Compare blue ocean and red ocean strategy pdf

Blue ocean vs red ocean strategies 6 major differences red bull case study. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as. Others have described the difference, but most of the red ocean businesses are on the edge of failure. The fighting results in a red sea, because much of the energy is spent competing. There is ample opportunity for growth that is both profitable and rapid. Blue ocean strategy including examples and pdf download. Blue ocean strategy is a concept that has been pioneered by insead professors, w. Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets.

The blue ocean, on the other hand, is calm, smooth, with lots of food and little or no competition. A blue ocean strategy may come out of a red ocean strategy. Zunaira munir compares blue ocean strategy versus red ocean strategy. Pdf impact of blue ocean strategy on organizational. Of course, the blue ocean approach to this model would call. We all know that ocean is vast and limitless and in the case of marketing, the word ocean has paramount significance when it comes to blue and red ocean strategy. How to create uncontested market space and make the competition irrelevant, professors w. In a red ocean there is blood in the water as firms are constantly fighting and competing for market share and. Red ocean strategies are based on finite and scarce markets. Only then can companies step up to the challenge of creating blue oceans in a smart and.

Ideal for strategy lectures or strategy analysis introduction, impress your audience with this appealing slide. Last week lesson, we talked about the difference of red ocean strategy and blue ocean strategy. Jul 11, 2016 red ocean marketing focuses on competition in the existing market space by directly competing with others. 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. Apr 27, 2012 lets focus on two of the businessworlds trending marketing strategies for electronic market space today blue ocean vs. Since, dividing up existing demand and benchmarking the competitors, blue ocean strategy is regarding grow demand and break away from the competition. While rays presentation discussed sales from a banking perspective, the lessons are highly relevant to anyone in a professional services sales or. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. 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 ocean strategy versus red ocean strategy youtube. The impact of blue ocean strategy in the earlier work see blue ocean strategy. Red ocean looks at cost saving or differentiation while blue ocean focuses on doing both. There is a defined market, defined competitors and a typical way to run a business in any specific industry.

Let me try to explain this in simple terms for the benefit of everyone. This is where everyone would like to be and it is possible for you to have a blue ocean. 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. Sep 26, 2011 senior global blue ocean strategy network member dr. Blue ocean vs red ocean strategies 6 major differences. A blue ocean analogy is utilized to unlock the wider, unfathomable, powerful and vast potential in the. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. Of course, the blueocean approach to this model would call.

The premise of the book is that companies can succeed by creating. These systems started to gain popularity in the 1970s with consoles that played only pong. Porters five forces is a very competitive marketing strategy. Red ocean marketing focuses on competition in the existing market space by directly competing with others. Jan 21, 2015 in their 2005 book entitled, blue ocean strategy. Made by group d of the minor global trendwatching 2015. 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. The result of the competition is destruction, which draws the analogy of red blood in. Compare and contrast the concept of blue ocean strategy. Blue ocean strategy the maturity of an industry has brought a company swimming in a red ocean, which means price war strategy, according to a bestseller book titled blue ocean strategy that is written by w. Suhas mekhe isbs the concept is quite simple to understand. May 26, 2015 summary of the first four chapters of the international bestseller blue ocean strategy.

Last week, we hosted the first installment in vertical iqs free fall webinar seriesa presentation entitled red ocean vs. It has become so unique, so highly valued by customers that those same customers never think to compare the company to any other. This blog article is a overview of some of the key points of the book by w. Beware this talk will make you rethink your entire life and work life changer duration. Red ocean strategists compete to win market share in traditional mature markets and. 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. But many companies have done their homework and succeeded thanks to this strategy. Value innovation strategy competes in an uncontested market space. Red ocean is all about competition, companies in red ocean have to squeeze profit margin in order to survive in their industries. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. The strategy clearly brings out the fact that the only way to beat competition is to stop trying to beat it. Red ocean blue is focused, disciplined, honest and there is absolutely no b. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean strategy makes companies to come out of ocean of bloody competition by creating market space which is uncontested and that makes the completion irrelevant.

Blue ocean strategy and its implications for businesses. Red ocean vs blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. The companys differentiation doesnt merely come from broadcasting a products features and benefits. As competition increases, prospects for profit and growth decline. With a focus of not just beating your competition but making them irrelevant, blue ocean strategy is all about thinking outside the box. What is the difference between red ocean strategy and. In contrast, blue ocean strategy is about how to get out of established market boundaries to leave the competition behind.

Based on the book blue ocean strategy, a red ocean is defined as a market where multiple competitors fight for the same customers. In red oceans, there is a competitiveadvantage worldview, companies are often driven to outperform rivals and capture greater shares of existing or shrinking market space. The term blue ocean is an analogy to describe the wider. Blue ocean vs red ocean strategies indira group of. History and background a video game console is just a computer that is made only.

Blue ocean sales strategies by ray adler, banking sales coach, strategist, and change catalyst with bti growth advisors. Its called blue ocean strategy, and it was the subject of a talk by michael levie, coo of citizenm hotels. What is distinctive about blue ocean strategy as a. How is a blue ocean strategist different from a red ocean. Red ocean in blue oceans, demand is created rather than fought over. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. Blue ocean strategy is where a company creates a completely new market space or market category. Blue vs red ocean endicott masters in international admin. Red ocean blues mission is to help you make it keep it.

How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. Innovation, new market space and creating demand are central characteristics. 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. Impact of blue ocean strategy on organizational performance. Therefore the market is usually heavily populated by competition and there are a set of rules that is known. The red oceans are the markets where sharks fight for their share, while the blue oceans, competition is irrelevant. Blue oceans denote all the industries not in existence today the unknown market space, unexplored and untainted by competition.

It views longterm competition as the main concern that business people should be. Red ocean markets are large and the rate of product innovation is low. These competitors may possess a competitive advantage driven by cost, differentiation, or niche market strategies. There are four defining characteristics that separate the mind of a blue ocean strategist from a red ocean one. Munir addresses the importance of focusing on noncustomers to. Set sail towards your blue ocean jk beteiligung gmbh. Achieved via the delivery of features that have a highest marginal benefit to customer needs. They determine the questions you ask and what you see and dont see, which makes your perspective important. For example, competing factors in blue ocean strategy are similar to the definition of finite and infinite dimensions in funky business.

Mmtbatch 36 marketing management blue ocean strategy vs. Just because blue ocean space is almost competitionfree, its not good to get too comfy because new competitors will emerge and beat you at your own game a typical case where your blue ocean space. Its differentiation derives from the fact its so unlike. Chan kim, and renee mauborgne of insead, a graduate business school with locations in europe and the middle east, put forth a simple, but effective argument as to why markets should be divided into two distinctly different categories. The authors conclude that the blueocean strategy or innovation approach is sustainable. Fortunately, i found out that they think its a battle of which of the two strategies is the most effective way in the industry. The competitive one that dominates existing markets or the innovative strategy that looks for opportunities to create new markets. Red ocean blue will educate you in how to make money trading futures and how to keep money trading futures. A marketcompeting strategy divides existing wealth between rival companies. Blue ocean strategy pdf blue ocean strategy blue ocean strategy 2004 five keys to blue ocean strategy book summary blue ocean strategy blue ocean strategy expanded edition blue ocean strategy book by w. The blue ocean strategy concerns itself with creating uncontested market space.

Let us say the market that we operate is an ocean cle. To give an example of a successful red ocean strategy, sam walton started a single store in a business where its largest competitor employed 0. The authors use the metaphor of the blue ocean as a direct contrast to red oceans. In blue oceans, demand is created rather than fought over. Make the valuecost tradeo align the whole system of a. Jul 17, 2018 implementing the blue ocean strategy is, simply put, a gargantuan task. These strategies are used in organizations by top level executive managers for long term organizational sustainability and to face or deviate from the competition. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Compare and contrast the concept of blue ocean strategy with michael porter s generic strategies model. Red ocean and blue ocean strategies comparison table. Download it once and read it on your kindle device, pc, phones or tablets. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy.

Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. Blue ocean strategy blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing cost. They represent businesses that may not be around today, or werent around until they came on to the scene. Lets focus on two of the businessworlds trending marketing strategies for electronic market space today blue ocean vs.

Each table is created as powerpoint tables, and are 100% editable. Red ocean and blue ocean approach to industry boundaries. We have come to think of them as red ocean traps, because they effectively anchor managers in red oceanscrowded market spaces where companies engage in bloody competition for market shareand. Most blue oceans are created from within red oceans by expanding existing industry boundaries. Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, funky business explained that competitive strategy is the route to nowhere. However, blue ocean strategy provides a robust mechanism to mitigate risks and increase the odds of success.

Red ocean and blue ocean strategies comparison table slidemodel. Apr 26, 2012 why do business people always compare porters five forces and blue ocean strategy. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy. Blue ocean vs red ocean business strategies youtube. Companies that are already in existence may make a solid decision to come out of the usual way of doing things and go into uncharted grounds. Bos is all about minimizing risks due to competition threat and maximizing opportunities by exploring new boundaries. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. What is the difference between red ocean and blue ocean strategy. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. It is a pacifist marketing scheme and is considered a strategic planning tool for assessing a business. In order to understand more about the two concepts lets look at the difference between blue ocean strategy and red ocean strategy. Jul 30, 2017 this strategy can work in the short run but it is a lot wiser for people to fast embrace the blue ocean strategy.

To understand red ocean strategy let us begin by defining blue ocean strategy. In this article you will learn how to make your competition irrelevant and have sales and profit. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet. In a similar fashion, a pathbreaking strategy, known as blue ocean strategy, was introduced by w. A red ocean is a saturated market with industry competitors. 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. Blue ocean strategy powerpoint templates present better. What levie did to illustrate the fact that so much of the hotel industry has fallen into a sea of sameness i. Blue ocean strategy is a book published in 2005 and written by w. Eight key points of blue ocean strategy heres the essence of blue ocean strategy captured in eight key points. Dec 11, 2016 blue ocean strategy blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing cost. In simple terms, red ocean strategy is about how to outpace rivals in existing market space.