Why is blue ocean strategy important?

Why is blue ocean strategy important?

“In blue oceans, businesses create demand rather than fight over it.” In blue oceans, businesses create demand rather than fight over it. This strategy is the simultaneous pursuit of differentiation and low cost in an uncontested market space.

What is Blue Ocean Strategy with example?

The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of the Nintendo Wii. The Nintendo Wii launched in 2006 and at its heart is the concept of value innovation. This is a key principle of blue ocean strategy which sees low cost and differentiation being pursued simultaneously.

What makes Blue Ocean strategy different from other strategies?

Differentiation is a strategic choice that reflects the value-cost trade-off in a given market structure. Blue ocean strategy, by contrast, is about breaking the value-cost trade-off to open up new market space. It is about pursuing differentiation and low cost simultaneously.

Who created the blue ocean strategy?

W. Chan Kim

Is Netflix a blue ocean strategy?

Netflix. The first company that used the blue ocean strategy is Netflix, a popular subscription-based streaming service.

Which companies use blue ocean strategy?

Blue Ocean Strategy Examples

• Blue Ocean Strategy Examples:
• iTunes. 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.
• Bloomberg.
• Canon.
• The Ford Model T.
• Philips.
• Quicken.
• Ralph Lauren.

What confuse me about Blue Ocean Strategy?

A mistake that blue ocean strategy identifies is that companies confuse niches with new markets. Identifying a niche and selling to it might be profitable in the short term, but long-term value will come from bringing new customers to play in a blue ocean.

Is Starbucks a blue ocean strategy?

Starbucks is a Blue Ocean company. A blue ocean is where a company goes where the profits and growth are, and they leave the competition behind. Starbucks does this by offer delicious and one of a kind coffee recipes, and a unique atmosphere to enjoy them in.

Is Amazon a blue ocean strategy?

Amazon continually tries to create and implement blue ocean strategies in these areas introducing new products such as Kindle, drone delivery and virtual assistant solutions. Such innovations create uncontested space or blue oceans.

Does Apple use blue ocean strategy?

Apple use blue ocean strategy to remove competition and create a new market for new products. Blue ocean strategy helps to the Apple company to develop their own market rather than trying to beat competitors to reach top in the market. Apple iTunes is a good example of Apple blue ocean strategy.

Is Tesla a blue ocean strategy?

Tesla Motors, Inc. TSLA : This automobile manufacturer that sells battery-charged electric cars created a blue ocean for itself by designing a car that integrates the features of a green vehicle with that of a high-octane driven premium sports vehicle.

What is Red Ocean vs Blue Ocean?

Red Ocean vs. Blue Ocean Strategy

Red Ocean Strategy	Blue Ocean Strategy
Compete in existing market space.	Create uncontested market space.
Beat the competition.	Make the competition irrelevant.
Exploit existing demand.	Create and capture new demand.
Make the value-cost trade-off.	Break the value-cost trade-off.

How do people survive in the Red Ocean?

How to survive in a red ocean? In red oceans, business leaders and entrepreneurs are in a cage of creating innovation and competitive advantage as dominant business thinking. Consequently, they are rivaling head to head with their competition over the same existing customers.

Does Blue Ocean strategy work?

In a study conducted by Mauborgne and Kim in the run-up to their book, however, they found that companies with a Blue Ocean Strategy were able to maintain their dominance in the new market for an average of 10 to 15 years.

How do you use blue ocean strategy?

How Do You Create a Blue Ocean?

1. Define the current reality.
2. Identify a segment of customers who are only interested in or find value in a portion of the features of a product or service.
3. Alter the product or service to be inferior on the aspects that are less valued by your new target audience.

What do you mean by Blue Ocean Strategy?

Definition: ‘Blue Ocean Strategy is referred to a market for a product where there is no competition or very less competition. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition. …

What are the 4 steps in the blue ocean strategy process?

4-Step Blue Ocean Leadership Process

1. Step 1: See your leadership reality.
2. Step 2: Develop alternative Leadership Profiles.
3. Step 3: Select to-be Leadership Profiles.
4. Step 4: Institutionalize new leadership practices. Blue ocean leadership uses analytic tools like the Leadership Canvas and the Blue Ocean Leadership Grid to make this happen.

Is Airbnb a blue ocean strategy?

Uber & Airbnb Both Uber and Airbnb are great examples of the blue ocean strategy. Although Uber is operating in the people moving industry, it is not a taxi company, but a ridesharing service.

Where can I find blue ocean strategy?

Five Steps to Making a Blue Ocean Shift

1. Select the right scope for your blue ocean initiative and build your people’s confidence.
2. Next, get super clear about the current state of play.
3. Identify the hidden constraints that you can turn into opportunities.
4. Go from the big picture to creating practical blue ocean options.
5. Launch your blue ocean move.

How do you make a blue ocean strategy canvas?

Blue Ocean Strategy Formulation – The Strategy Canvas

1. Click here to get training on how to create a blue ocean sales & marketing strategy.
2. Eliminate Factors Taken For Granted.
3. Reduce Factors Below The Current Standard.
4. Raise Factors That Are Currently Not Meeting Market Desires.
5. Create Factors Never Before Offered.
6. Look Across Alternative Industries.

What is a blue ocean strategy canvas?

Chan Kim and Renée Mauborgne’s Strategy Canvas is a central diagnostic tool and an action framework that graphically captures, in one simple picture, the current strategic landscape and the future prospects for an organization.

Why do many firms fail to successfully implement a blue ocean strategy?

Why do many firms fail to successfully implement a blue ocean strategy? A firm that pursues a differentiation strategy will often find that the added expense of offering new or unique product features offsets the increase in perceived value, and profit margins begin to erode.

What is strategy canvas explain?

A strategy canvas is basically a line graph that plots functions/factors against importance for a company or an organisation and then overlays competitors or industry benchmarks. In this way, information can be built to help formulate a competitive strategy.

What is the red ocean strategy?

A red ocean strategy involves competing in industries that are currently in existence. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price.

What is the value curve?

A Value Curve is a diagram which can be used to show instantly where value is created within an organization’s products and services. The Value Curve shows graphically the way the company or the industry configures its consumer offering. It is thus a powerful tool to create new market spaces (blue ocean strategy).

What is the four actions framework?

The four action framework points out four key actions to take into account to refine existing products. Those are: raise, reduce, eliminate, and create. To plot the available consumer products in a marketplace against the company’s ability to provide value and thus be competitive over time.

What is Blue Ocean Strategy PPT?

Value Innovation The Cornerstone of Blue Ocean Strategy value creation focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space Technology driven.

What is ERRC grid?

The Eliminate-Reduce-Raise-Create (ERRC) Grid is an essential tool of blue ocean strategy developed by Chan Kim and Renée Mauborgne. It is a simple matrix like tool that drives companies to focus simultaneously on eliminating and reducing, as well as raising and creating while unlocking a new blue ocean.

Which are the elements of four action framework of blue ocean strategy?

The Four Actions Framework is most useful when you help create value innovation and break the value-cost trade-off. W. Chan Kim and Renée Mauborgne use terms red and blue oceans to describe the market universe. They say that ‘red oceans are all the industries in existence today—the known market space.

What is value innovation in Blue Ocean Strategy?

Value innovation is a key principle of “blue ocean strategy,” a business approach that focuses on creating new market spaces instead of fighting competitors existing market share. The goal of value innovation is to create new demand and change the market enough to render the competition irrelevant in that market.