WHAT IS
BLUE OCEAN STRATEGY?
BLUE OCEAN STRATEGY
RED OCEANS AND BLUE OCEANS?
In their classic book, Blue Ocean Strategy, Chan Kim & Renée Mauborgne coined the terms ’red ocean’ and ‘blue ocean’ to describe the market universe.
RED OCEANS are all the industries in existence today – the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.
Here, companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, profits and growth are reduced. Products become commodities, leading to cutthroat or ‘bloody’ competition. Hence the term red oceans.
BLUE OCEANS, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.
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.
BLUE OCEANS, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.
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.
BLUE OCEAN STRATEGY VS RED OCEAN STRATEGY
- Compete in existing market space
- Beat the competition
- Exploit existing demand
- Make the value-cost trade-off
- Align the whole system of a firm's activities with its strategic choice of differentiation or low cost
- Create uncontested market space
- Make the competition irrelevant
- Create and capture new demand
- Break the value-cost trade-off
- Align the whole system of a firm's activities in pursuit of differentiation and low cost
Red Ocean
- Enter highly saturated and competitive markets.
- Strive for differentiation to outperform existing competitors.
- Focus on addressing the current and established customer demand.
- Operate within a trade-off between offering lower costs or delivering greater value to consumers.
Blue Ocean
- Explore untapped market opportunities beyond current competition.
- Launch offerings early to preempt potential competitors.
- Create new demand by targeting non-customers and unmet needs.
- Combine low cost with unique value to achieve differentiation and efficiency.
KEY POINTS OF BLUE OCEAN STRATEGY & SHIFT
It’s grounded in data
Blue ocean strategy is based on a decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years.
It provides a step-by-step process
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.....
It pursues differentiation and low cost
Blue ocean strategy is based on a decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years.
It maximizes opportunity while minimizing risk
Blue ocean strategy allows you to test the commercial viability of your ideas and shows you how to refine your ideas to maximize your upside....
It creates uncontested market space
Blue ocean strategy doesn’t aim to out-perform the competition. It aims to make the competition irrelevant by reconstructing industry boundaries.
It builds execution into strategy
The process and tools are inclusive, easy to understand and visual – which makes the process non-intimidating and an effective path to building execution into strategy.
It empowers you through tools and frameworks
Blue ocean strategy doesn’t aim to out-perform the competition. It aims to make the competition irrelevant by reconstructing industry boundaries.
It shows you how to create a win-win outcome
As an integrated approach, blue ocean strategy shows how to align the three strategy propositions – value, profit, and people – to create a win-win outcome......
BLUE OCEAN STRATEGY TOOLS AND FRAMEWORKS
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