In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. A blue ocean is an analogy to describe the wider, deeper potential to be found in unexplored market space. A blue ocean is vast, deep, and powerful in terms of profitable growth.
From assessing the current state of play in an industry, to exploring the six paths to new market space, to understanding how to convert noncustomers into customers, blue ocean strategy and shift provides a systematic process to create your blue ocean.
Learn how to put these practical market-creating tools into practice to move from red ocean of competition to blue oceans of new market space and to do so in a way that people own and drive the process.
Recognized as one of the most iconic and impactful strategy books ever written, Blue Ocean Strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool.
The Blue Ocean framework is a strategic approach that how companies can create new markets where there is little or no competition and therefore they can earn above-average profits. The blue ocean takes you from market competing to market creating.
The red ocean strategy takes a structuralist view of the market where all parties accept predefined structures within an industry and continue to compete within these. The red ocean strategy takes a structuralist view of the market where all parties accept predefined structures within an industry and continue to compete within these. To sustain this competition, companies focus on building advantages over their competition. All gains are at the loss of another company and wealth is captured and redistributed instead of being created.
The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. The structure can be created or recreated by the steps taken by players in the market. Strategy and thinking is not limited by preconceived barriersStrategy and thinking is not limited by preconceived barriers, and a shift happens from a focus on the supply side to a focus on the demand side. Value innovation takes precedence over competing blindly with a simultaneous focus on differentiation and cost effectiveness.
The Blue Ocean approach requires leaders to expand their mental horizons, in much the same way as designing a business model. Developing new mental models and challenging the existing business logic within the industry is critical. In the guide below I provide the first steps to developing a blue ocean strategy along with the tools to use.
To successfully implement blue ocean thinking you need to have the right toolkit and process. The tools aligned to the framework and process are a powerful way to systematically identify blue ocean strategies. Once teams are familiar with the tools, the shift in mindset becomes easier and the process becomes embedded in the way of creatively framing opportunities.
The Strategy Canvas is the cornerstone of the blue ocean strategy. The strategy canvas is used to plot the current main dimensions that are valued by customers and used by you and your competition. Normally there are lots of overlaps between competitors and minor differences in a market.
Mis. Renée Mauborgne just like Mr. W.Chan.Kim has an executive role at the INSEAD Blue Ocean Strategy Institute as a co-director, and she is a Distinguished Fellow at INSEAD, where she teaches the different blue ocean strategies and management techniques as we said earlier.
However, this revenue growth produced only 39% of the total profits. Already the new businesses, in blue oceans, have almost reversed the numbers: their expansion accounted for 38% of total revenues and 61% of profits.
To be successful, an innovation in value must provide savings and a new benefit that the consumer can immediately realize. If you want to go to the blue ocean, make sure your value innovation is accessible enough that most customers realize its benefit and differential shortly.
Creating a blue ocean for your company is based on believing that to be successful in business you have to generate and capture more value and not attack and compete with established companies where margins are low, and prices always fall.
"The Blue Ocean Strategy" shows that many of the business strategy of the past few decades had focused on competition. In these strategies, called by the authors W. Chan Kim and Renée Mauborgne as red oceans, market structures are known, and companies try to outperform their rivals for a part of an existing demand.
In contrast, the blue ocean strategy creates new market spaces, building new demands and results in sustainable growth. Here, the structure of the market will be explained.
Thinking about it, the street artist Guy Laliberté decided to escape the red ocean of the circuses and create a blue ocean of theatrical entertainment: the Cirque du Soleil. His attractions combine the circus with the theater, featuring acrobatics and natural talents embedded in a story with original music.
By focusing on the critical attributes that drive buyers to choose between alternative industries and eliminate or reduce everything else, it is possible to create the blue ocean of a new market space.
The main idea of this section, according to Kim and Mauborgne, is that you should involve people in implementing a blue ocean project. In this overview, the authors then define three principles to build this involvement.
For example, Microsoft, to come out of the decline, needed to work on creating a more balanced portfolio in all businesses that not only compete in the red oceans, but also create blue oceans that will renew, expand, and build their brand value.
This book is a perfect advisor to understand how to rebuild and transform your business into a more competitive entity. Even if others follow you to your Blue Ocean. Recognized as one of the most iconic and impactful strategy books ever written, Blue Ocean Strategy, now updated with fresh content from the authors, argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Blue Ocean Strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any organization can use to create and capture their own blue oceans. Overall, a very well thought out and an effectively organized book containing ideas that can be applied immediately.
It can be intimidating to approach your business from this big picture perspective, but it is exciting at the same time. If you do manage to find a section of blue ocean that you can claim as your own, it just might go down as the leading accomplishment of your professional career.
In Blue Ocean Strategy, INSEAD business professors W. Chan Kim and Renée Mauborgne argue that the solution to business growth and success is to operate in an uncontested market. They use the metaphor of a blue ocean to represent an uncontested market, and they contrast it with a red ocean, a marketplace where fierce competition has stained the water with the blood of the combatants.
In Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne argue that the solution to business growth and success is to operate in an uncontested market. They use the metaphor of a blue ocean to represent an uncontested market, and they contrast it with a red ocean, a marketplace where fierce competition has stained the water with the blood of the combatants. Their book provides a strategy for finding the blue ocean where your company can prosper.
In Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne argue that the solution to business growth and success is to operate in an uncontested market, which they call a blue ocean, in contrast to a red ocean, a marketplace where fierce competition has stained the water with the blood of the combatants. They observe that much of the literature on business strategy focuses on red ocean strategies, that is, outperforming rivals to secure a greater share of a static market. However, they argue that red-ocean competition erodes profits so much that the key to building a successful business is to create a blue ocean.
Before you can develop a strategy for transforming the market, you need to get a firm, clear understanding of the current state of the industry and how your company fits in. To do so, the authors advise you to draw a blue ocean strategy chart (discussed earlier) showing the current state of your product and the industry, and to fill out an action table to think through how you might formulate a plan to differentiate your product. They recommend appointing separate teams to investigate different opinions on the relevant characteristics of competition.
(Shortform note: This initial blue ocean strategy chart could be applicable to your marketing strategy as well as your product strategy. Al Ries and Jack Trout assert that understanding your current positioning, that is, how people...
Recall the five defensive barriers that protect your blue ocean from immediate competition: the legal barrier, the cognitive barrier, the organizational barrier, the image barrier, and the momentum barrier. Now think of the blue ocean offering you brainstormed in previous exercises, or think of another blue ocean offering that you are considering.
Kim and Mauborgne advise that you should keep your team informed of your blue ocean strategy as you develop it, because you need your team to mobilize your strategy. They emphasize that you need to communicate clearly, because everyone on the team needs to understand the strategy in order to do their part effectively.
Imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. Red oceans represent all the industries in existence today. This is the known market space. Blue oceans denote all the industries not in existence today. This is the unknown market space. 2b1af7f3a8