Blue ocean strategy vs red ocean strategy value innovation the cornerstone of blue ocean strategy analytical tools for blue ocean strategic canvas four actions framework six paths framework objectives. Jun 07, 2017 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. Blue ocean strategy is where a company creates a completely new market space or market category. It is aimed at enriching blue ocean strategy with a case study in which we see the process of creating a blue. Take a look at this comparison between the two strategies published by sage growth partners. The blue ocean strategy bos framework promoted by them challenges and displays. Red ocean vs blue ocean red ocean strategy compete in existing market space beat the competition exploit existing demand make the value cost trade of align either diferentiation or low cost blue ocean strategy create uncontested market space make the competition irrelevant create and capture new demand break the valuecost trade of. 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. Red ocean basis of competition is trying to get a bigger share in the same defined market. 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. To understand red ocean strategy let us begin by defining blue ocean strategy. Oct 02, 2020 this revolutionary red vs blue ocean strategy helps businesses create new markets rather than compete in existing ones.
Difference of red ocean strategy and blue ocean strategy. Most blue oceans are created from within red oceans by expanding existing industry boundaries. Red oceans are all the industries in existence today. Scribd is the worlds largest social reading and publishing site. This blog article is a overview of some of the key points of the book by w. In red oceans, industry boundaries are defined and accepted, and the. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Then download the free pdf and read wherever and whenever you want. Click the link above to read the key concepts and everything you want to know about the blue ocean strategy. The decision makers of the business are changing their strategy to sustain in the competitive business world.
Impact of blue ocean strategy on organizational performance. Ridderstrale and nordstrom also claimed in 1999 that in the slowgrowth 1990s overcapacity is the norm in most businesses. However, a red ocean strategy can still be beneficial because there is already a proven demand and need for this market. Sep 28, 2018 red ocean strategy face a lot of challenges from market competitors and companies usually fight within the market to emerge the winner. Red oceans represent all the industries in existence todaythe known market space. Remember the documentaries that showed the audience what happens when a large number of sharks feed at the same time, in the same place. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. We have come to think of them as red ocean traps, because they effectively anchor managers in.
Blue ocean strategy strategic management social media. See comparison between red and blue ocean strategies here in one simple table. The main idea behind the names of blue and red ocean strategies is color associations. 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. Sarah layton in blue ocean strategy on april 21, 2009. Are you and your classmates ready to build the future. These strategies are used in organizations by top level executive managers for long term organizational sustainability and to face or deviate from the competition. Sep 20, 2020 in short, red ocean strategy refers to competing for the existing marketplace where the blue ocean strategy denotes making a new uncontested marketplace. Of course any strategy will always involve risks be it red or blue. Blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies.
Pdf preventing blue ocean from turning into red ocean. The innovation management model being discussed for this paper is called the green ocean strategy which is a hybrid theory derived from the more popular theories, blue ocean strategy and red ocean strategy. Goal goal of this strategy plan is to make valuecosttradeoff goal of this strategy plan is to brake the valuecosttradeoff. In blue ocean strategy, red ocean is a metaphor for the known market space encompassing all the industries in existence today. Why churches need blueocean strategies biblical leadership. But many companies have done their homework and succeeded thanks to this strategy.
For saas, such an environment is advantageous and promising, with lots of new opportunities. Based on the analysis of the blue ocean strategy bos of the srikandi organizer, it can be concluded that the company needs to proceed a number of changes and innovations to be able to optimize. But a good a company would strategize and get out of red ocean to blue ocean. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. Competitive rules of the game are wellknown and predefined. A business model describes the rationale of how an organization creates, delivers, and captures value economic, social, cultural, or other forms of. In fact, blue ocean strategy cannot be avoided in modern business. Developing successful business models the building blocks the business model canvas and the big vision blue ocean strategy corporate strategy blue ocean. The book the origin of the terms red and blue oceans comes from blue ocean strategy how to create uncontested market space and make the competition irrelevant. Comparison between ocean strategies international journal of.
This is the same idea expressed in the form of an analogy. Blue ocean strategy studies demonstrate that every blue ocean will eventually turn red due to fast entries into the market and the literature leaves a gap in understanding how blue ocean could be. Red ocean the following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy. Because, only with a blue ocean strategy and the right entrepreneurial mindset, you can swim into a more profitable and distinct blue. Both the blue ocean and red ocean strategy has its own pros and cons. Red ocean vs blue ocean an introduction to blue ocean. The key goals of the blue ocean strategy are finding the right marketing opportunity and making the competition irrelevant. Red ocean vs blue ocean an introduction to blue ocean strategy. Blue ocean strategy for creating value of the organization ijrte. Its called a shark feeding frenzy event and it turns the ocean water red with. It is the responsibility of the manager to analyze and put the most appropriate strategy for their business. The blue color is calm and relaxing, it also symbolizes depth, stability, and even intelligence.
The origin of the terms red and blue oceans comes from blue ocean strategy how to create uncontested market space and make the competition irrelevant. Last week lesson, we talked about the difference of red ocean strategy and blue ocean strategy. However, blue ocean strategy provides a robust mechanism to mitigate risks and increase the odds of success. Blue ocean is a dynamic process that helps companies to create, and capture their own business. Kim and mauborgne claim that blue ocean strategy makes sense in a world where supply exceeds demand. Apr 27, 2012 if blue ocean strategy dominates in the shortterm while porters five forces dominates in the longterm such that profits are positively related to the number of firms in the shortterm but negatively related in the longterm, that would imply that innovation by new firms generates shortterm competitive advantage with associated higher. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Blue ocean vs red ocean strategy free download as powerpoint presentation. Our theory is not to be confused with similarlynamed strategies that deal with environmental impact of business.
Red ocean vs blue ocean strategy differentiation or low cost differentiation and low cost compete in existing market space create uncontested market space. Bos is the simultaneous pursuit of differentiation and low cost. Blue ocean strategy can be more lucrative and companies will not have to worry about competition when they create their own marketplace. What is blue ocean strategy about blue ocean strategy. Blue oceans strategys goal is to modify a productservice and establish a new market space by targeting new.
The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy. Moreover, the impacts of the shift from red oceans to blue oceans have been clarified. The blue ocean strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers. In this 5 minute blog, ill tell you what the difference is between a red vs blue ocean, and how certain entrepreneurial skills can help you survive a bloody red ocean.
They represent businesses that may not be around today, or werent around until they came on to the scene. In this article you will learn how to make your competition irrelevant and have sales and profit. Below are the main differences between a blue ocean and a red ocean strategy. Because, only with a blue ocean strategy and the right entrepreneurial mindset, you can swim into a more profitable and distinct blue uncontested market space. Red ocean versus blue ocean strategy create uncontested market space align the whole system of a. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as. Introduction the business world is now very competitive. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. The terms red and blue oceans to denote the market universe. Closing the gap between blue ocean strategy and execution.
Bisa dibilang, blue ocean strategy merupakan kebalikan dari red ocean strategy. Dec, 2012 red ocean blue ocean bloody competition why competeto take a larger share when you dontin the market have to. Red ocean strategy blue ocean strategy compete in existing marketing beat the competition exploit existing demand make the valuecost tradeoff align the whole system of a firms activities with its strategic choice of differentiation or low cost. Creating blue oceans cirque du soleil created uncontested new market space that made the competition. The key to a successful blue ocean strategy is finding the right market opportunity and making the competition irrelevant. 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 valuecost tradeoff break the valuecost tradeoff align the whole system of a firms activities with its strategic choice of differentiation or low cost. The blue ocean strategy seems to be a perfect solution for present companies to become sustainable successful. Innovation, new market space and creating demand are central characteristics. Memang tidak mudah mengimplementasikan blue ocean strategy ini, diperlukan kejeniusan, kreativitas dan kecerdasan dalam melihat pasar. Red ocean and blue ocean strategy essay academicscope. Blue ocean strategy including examples and pdf download. In blue ocean strategy weightage is given to develop future demand.
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. If you are new to blue ocean strategy, watch this brief video introducing you to the basic concepts. Memang tidak mudah mengimplementasikan blue ocean strategy ini, diperlukan kejeniusan. Difference between red ocean and blue ocean strategy. Based on the organizational analysis, it is observed that many. How does blue ocean strategy differ from red ocean strategy.
Blue ocean strategy, organizational performance, red ocean strategy, value innovation, creative competition i. Blue ocean strategy blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. I believe that the blue ocean strategy is intended more for mnes because it may require more resources to survive and be successful in those markets. Red ocean is all about competition, companies in red ocean have to squeeze profit margin in order to survive in their industries. Value innovation strategy competes in an uncontested market space. Of course, the blueocean approach to this model would call. It is worth noting the organizations will move between blue oceans and red oceans over time. 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 whereas red ocean is a current state.
Nov 29, 2019 the red ocean strategy maybe works for big companies, but this doesnt define i fis the best option, companies should use the blue ocean strategy because when a lot of companies do the same, the results are going to be the same, and what a company look for is to get bigger than what they were yesterday. To find a slippery blue ocean, kim and mauborgne suggest. Jul 17, 2018 implementing the blue ocean strategy is, simply put, a gargantuan task. Blue ocean strategy is an opportunitymaximising riskminimising strategy. When red ocean becomes too crowded, the need of creating a blue ocean strategy will increase. Blue ocean vs red ocean strategies 6 major differences. Red oceans are all the industries in existence todaythe known market space. Demand in red ocean strategy higher weightage is given to exploit existing demand. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean. 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. Blue ocean strategy powerpoint templates present better. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. The aim of bos is not to outperform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the.
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