A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean strategy theory and criticism 1246 words. Based on blue ocean theory, the demandside sources and supplyside sources are connected, which can. The four actions framework reconstructs buyer value elements by posing four key questions that challenge an industrys strategic logic and business model. Blue ocean strategy can be applied across sectors or businesses. 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. F or twentyfive years, competition has been at the heart of corporate strategy. Blue ocean strategy could be a way out of the crisis and a way to achieve economical and social benefit. Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. Blue ocean strategy including examples and pdf download this blog article is a overview of some of the key points of the book by w.
The structure can be created or recreated by the steps taken by players in the market. Presentation mode open print download current view. To prosper in the future, companies need to go beyond competing. To put blue ocean leadership in action, we adapt the analytic tools and frameworks of blue ocean strategy to the leadership context. Yet, blue ocean strategy resembles porters approach quite strikingly, and at their hart the message of both approaches is the same. Blue ocean strategy is where a company creates a completely new market space or market category. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Chan kim and renee mauborgne, professors at insead. The red ocean describes a situation where existing industry rules are readily formed, static and cannot be changed. Blue ocean strategy is a new way of thinking, a new strategic mindset, a bold new path to winning the future. Blue ocean strategy from theory to practice summary. Pdf blue ocean strategy as a tool for improving a companys.
Value innovation strategy competes in an uncontested market space. Chan kim and renee mauborgne in their book blue ocean. Another new manner to create market space is shown by the new theory named blue ocean strategy, which aims to transform the competition into something irrelevant by changing the limits of the industry kim, mauborgne, 2005. Blue ocean strategy formulation the four principles of. Blue ocean strategy is a marketing theory in which a business enters a market that has little or no competition.
This blog article is a overview of some of the key points of the book by w. Blue ocean strategy is a concept that has been pioneered by insead professors, w. How to create uncontested market space and make the competition irrelevant, a book by professors w. Strategy 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. From theory to practice case solution, red oceans and blue oceans. The blue ocean leadership theory attempts to completely revolutionize how a company works by starting from the inside. If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30. The strategy focuses on moving away from an existing market and seaching for new markets.
When a particular wine manufacturer applied the four actions framework to the strategy canvas, it created a wine. Although established industries red oceans are growing increasingly cluttered, few companies are currently attempting to create new markets. 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. Blue ocean strategy er et ledelsesbegreb fra erhvervslivet formuleret af professor w.
The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. 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. To understand red ocean strategy let us begin by defining blue ocean strategy. The fourstep process is designed around the concepts and analytic tools of blue ocean strategy and fair process. Blue ocean leadership is designed to be applied across the three distinct management levels. An introduction to blue ocean strategy mba knowledge base. Some strategic planning models are based on theories that dont quite pan out during gotomarket executions. Pdf epub mobi ebooks are now available on this website works on pc, ipad.
Blue ocean strategy formulation the four principles of strategy formation this blog article is a summary of the book by w. The theory of blue ocean leadership the insight for blue ocean leadership, created by chan kim and renee mauborgne, is that leadership, in essence, can be thought of as a service that people in an organization either buy or dont buy. 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. What is blue ocean strategy about blue ocean strategy. Click the link above to read the key concepts and everything you want to know about the blue ocean strategy. 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.
It calls for profiles for leaders that are tailored to the very different. How to create uncontested market space and the make competition irrelevant 2005. 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. There is ample opportunity for growth tbat is both. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. Blue oceans are all the industries not in existence today.
It is built based on our strategy practices in the field with. 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. The research focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean. Blue ocean strategy is used chakrabarti, 2014 to analyse the consistent pattern of strategic thinking behind the creation of new markets and. 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. The fundamental premise is that most companies fight competitors headtohead in the same space, chasing the same customers with very similar products, creating a bloodyred ocean in their feeding frenzy. The result is the leadership canvas, the leadership profile and the blue ocean leadership grid all of which are grounded in acts and activities, easy to understand and communicate and that engage more people in.
Blue ocean strategy is a theory explained in a 2005 book by w. Of course, the blueocean approach to this model would call. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Blue ocean leadership, by contrast, focuses on what acts and activities leaders need to undertake to boost their teams. Article blue ocean strategyfrom theory to practice 2005. In contrast, blue ocean strategy originated from a study that took place over 10 years and analyzed company successes and failures in more than 30 industries. Blue ocean strategy and its implications for businesses. By focusing on strategies of competition in established industries, companies and researchers have overlooked the value of creating new market spaces where there are no competitors. Red oceans are all the industries in existence today, they are increasi. While the possible occurrence of a blue ocean encourages the creativity. Blue ocean strategy is a book published in 2005 and written by w. The market universe is composed of two types of oceans.
Specifically, these new markets give a company a very high competitive advantage as well as low pricecost pressure. Reviewing the blue ocean strategy universiteit twente. Blue ocean strategy bos is a strategy concept which was introduced in the mid 2000s by. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. In this chapter, an indepth analysis of the theory behind the blue ocean strategy will be conducted to answer the question whether the blue ocean strategy valid and reliable on theoretical basis. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. Chan kim and renee mauborgne in their book blue ocean strategy. Today, one can hardly speak of strategy without involving the language of competition. The text offers a practical handbook to business students and entrepreneurs who wish to rise above the fray of the competition, become pioneers in previously uncharted market territory, and gain access to impressive growth opportunities and an. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Blue ocean strategy including examples and pdf download.
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