Challenges in the implementation of blue ocean strategies. Red ocean and blue ocean approach to industry boundaries. Therefore the market is usually heavily populated by competition and there are a set of rules that is known. Blue ocean strategy theory and criticism 1246 words.
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. A critical analysis on the blue ocean strategy and an. Blue ocean strategy and sustainability for strategic. Since, the industries are in a state of non existence, there is absolutely no relevance of peer. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. Blue ocean strategy critical analysis of blue ocean strategy. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Blue ocean strategy theory and criticism essay 1258 words. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. Critically assess the strengths and limitations of this approach to pursuing competitive advantage.
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. While blue ocean strategy may have worked for these particular firms it leaves open the critical question whether it can be used as a generic. Blue ocean strategy bos is a management concept which. Companies should instead look for new market space and ways to reinvent the industry. Value innovation strategy competes in an uncontested market space. Ocean strategy ros, relevance of applying bos, applications, critics, findings. First, the theory is explained with a reallife example. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. Blue ocean strategy, organizational performance, red ocean. Blue ocean strategy and its implications for businesses.
The strategy canvas provides a highly visual tool to help look at future options. Blue ocean strategy is a new way of thinking, a new strategic mindset, a. All in all, blue ocean strategy is a book worth reading. List the factors the customer cares about, and current dimensions of competition. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. The blue ocean strategy explains how to guide your business across seas with less competition and greater profitability. In the past decades, some popular strategic frameworks for the creation of new business models have been developed. Blue ocean strategy is a business strategy book, first published on february 3, 2005 by the harvard business school press. The book titled blue ocean strategy is not helpful to management dont buy it and if you already have it dump it.
This blog article is a overview of some of the key points of the book by w. A pathbreaking strategy known as blue ocean strategy is a pacifist marketing scheme and is considered a strategic planning tool for assessing a business. How to create uncontested market space and make the competition irrelevantby. 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. A critical analysis on the blue ocean strategy and an approach for its integration into the product development process article pdf available january 20 with 2,376 reads how we measure reads. Tru group inc blue ocean strategy belongs in the dead sea. Of course, the blue ocean approach to this model would call. This international bestselling book sold more than a million copies in its first year of publication, and has. Blue ocean strategy formulation the four principles of.
The blue ocean strategy bos challenges companies to make competition irrelevant instead of stealing from competitors and competing in the bloody red ocean. What is distinctive about blue ocean strategy as a theory. It requires the right research, patience and focus. Blue ocean strategy how to create uncontested market. Chan kim and renee mauborgne, professors at insead. What is blue ocean strategy about blue ocean strategy. A company will have more success, fewer risks, and increased profits in a blue ocean market. Red oceans represents all the industries in existence today. Rather than concentrating on beating the competitors, the company must actually prioritize on making the competition irrelevant. Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool.
Pdf a critical analysis on the blue ocean strategy and. The strategy canvas visualizes the current state of the industry and shows how a blue ocean strategy differs from incumbents. A critical analysis on the blue ocean strategy and an approach for its integration into product. Ocean strategy, red or blue, belongs in the dead sea. Blue ocean strategy in 2005, renee mauborgne and w. Red is basically one would say as a standard operating. Furthermore the blue ocean strategy was awarded with the best business book of 2005. Reviewing the blue ocean strategy university of twente student. Red ocean markets are large and the rate of product innovation is low.
Pdf a study on the product development process pdp, the strategic planning process spp and the blue ocean strategy bos has been. It is a consistent pattern of strategic thinking behind the creation of new markets and industries where demand is. This is competition in pricing, and its a race to the bottom. Blue ocean strategy formulation the four principles of strategy formation this blog article is a summary of the book by w. Cases are real life examples of companies or organizations used in scientific studies. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. The only way to beat the competition is to stop trying to beat the competition. Blue ocean strategy focuses on the ability to create new market space where there is no competition and where the demand for the services becomes uncontested. Blue ocean strategy is a concept that has been pioneered by insead professors, w. 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 sea without competitors.
How is blue ocean strategy different from a classic differentiation strategy. One is to launch completely new industries, as ebay did with online auctions. A critical analysis on the blue ocean strategy and an approach for its integration into the product development process article pdf available january. Mauborgne, 2006 competition irrelevant ignoring products and competition limitations red ocean versus blue ocean existing market new. They develop a blue ocean strategy bos which is aimed at systematically identifying blue oceans, characterised by. Marketing strategy every blue ocean will eventually turn. This study discusses blue ocean strategy in the context of the strategic planning process spp and the product development process pdp. Indeed, blue ocean strategy is more about competitive analysis within industries than anything else in developing and proving their theory, appendix 8, there is an overuse of economic theories such as supply, demand, long run average cost curve, utility 14 15 long found to be difficult to associate with the real world of business.
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 concept of blue ocean is based on the idea that the business universe is made up. Kim and mauborgnes 2004 blue ocean strategy is one of the major contributions in that context. Chan kim came up with the blue ocean strategy, which tries to find other open markets to sell. The big blue ocean promise took over the business world, but also aroused a great wave of criticism, partially justifiedwith the strongest claim being that the text carries no novelty beyond ted levitts old differentiation directive, remolded with the trendy belief in the importance of innovation. Porters five forces analysis is a framework for industry analysis and business strategy development formed by michael e. Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level. Blue oceans focus on the critical value factors and eliminate unnecessary factors. 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. This strategy, which is based on extensive research of hundreds of companies spanning across decades and including several industries, proclaims that instead of battling competitors, companies can create new markets for themselves. Blue ocean strategy theory and criticism 1246 words 5 pages.
Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. Accordingly, this essay examines the blue ocean strategy concept in the following order. Porters five forces model and blue ocean strategy kim. Of course, the blueocean approach to this model would call. You may or may not agree with the central philosophy, but you will be inspired. Because blue ocean is an andand, not an eitheror, strategy. Pdf a critical analysis on the blue ocean strategy and an. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Critique of blue ocean strategy by fatma turan on prezi. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand.
Blue ocean strategy including examples and pdf download. Eight key points of blue ocean strategy heres the essence of blue ocean strategy captured in eight key points. Outline the main components of kim and mauborgnes 2004 concept of blue ocean strategy. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was. Examining the emergence and evolution of blue ocean strategy. Blue ocean strategy can be applied across sectors or businesses. Blue ocean strategy is a landmark idea founded by w. Exploration of possible integration of blue ocean strategy into the product development process.
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. 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. Is it possible to apply blue ocean strategy for tourism businesses. Companies pursue blue ocean strategies to make competition irrelevant. Blue ocean strategy is a strategy that advice companies to go to.
The cornerstone of the blue ocean strategy is value innovation. To make it clear and justifying my true insight about this book, ill explain a piece of red before we go deep into the blue ocean. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. It should be noted that most new business launches today are launches in the red ocean domain. Doc a critique on the blue ocean strategy angelo tubac. Achieved via the delivery of features that have a highest marginal benefit to customer needs.
In the blue ocean strategy the terms red and blue oceans denote the market universe. Chan kim and renee mauborgne in the indie business book club. Blue ocean strategy introduces analytical tools to minimize risk. Leave the statistics aside and see the big picture 3.
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