The Blue Ocean Strategy is a strategic framework, mindset and method that you can use to create new markets where there is no competition.
In this article, I’ll take you what is a blue ocean strategy? the fundamentals of a blue ocean strategy and how to use the blue ocean strategy to identify exploit new market opportunities.
Table of Contents
The Quick Summary
Most companies compete in tightly defined markets and continually fight for a limited amount of value available. Over time, margins and opportunities erode as costs associated with improving market share or profits outweigh returns – these are red oceans.
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.
Why use it? A good way to understand how to reassess strategic options. It encourages leaders to change their mindset and adopt a design approach to strategy. It’s the difference between business process reengineering (BPR) and business design. BPR focuses on improving current position in an existing market by transforming internal processes but maintains strategic trajectory. Business design and blue ocean provides a framework for leaders to rethink the trajectory of the business.
Who should use it? Leadership teams that have identified:
- their portfolio of products services is being eroded.
- new and innovative new startups or competitive products/services.
- new and emerging technologies that offer possibilities to dramatically disrupt their market.
What are some examples: Cirque De Soleil, Nintendo Wii, National Youth Orchestra of Iraq, Nescafe Nespresso
What is a Blue Ocean Strategy?
Blue Ocean Strategy is a concept developed by INSEAD professors W. Chan Kim and Renée Mauborgne. A Blue Ocean Strategy focuses on creating and exploiting new market spaces – ‘blue oceans’, rather than going head to head in fiercely competitive markets, red oceans.
Markets or “blue oceans” are created by value innovation and at the same time driving down costs. These combined strategies effectively beat the competition or in their own words “make the competition irrelevant“. In other words, the key to success is to find a market that you can create and then make your own.
Blue Ocean Strategy Definition and Fundamentals
The term ‘Blue Ocean’ comes from the now famous book by professors W. Chan Kim and Renee Mauborgne in their book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.
The appeal of this message propelled the book into the bestseller list and it has subsequently sold over 4 million copies and be translated into over 40 languages.
In their research on new ventures, W. Chan Kim and Renee Mauborgne studied 150 strategic moves across 30 industries across 100 years. They analyzed new business launches in 108 companies and found that 86% of these new ventures were merely line extensions and only 14% actually created new markets or industries.
What was more astonishing though was that although the line extensions accounted for 62% of total revenues, they only delivered only 39% of total profits. In comparison, the new markets or industries accounted for 61% of the profits.
The main concept is that profits and growth come from creating new products and services in uncontested markets – the “blue oceans”. Whereas, the conventional business strategy focuses on competing inside an existing “red oceans” and trying to beat the competition.
The Blue Ocean Strategy is a useful framework for leadership teams and can facilitate ideas and development of new initiatives.
If a company is under siege with its market being infested with more and more competitors, then the blue ocean strategy can provide the impetus to change direction.
What Are Red Oceans?
Red Oceans represent all the industries and markets in existence today. As an example, all the existing companies that are in a known market space such as chocolate manufacturers. According to the authors they all share the same characteristics and fate.
The characteristics of Red Oceans are that they are crowded, lack the potential growth, margins are constantly eroded resultingin commoditization. The term Red Ocean comes from the idea that the ferocity of the competition leads to bloody battles over profits…in other words like sharks fighting over a carcass.
Red Oceans are defined by:
- competing for customers in existing markets.
- need to strategically fight against tough competition.
- exploiting existing demand by using line extensions, bundling products…
- make the value-cost trade-off – promote products to try and improve market share, offer discounts and cost reductions or try and improve value offer without incurring additional costs.
What Are Blue Oceans?
Blue oceans denote all the industries not in existence today. This is the unknown market that is based on stop trying to beat others and is focused on developing new values.
Blue Oceans are defined by:
- maximizing the value of offerings within the boundaries of the industry.
- adapting to external trends (Porters Five Forces).
- improving price-performance within the functional/emotional appeal of its industry.
- better serving the buyer group.
- competitors within an industry.
- having a competitive position within strategic group
Blue Ocean vs Red Ocean Strategy
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. Valueinnovationtakes precedence over competing blindly with a simultaneous focus ondifferentiationand cost effectiveness.
Porter vs Blue Ocean Strategy
Porter’s model focuses on developing a strategic framework that starts with analysing the external environment – Porters Five Forces model.
Porter’s five forces analysis provides the insight into the intensity of competition, potential profitability and attractiveness of an industry. The analysis focuses within the industry and market and so is limited to the existing value propositions and profit opportunities.
The Blue Ocean Strategyis an approach to innovate value and create new market space, tap into unsatisfied consumer demand, and find uncontested market space. As a result, competition becomes irrelevant because the rules of the game are yet to be set.
The New Blue Ocean Strategy Book – Updates
In the new and updated version of the Blue Ocean Strategy book, the authors have added several more examples and given some valuable insights into how companies have successfully implemented this strategy framework.
Companies that successfully implement Blue Ocean strategies have the following in common:
Research has repeatedly shown that companies have a culture and way of viewing the world that reinforces how they then organize and do business. It is often referred to as the dominant logic in a company – a way of viewing the company, market and customer. the problem is that this can become outdated or dangerously narrow.
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.
Overcoming Mental Barriers
“Recognizing that structure and market boundaries exist only in managers’ minds, practitioners who hold this view do not let existing market structures limit their thinking. ”Source: Blue Ocean Strategy
Organizations to regular look for new ways to renew their value. New technologies present endless ways to create and transform value propositions. However, unless a culture of exploration is developed then the end result will always be ideas and implementations that fall short of value innovation. Practice business design and lead from the front. Encourage teams to confront ambiguous and often difficult challenges when seeking out new ways to innovate.
“If you don’t cannibalize yourself, someone else will.”Steve Jobs
A common mistake among leaders is the fear of cannibalizing existing market offers. When I talk with leaders I explain that it is better to control your own disruption than be at the mercy of startups and disruptive forces that you have no control over. Change will happen regardless of whether you think it should.
What Is Value Innovation?
“Value innovation places equal emphasis on value and innovation. Value without innovation tends to focus on value creation on an incremental scale, something that improves value but is not sufficient to make you stand out in the marketplace.”Source: Blue Ocean Strategy
Value innovation is as important as technology innovation. When companies obsess about technologies and the ‘value’ it can deliver they often forget the core principles of understanding what problem they are addressing for the customer – how the solution addresses their needs and relative to others.
The blue ocean strategy fundamentally challenges leaders to assess the value rather than the technology. To map current value propositions and then to create innovative new value.
Value innovation is the cornerstone of Blue Ocean Strategy. It rejects the principles of trading low cost vs value proposed by Michael Porter.
The authors advocate that a company can offer its customers value at a low cost, overcoming the value-cost trade-off by pursuing low costs and differentiation. This is called ‘value innovation’ which in turn leads to high growth and profits.
Blue Ocean Strategy Examples
What is an example of a Blue Ocean Strategy?
There are lots of good examples such as Cirque Du Soleil, Often you can see breakthrough innovation happening across different industries and the emergence of value innovation.
Cirque du Soleil and the Blue Ocean Strategy
Cirque du Soleil or Circus of the Sun is the largest theatrical company in the world. The original founders of this spectacular entertainment company were two former street performersGuy LalibertéandGilles Ste-Croix. The company’s theatrical and character-driven focus has helped it reach a global audience and receive numerous awards. The circus has held shows in over 271 countries and has an estimated annual revenue of over $900M.
“Cirque du Soleil offers the best of both circus and theater, and it has eliminated or reduced everything else. ”Source: Blue Ocean Strategy
Cirque du Soleil Value Innovation
Cirque Du Soleil eliminated those elements of the circus that created low value with the customer but were high cost. These included the costly three-ring method, the use of trained animals.
Instead, they created a sophisticated theatrical production with a unique storyline and characters. As a result, the company managed to offer new value elements of the theatre combined with the drama of the circus. They effectively created a new genre of entertainment and then proceeded to develop a unique business model to expand and scale their operations internationally.
Nintendo Wii and the Blue Ocean Strategy
The Wii was a sensation when it was by Nintendo in November 2006. Compared to other game consoles (Sony Playstation and Xbox) it was unique because of the focus on motion. Unlike other consoles, the Wii used a small handheld device to detects movement in 3D which allowed users to interact in new ways within games.
The strategy canvas demonstrates that Nintendo designed the Wii to compete on different value components than Sony Playstation and Microsoft Xbox. The Wii cost less, had no Hard Disk, no DVD, no surround sound capabilities (Dolby 5.1), weak connectivity and comparatively low specification processor.
However, the motion control stick which mimicked the movements of a player transported the player into the video game and appealed to games that previously were very difficult on a console e.g. tennis, golf, sword fights…
How To Use The Blue Ocean Strategy – A Quick Guide
The book presents a five-step process to systematically develop a Blue Ocean initiative. The five steps are:
- Choose the right place to start and create a core team.
- Analyse and gain clarity about the current business environment and competition.
- Analyse the hidden problems that limit the current size of the industry and discover an ocean of non-customers.
- Systematically reconstructing market boundaries and developing alternative Blue Ocean opportunities.
- Selecting the right Blue Ocean move, conducting rapid market tests, finalizing, and launching the shift.
How To Use The Blue Ocean Strategy
The Six Principles
The Six Principles of Blue Ocean Strategy are:
- Formulation Principles
- Reconstruct the market boundaries – re-define the market space
- Focus on the big picture, not the numbers
- Reach beyond existing demand
- Get the strategic sequence right
- Execution Principles
- Overcome key organizational hurdles
- Build execution into strategy
The Boundaries of Competition
- Look across markets: map a wider perspective of how and what buyers are using instead or as an alternative to your product or service.
- Explore groups within markets: examine levels of buying behaviour e.g. for travel there are the following types of groups: luxury, business, economy, family, singles…identify the propositions and why people buy and if they trade up or down.
- Examine the value chain: often in the supply chain, there are people that influence buying behaviour as well as participate with others to create the final solution. Examine how the value is constructed and who influences buying decisions in the market.
- Assess complementary product and service offerings: Instead of just focusing on the immediate purchase and use of the product think about other needs post-purchase or end of life.
- Analyse functional or emotional appeal: A functional product can be enhanced with emotional value and vice versa. As an example, Swatch added emotional connections to their brand and as a result it became a trendy accessory.
- Look across time: Analyze past trends and forthcoming ones that changed a market. How can you see a new trend or technology changing a value dimension?
Step 1. Strategy Canvas
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.
A strategy canvas is a line graph that plots functions/factors against importance for a company and then adds competitors or industry benchmarks. As a result, the visualization can be used to analyse and formulate a competitive strategy.
The Strategy Canvas is basically anaction frameworkwhich is represented by a line graph to pinpoint
X-axis– ‘factors of competition’
Y-axis– ‘degree of value to customer’
- Plot on the horizontal axis the current value dimensions (features/services and value propositions) that your company is currently competing in the industry/market. For each factor grade its value from ‘High’ to ‘Low’.
- Plot competitors.
This stage is about identifying and realizing how you and your competitors currently compete.
- What is your position?
- What is your competitor’s position?
- How do you differ and where do you converge?
- How significant are the differences?
Step 2. Four Actions Framework
This next step is to experiment and reinvent the opportunities and market space by identifying value innovation opportunities.
Create, Reduce, Eliminate and Raise
To understand more about pains and gains see the article on designing a value proposition.
In a similar way you to understanding customers pain points, you need to go out and explore customer paths.
Based on the Strategy Canvas you can experiment with each feature and do one of the following:
- Raise: Which factors should be raised well above the industry standard?
- Eliminate: Which factors that the industry takes for granted should be eliminated?
- Reduce: Which factors should be reduced well below the industry standard?
- Created: Which factors should be created that the industry has never offered?
Step 3. Reach Beyond Existing Customers
Three Tiers of Non-Customers is a mental framework for exploring how to reach non-customers and pull them into a new market.
- Your Market
- First Tier – “Soon to be” non-customers who are on the edge of your market – buy minimally and decide to not participate fully in the market.
- Second Tier – “Refusing” non-customers who see and understand offer but decide not to buy and use alternatives.
- Third Tier – “Unexplored” non-customers who are in markets distant from yours and have never considered the market’s offer as an option.
Step 4. Classify The Different Products/Services/Business Units in Your Company
The process is designed to change the mindset, understanding and move beyond the current limitations of the existing industry (“settlers”) and identify greater value improvement (“migrators”) and then progressively move to value innovation by identifying noncustomers (the “pioneers” of marketing-creating innovation.)
blue ocean strategy summary
Limitations of Blue Ocean Strategy
There is generally less in terms of large-scale quantitative evidence to back up their claims. It should be noted that Kim and Mauborgne (2005b, p. 8) admit the limitations of their data: “Although we don’t have data on the hit rate of success of red and blue ocean initiatives, the global performance differences between them are marked.”
Ultimately Blue Ocean strategy is about a developing and cultivating a different mindset.
- Disruptive innovation (Clayton Christensen)
- Business model innovation (Chesbrough 2010, Johnson 2010)
Free Blue Ocean Strategy Templates
There are two blue ocean strategy pdf templates included in the free download, an excel sheet you can use to create a strategy canvas and a Microsoft PowerPoint.
DOWNLOAD BLUE OCEAN STRATEGY PDF
Click to download free blue ocean strategy templates – pdf, MS Excel and PowerPoint
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It is the idea of trying to find market spaces that are free of competitors by creating and caputuring new demand, making the competition irrelevant. An exmaple of a blue ocean strategy is Netflix. Netflix created uncontested marketing space by selling TV shows over the internet which no one else was currently doing.What are the four 4 actions framework in the blue ocean strategy BOS? ›
Companies need to build their blue ocean strategy in the sequence of buyer utility, price, cost, and adoption.Where can I find blue ocean strategy? ›
- Select the right scope for your blue ocean initiative and build your people's confidence. ...
- Next, get super clear about the current state of play. ...
- Identify the hidden constraints that you can turn into opportunities. ...
- Go from the big picture to creating practical blue ocean options.
- Industry. Head-to-Head Competition. Focuses on rivals within its industy. ...
- Strategic Group. Head-to-Head Competition. ...
- Buyer Group. Head-to-Head Competition. ...
- Scope of Product or Service Offering. Head-to-Head Competition. ...
- Functional-emotional Orientation. Head-to-Head Competition. ...
- Time. Head-to-Head Competition.
Netflix is another famous example of a blue ocean strategy done well. When the firm shifted from a DVD rental company to a streaming service, it started a seismic shift in the way we consumed movies and television and became hugely successful as a result.What are the three pillars of a successful blue ocean strategy? ›
For a company to successfully shift from red to blue oceans, Chan Kim and Renée Mauborgne have identified three key components that are needed: adopting a blue ocean perspective; having tools and methodology for market creation; and having a humanistic process.What are examples of blue ocean strategies? ›
- Nintendo Wii. The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of the Nintendo Wii. ...
- Yellow Tail. The development of Yellow Tail, a new wine brand from Casella Wines, is another great example of blue ocean strategy in action. ...
- Cirque de Soleil.
- Vision. This is an organization's picture of the ideal outcome they would like to pursue for the future. ...
- Mission. ...
- Values. ...
- Objectives. ...
- Strategy. ...
Blue Ocean Strategy Example of Tesla
The introduction of the Model 3 gave Tesla yet another superior electric vehicle at a price point under $40k that appeals to the masses. As you see from the strategy canvas I put together below, Tesla makes incredibly bold strategic trade-offs in order to win.
The red ocean strategy aims to make your product survive in a market full of competitors. To beat the competition, companies try to differentiate their product from others. It could be through a unique product feature, a niche target audience, excellent customer service or competitive pricing.
- 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.
Amazon is another good example of a blue ocean strategy. Its founder, Jeff Bezos, set out to create the world's largest online bookstore — and succeeded. Part of the success was the convenient and well thought-out online customer experience.Is Zoom a blue ocean strategy? ›
Zoom's story is a vivid example of the red ocean strategy.Is Ikea an example of blue ocean strategy? ›
IKEA's success is attributed to the Blue Ocean; For the strategy, create new solutions and define new markets; Use low cost and differentiation simultaneously.Is Apple a blue or red ocean strategy? ›
However, it is not always easy to do things the first time. One of the most notable examples of a blue ocean company is Apple. Apple has been able to remain at the forefront of innovation through products like the iPod.What is the 5 component strategy? ›
These five elements of strategy include Arenas, Differentiators, Vehicles, Staging, and Economic Logic. This model was developed by strategy researchers, Donald Hambrick and James Fredrickson.What should be considered first in blue ocean strategy? ›
One of the first steps of the blue ocean shift process is to identify the demand that exists beyond your industry. These are your noncustomers: buyers that don't buy into your industry, product or service yet. The notion of noncustomers – anyone who is not a customer – is broad.What are the three elements of strategy creation? ›
In media coverage, there are few practical examples of companies with all information of the three elements of strategy (goals, major development problems, and general ideology) and tactical information.What are the 7 elements of strategy? ›
Here are the 7 basic elements of a strategic plan: vision, mission, SWOT analysis, core values, goals, objectives, and action plans.What are the 5 6 most important elements of your company's strategy? ›
Skipping these important steps can leave your organization without direction. Read ahead to learn more about the six vital elements of strategic planning: vision, mission, objectives, strategy, approach, and tactics.
Often overlooked are the five key components necessary to support implementation: people, resources, structure, systems, and culture. All components must be in place in order to move from creating the plan to activating the plan.Is Apple an example of blue ocean strategy? ›
In blue ocean terms, it is value innovation, not technology innovation that makes Apple what it is. Apple reshaped market boundaries by providing extraordinary breakthroughs in buyer value, something that can be done systematically when applying blue ocean strategy's Six Paths Framework.How many principles are there in blue ocean strategy? ›
Principles of Blue Ocean Strategy are the six main principles that guide companies through the formulation and execution of their Blue Ocean Strategy in a systematic risk minimizing and opportunity maximizing manner.Is Uber an example of blue ocean strategy? ›
Uber is a company that applies the strategy of the blue ocean and it is used for our study. We explore how a business such as Uber searches for a new market space, avoids head-to-head competition, and focuses on creativity based on the blue ocean strategy.What are the 10 strategic planning steps? ›
- Determine who needs to be in the room. ...
- Identify a facilitator. ...
- Define terms. ...
- Assess the environment. ...
- Answer six key strategic questions. ...
- Know how you will differentiate. ...
- Establish your vision, mission and values. ...
- Create Commitments, Initiatives and Tactics.
Ford and Apple are two examples of leading companies that created their blue oceans by pursuing high product differentiation at a relatively low cost, which also raised the barriers for competition. They also were paradigmatic of burgeoning industries at the time that were later exemplified and emulated by others.Is blue ocean strategy risky? ›
While most agree that a Blue Ocean strategy has the highest long-term returns, many fear it is too risky to pursue from a personal career perspective. The reality is that it is actually the less risky approach, as the underlying odds favor success via a Blue Ocean approach.Is blue ocean strategy still viable? ›
Speaking of all type of set ups, Blue Ocean Strategy is still successful because it is scalable. Any type of organization either it profitable or non profit can use the tools, methodology and framework.What is Purple ocean strategy? ›
The “purple ocean” corresponds to the adaptive and sustainable strategy, through innovation. This is the middle way (between the oceans) of an organization which, although it is in the red ocean with its core activity, develops a new product that generates resources to ensure the organization's survival (Figure 1).What is are the main weaknesses of the blue ocean strategy? ›
Disadvantages of Blue Ocean Strategy
There is a possibility that the customer might not understand what the business is trying to sell and how beneficial the product might be. The technology and the customer preferences might not be developed up to the extent where the business can create a profit.
Black ocean strategy is a kind of survival strategy to foresee the organizational problems and solve them successfully to continue in its business market by means of a kind of black magic may be legally or illegally, ethically or unethically.Is Jenkins blue ocean free? ›
Blue Ocean is 100% free and open source software.Why is blue ocean strategy difficult? ›
First, it can be difficult to identify uncontested market spaces. Second, even if an uncontested market space is found, it may be short-lived if other companies enter the market. Finally, pursuing a blue ocean strategy requires significant resources and investment, which may not be feasible for all businesses.Is zomato a blue ocean strategy? ›
My one of learnings from the Harvard course - Zomato success is one of the great examples of how to formulate a blue ocean strategy.Is Airbnb an example of blue ocean strategy? ›
Both Uber and Airbnb are great examples of the blue ocean strategy. Airbnb launched in 2008, Uber – one year later. Although operating in the hospitality industry, Airbnb doesn't own any property, it manages an online travel platform.Is Blue strategy always a success? ›
Making the shift to a blue ocean strategy
The aim is to capture new demand with a superior product that makes competition irrelevant. Unfortunately, this isn't always successful.
The most common example of Value Innovation strategy comes from Nintendo, the popular computer game, which through the Blue Ocean strategy went on to become Nintendo Wii. The modified Nintendo model called Nintendo Wii was launched in 2006 and is considered the pride of the Value Innovation concept.How do you draw a strategy canvas? ›
- Identify your competition. Make a list of all of your direct competitors. ...
- Identify your factors of competition. Conduct a brainstorming meeting with all key stakeholders to identify the factors your customer values. ...
- Evaluate your competition. ...
- Create a strategic profile.
- Identify the main competitive factors in your industry. ...
- Write these along the horizontal axis of your graph.
- Determine how you and your competitors score for these factors. ...
- Now review your market position against that of your competitors.
A blue ocean is specific to a time and place. Ford and Apple are two examples of leading companies that created their blue oceans by pursuing high product differentiation at a relatively low cost, which also raised the barriers for competition.
Cirque du Soleil – a classic example of blue ocean strategy
Arguably most well-known example of blue ocean strategy is Cirque du Soleil, a Canadian entertainment company that created uncontested market space and made the competition irrelevant.
The blue ocean strategy represents the simultaneous pursuit of high product differentiation and low cost, making the competition irrelevant. The name “blue ocean strategy” comes from the book Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant.What is blue ocean strategy explain with suitable Indian example? ›
The Blue Ocean Strategy proposes that instead of fighting for a share in the highly competitive but shrinking market, feast on the unexplored new segments, thereby making the competition irrelevant. Since market boundaries are not defined, it can be reconstructed by new ideas of the industry players.Is Amazon using blue ocean strategy? ›
Amazon is another good example of a blue ocean strategy. Its founder, Jeff Bezos, set out to create the world's largest online bookstore — and succeeded. Part of the success was the convenient and well thought-out online customer experience.How is Starbucks a blue ocean strategy? ›
At Starbucks, the Blue Sea model and framework allow one to explore various market spaces that were previously uncompetitive or actively used by players in the current business environment. In this way, Starbucks was able to develop new demand instead of competing in the existing competitive environment.What are the factors of blue ocean strategy? ›
It crisply communicates the four key elements of strategy: the factors of competition, the offering level buyers receive across these factors, and your own and your competitors' strategic profiles and cost structures.What is the opposite of blue ocean strategy? ›
What is red ocean strategy? Red ocean strategy is all about competition. As the market space gets more crowded, companies compete fiercely for a greater share of limited demand.Why is Blue Ocean Strategy difficult? ›
First, it can be difficult to identify uncontested market spaces. Second, even if an uncontested market space is found, it may be short-lived if other companies enter the market. Finally, pursuing a blue ocean strategy requires significant resources and investment, which may not be feasible for all businesses.What is one of the basic aims of a blue ocean strategy? ›
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). A company will have more success, fewer risks, and increased profits in a blue ocean market.What is value innovation in blue ocean strategy? ›
Value Innovation is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company. The concept of Value Innovation is developed by Chan Kim and Renée Mauborgne and is the cornerstone of market-creating strategy.