Blue ocean vs red ocean strategies indira group of. Blue ocean strategy and sustainability for strategic management. Pdf thinking of the blue ocean strategy beyond the competition. Instead, kim and mauborgne 2005a, b, and c and kim et al.
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. Importance of the blue ocean strategy to a business bizfluent. Blue ocean vs red ocean strategies 6 major differences. This challenges the traditional approach, by claiming that strategy shapes structure, a view called reconstructionist. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades. This is where everyone would like to be and it is possible for you to have a blue ocean. The result of the competition is destruction, which draws the analogy of red blood in. History and background a video game console is just a computer that is made only. Blue ocean strategy is a book published in 2005 and written by w. This is a very competitive tough market, while a blue ocean.
Pdf blue ocean strategies and disruptive innovation. Watch this video to understand the essence of blue ocean strategy, the worldwide bestseller written by worldrenowned professors chan kim and renee mauborgne. Others have described the difference, but most of the red ocean businesses are on the edge of failure. What is the difference between blue ocean strategy and. Pdf blue ocean strategy as a tool for improving a companys. There is ample opportunity for growth that is both profitable and rapid. We all know that ocean is vast and limitless and in the case of marketing, the word ocean has paramount significance when it comes to blue and red ocean strategy. Now we have to clarify the difference between a strategy and the strategic. Essay about blue ocean strategy 825 words bartleby. In a nutshell, the main difference between a blue ocean strategy and a red ocean strategy is how crowded is the space you are competing in.
The authors conclude that the blueocean strategy or innovation approach is sustainable. Its called blue ocean strategy, and it was the subject of a talk by michael levie, coo of citizenm hotels. Theres a popular theory called the blue ocean strategy when a company enters an untapped market. Investigate on new technology and innovation and try new moves. In case of blue ocean strategy the emphasis of the company is on research and development because new products can only be made if company invests funds into research department whereas in case of red ocean strategy the emphasis is on good service and timely delivery to the customers because emphasis in this strategy is the satisfaction of the customers so that they do. Blue ocean strategy including examples and pdf download. The authors describe red oceans as the existing industries in a known market space. Six paths consulting bos vs ros blue ocean strategy.
Blue ocean strategies on february 12, 2020 blog, b2b strategy and messaging, virtual vp of marketing it can be difficult to succeed with the cutthroat competition in the business environment today. Innovation, new market space and creating demand are central characteristics. Red ocean there is a lot of competition, tons of shark in those waters, there is blood everywhere. 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. Sep 24, 2017 blue ocean strategy requires a different mindset. Basis red ocean strategy blue ocean strategy industries red oceans represent the. In order to understand more about the two concepts lets look at the difference between blue ocean strategy and red ocean strategy.
A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. How does blue ocean strategy differ from red ocean strategy. The authors use the metaphor of the blue ocean as a direct contrast to red oceans. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Blue ocean strategy is a powerful framework for finding new business opportunities. A red ocean is a saturated market with industry competitors. Blue ocean strategy makes companies to come out of ocean of bloody competition by creating market space which is uncontested and that makes the completion irrelevant. The authors use the terms blue oceans and red oceans to describe the entire market universe. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. These strategies are used in organizations by top level executive managers for long term organizational sustainability and to face or deviate from the competition.
The concept of blue ocean is based on the idea that the business universe is made up of two spaces or oceans, the red ocean and the blue ocean. What is the difference between red ocean and blue ocean. 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. Here below are the main differences between the two approaches to strategy. Sarah layton in blue ocean strategy on april 21, 2009. Blue ocean and red ocean strategies by arnav gupta on prezi. The red oceans are the markets where sharks fight for their share, while the blue oceans, competition is irrelevant. To answer your question, without understanding the generale issue of why profit is shrinking, i would suggest the blue ocean strategy. Swimming in the blue ocean, red ocean, and american ocean. How to create uncontested market space and make the competition irrelevant, a book by professors w. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Indeed, it can be argued that managers failure to realize the differences between red and blue ocean strategy lies behind the difficulties many companies. A blue ocean strategy may come out of a red ocean strategy. A red ocean is a metaphor for a market full of competitors.
Kim and mauborgne present to us in their book a fresh approach to 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 whereas red ocean is a current state. The premise of the book is that companies can succeed by creating. 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. The blue ocean strategy offers users a framework for creating uncontested market. But its not always clear how to create a blue ocean strategy for yourself. When it comes to competition, not every company has the same amount. Introducing the tools used in the blue ocean strategy. Comparing the red ocean strategy with the blue ocean strategy. Red ocean looks at cost saving or differentiation while blue ocean focuses on doing both.
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. Home blue ocean strategy powerpoint template red ocean and blue ocean strategies comparison table red ocean and blue ocean strategies comparison table this slide provides the comparison between strategic factors of traditional competitive strategies red oceans markets and the new innovative and unexplored markets blue ocean. 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, professors at insead. Every blue ocean move will ultimately turn into a red ocean. Reviewing the blue ocean strategy university of twente student.
These systems started to gain popularity in the 1970s with consoles that played only pong. Suhas mekhe isbs the concept is quite simple to understand. A strategy is a comprehensive plan to achieve the organizational aims. Red ocean and blue ocean strategies comparison table. So far, blue ocean support relies on a data base of case studies that does not statistically analyze overall patterns. In a red ocean there is blood in the water as firms are constantly fighting and competing for market share and customers. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. In this 5 minute blog, ill tell you what the difference is between a red ocean vs blue ocean and how you can survive a red ocean and swim into a more profitable and audible blue one. What is the difference between red ocean strategy and. Table 1 summarizes the difference between red ocean. The logic behind blue ocean strategy parts with traditional models focused on competing in existing market space. The most appropriate unit of analysis is the strategic move, the set of managerial actions and decisions involved in making a major marketcreating business offering. The authors discuss the benefits for business owners to leave the red ocean. Study 31 terms blue ocean strategy flashcards quizlet.
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 tends to. The metaphor of blue oceans the newly created markets contrasts the red oceans where the competition is fearsome. To illustrate the difference between the blue ocean strategy and red ocean strategy, ive made an infographic that lucidly explains the 6 vital differences between a red ocean market and a blue ocean market. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as. Strategic management, blue ocean strategy, red ocean strategy. Fundamental difference between red ocean strategy and blue ocean.
The blue ocean strategy concerns itself with creating uncontested market space. Since, dividing up existing demand and benchmarking the competitors, blue ocean strategy is regarding grow demand and break away from the competition. Usually that means it can be hard to differentiate your productsservices. Blue ocean strategy coexists alongside red ocean strategy competitive strategy. Value innovation is the cornerstone of blue ocean strategy. Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets. Ideal for strategy lectures or strategy analysis introduction, impress your audience with this appealing slide. These competitors may possess a competitive advantage driven by cost, differentiation, or niche market strategies. Make the valuecost tradeo align the whole system of a. Pdf innovation is the lifeblood of our global economy and the strategic priority for virtually every ceo around the world 1. Jun 02, 2016 blue ocean vs red ocean strategies 6 major differences red bull case study.
Fundamental difference between red ocean strategy and blue. In this paper i will discuss the differences between conventional red ocean strategies which are influenced by porter and kim and mauborgnes blue ocean strategy. In red oceans, there is a competitiveadvantage worldview, companies are often driven to outperform rivals and capture greater shares of existing or shrinking market space. Based on the book blue ocean strategy, a red ocean is defined as a market where multiple competitors fight for the same customers. How to create uncontested market space and make the competition irrelevant, professors w. The box itself, is the red ocean strategy, basically, the boundaries the firm set and should not cross. A blue ocean strategy in contrast, denote all the industries not in existence today the unknown market space, untainted by competition. Blue ocean strategy the maturity of an industry has brought a company swimming in a red ocean, which means price war strategy, according to a bestseller book titled blue ocean strategy that is written by w. The strategy clearly brings out the fact that the only way to beat competition is to stop trying to beat it. Red ocean marketing focuses on competition in the existing market space by directly competing with others.
The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy. Blue vs red ocean endicott masters in international admin. In blue oceans, demand is created rather than fought over. Dec 11, 2016 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. Red ocean and blue ocean strategy pdf torah books of the bible, blue ocean v. How does blue ocean strategy fundamentally differ from red ocean strategy. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w. What is the difference between red ocean and blue ocean strategy.
Your experience is your blue ocean strategy one of my favorite business books, alongside atlas shrugged by ayn rand and steve jobs by walt isaacson, is blue ocean strategy, by w. Even though, recently, white ocean has emerged in world business strategy. In this setting the key difference between the two strategic schools of. Blue ocean vs red ocean business strategies youtube. As market structure is changed by breaking the valuecost tradeoff, so are the rules of the game. Jan 21, 2015 in their 2005 book entitled, blue ocean strategy. The fighting results in a red sea, because much of the energy is spent competing. To sustain themselves in the marketplace, red ocean strategists focus on building advantages over the competition, usually by assessing what competitors do and striving to do it better. Of course, the blue ocean approach to this model would call. They represent businesses that may not be around today, or werent around until they came on to the scene. To give an example of a successful red ocean strategy, sam walton started a single store in a business where its largest competitor employed 0.
Competition will ultimately catch up but it typically takes about. There is a defined market, defined competitors and a typical way to run a business in any specific industry. Blue ocean vs red ocean strategies 6 major differences red bull case study. To sustain themselves in the marketplace, red ocean strategists. Insights from todays leading advisors and board members. To understand red ocean strategy let us begin by defining blue ocean strategy. Feb 14, 2014 forbes takes privacy seriously and is committed to transparency. But we believe that a blue ocean move will give the company a head start it requires to understand and conquer the existing competition. A business model describes the rationale of how an organization creates, delivers, and captures value economic, social, cultural, or other forms of. Thank you blue ocean and red ocean strategies bos vs ros overview blue ocean strategy studying the red ocean strategies with examples.
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