Harleys needs to cruise to blue oceans via different buyer groups. The blue ocean strategy four actions framework also called eliminate reduce raise create grid errc grid is a complementary tool to the strategy canvas. However, there is a large difference between these two approaches. The opposite of such a competitive environment is a blue ocean strategy.
This article uses examples from the real world to discuss the specifics of the blue ocean strategy. By targeting young and healthy customers, acmi stands to benefit in two ways. The main question is to know if the ocean blue strategy can really work or else another magic trick. And fish for a blue ocean cluster of neighbors to serve and a red ocean strategy 1. Lge was a technology innovator in electronics, information and communications businesses producing cdma handsets, dvd players, optical storage devices, canister vacuum cleaners, air conditioners and micro ovens. Black ocean strategy is not an alternative to r ed ocean, blue ocean and green ocean strategies but it is complementary to them as it supports the organization at times of disaster.
The key theme in this article is that when businesses are faced with a choice of battling competition in saturated markets or creating an entirely new market. Blue ocean strategy is innovative, and it creates a new market instead of fitting into the current market. Drawing on more than a decade of new work, kim and mauborgne show you how to move beyond competing, inspire. Blue ocean strategy, strategic thinking, red ocean, innovation, concept. Various types of strategies are used in strategic management such as red ocean strategy, blue ocean strategy, green ocean strategy and purple ocean strategy. What is blue ocean strategy about blue ocean strategy. It is being published in a recordbreaking 44 languages and is a bestseller across five. In 1948, honda stared producing complete motorcycles. The idea in brief the best way to drive profitable growth. Blue ocean shift, however, provides a clear process for business identifying opportunities and developing plans for. The blue ocean strategy book has been sold over 3,5 million times, was published in 43 languages and is a bestseller across five continents. While blue ocean strategy helped to identify new avenues for strategic success, it fell short on providing the actual steps needed to jump from a crowded marketplace into the fabled blue ocean of the title. Ford automotive industry case study blue ocean strategy. Click the link above to read the key concepts and everything you want to know about the blue ocean strategy in less than 5 minutes in this easy to read summary.
Riding on blue ocean strategy business standard news. In 1949, takeo fujisawa joined the honda one of the most person lead to hondas success in 1968, launching the honda 0 hondas first small car. It is a great way to mobilize thinking around new differentiators value creation. Blue ocean strategy continues to grow in popularity across the world and is widely used in practice and in mba and executive education classrooms. Blue ocean strategy and sustainability for strategic. The blue ocean strategy is based on the assumption of the existence of unused market spaces created within red oceans through the differentiation from others. In short, blue ocean strategy stimulates an ongoingprocess including creating, protecting, and reaching other blue ocean. Blue ocean strategy is innovative, and it creates a. To try to answer that question, we choose to proceed in three steps. How to support smes recovery giorgio gandellinia, daniela venanzib abuniversity of rome iii, via silvio damico, 77, rome 00145, italy abstract this mainly conceptual paper suggests a new approach, aimed at supporting smes strategic realignment in the recovery phase after the economic crisis of 20082009. From the per spective of competitionbased strategy, then, the circus industry appeared. Black ocean strategy a probe into a new type of strategy. Apr 27, 2012 blue ocean is a strategy of innovation in new market space where competition does not exist. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world.
Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. The database and research have continued to expand. Blue ocean strategy blue ocean strategy is a strategic move that organizations or individuals use to create new product or ideas. In a red ocean environment the market becomes more fierce and crowded as. Blue ocean strategy is a book published in 2005 and written by w. This article explains the blue ocean strategy, developed by w. Chan kim and renee mauborgne, professors at insead. Pdf assemblages are the actors, artefacts or practices that are intertwined.
Chan kim and renee mauborgne 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. 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. Blue ocean strategy including examples and pdf download. Article from hbrs 10 must reads on strategy including featured article what is strategy. Jun 20, 20 the blue ocean strategy 2x2 errc matrix allows you to picture your business in the industry. Reviewing the blue ocean strategy universiteit twente.
Blue ocean strategy is a concept that has been pioneered by insead professors, w. Blue ocean strategy is a strategy that advice companies to go to a new market, which interest customers and avoid competition from the existing market. According to kim and mauborgne 1999a, 2004, 2005a, 2005b, innovation can be used. Ip internet protocol the computer networking protocol used on the internet isp internet service provider. Pdf the aim of this research was to test a new generation of strategic management theories to discover the most appropriate qualitative factors for an.
The strategic edge of a blue ocean thinker insead knowledge. Honda flagged off motorcycles in october 2004, as after terminating. Textbook blue ocean strategy suggests that harley davidson needs to move into a new blue ocean, whereby they are the only player and their profit potential is unlimited thereby making their competition irrelevant. Dec 15, 2015 the tenyear expanded edition of blue ocean strategy came out this year. Japanese players such as honda, and compuserve, which pioneered electronic.
Value innovation strategy competes in an uncontested market space. 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. This case lg electronics, the blue ocean strategy focus on lg electronics, inc. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Listen to these blue ocean donors very carefully with engaging, accepting respect 4. Learn how to engage your colleagues in a blue ocean strategy process. Activa 3g dominated the twowheeler sales chart for seven consecutive months januaryjuly 2016. Ford has recently posted profits and are projecting a good 2011. Blue ocean strategy and its implications for businesses. Blue ocean idea index the blue ocean idea index is a simple but robust test demonstrating how the sequence of utility, price, cost, and adoption form an integral whole to ensure commercial success through blue ocean strategy. By identifying untapped or at least less tapped product markets where unique buyer segments and needs can be identified and satisfied, blue ocean. Is it possible to make competition irrelevant in a. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to.
After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. Blue ocean strategy tesla motors allowing competitors. Delivered by worldclass faculty, this programme will teach you how to apply the theory created by insead professors w. By the end of 2004, curves is expected to reach eight thousand five hundred. Blue ocean strategy versus dynamic capabilities researchgate. The main factor affecting the formation of the blue ocean is jump value creating the innovation value increase for. Aug 28, 2012 blue ocean strategy is often compared to venture strategy. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades. Blue ocean strategy is a growth strategy framework focused on the idea of creating an uncontested market spacei. 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 based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Furthermore the blue ocean strategy was awarded with.
The four actions framework and errc grid tweet after you define the three tiers of non customers, the idea is that you poll these noncustomers and find out what it would take to purchase your product or service. Red ocean strategy pdf download download the blue ocean strategy summary pdf. Blue ocean strategy is the international best practice in innovation strategy. This framework is very innovative, as its principles challenge the conventional business strategy principles of fighting competitors headon. Start developing blue ocean strategy for your organisation in order to break away from the competition through. According to research by ibm executive, blue oceans helps companies gain significant profit in the future. Blue ocean strategy is a strategy that advice companies to go to a new market, which interest. The blue ocean strategy 2x2 errc matrix allows you to. Instead, kim and mauborgne 2005a, b, and c and kim et al. So far, blue ocean support relies on a data base of case studies that does not statistically analyze overall patterns. Red oceans represents all the industries in existence read little women online pdf today. Blue oceans focus on the critical value factors and eliminate unnecessary factors. They may be the only us automaker that hasnt filed for bankrupcy protection.
Four reasons why blue ocean thinking is crucial insead. This confirms the authors assumption that it is a dynamic strategy. This is competition in pricing, and its a race to the bottom. The book titled blue ocean strategy is not helpful to management dont buy it and if you. Blue ocean strategy and sustainability for strategic management. Blue ocean strategy is a marketing theory and the title of a book published in 2004 written by w. Pdf blue ocean strategy how to create uncontested market. Blue ocean strategy hbr bestseller harvard business publishing. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. The impact of blue ocean strategy in lowcost transport.
Blue ocean strategy is a landmark idea founded by w. The tenyear expanded edition of blue ocean strategy came out this year. Inside business 360,united states if you are still wondering whether to pick up a copy of blue ocean strategy, we hope this article will convince you. Gain a new framework for strategy design and implementation. Blue ocean strategy will help you create innovation across your whole organisation. Chan kim and renee mauborgne to understand the strategic edge it brings, its impact on business education at insead and around the.
By identifying untapped or at least less tapped product markets where unique buyer segments and needs can be identified and satisfied, blue ocean strategy results to. Chan kim is a professor of strategy and management at insead and. This article explains what the blue ocean strategy is and how it can become a game changer for businesses stuck in stagnating markets. Blue oceans, in contrast, are defined by untapped market space, demand. Venture strategies have been used by large multinationals for decades. Aug, 2010 ford has recently posted profits and are projecting a good 2011. Try to maximize all factors and try to be the best at everything. Jun 28, 2009 textbook blue ocean strategy suggests that harley davidson needs to move into a new blue ocean, whereby they are the only player and their profit potential is unlimited thereby making their competition irrelevant. Blue ocean strategy in saudi arabia telecommunication. In this article you will learn how to make your competition irrelevant and have sales and profit.
Blue ocean is a strategy of innovation in new market space where competition does not exist. Blue ocean strategy tesla motors allowing competitors access its patented technology 1. Oct 31, 2008 in 1937, honda began producing piston ringsused in motorcycles. The concept of blue ocean is based on the idea that the business universe is made up.
It unshackles companies from the costly battles of headtohead competition red oceans to find new channels to untapped demand and profitable growth blue oceans. However, the price competition only results in a red. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Cirque du soleil created uncontested new market space that made the competition irrelevant. It provides guidelines to identify new competing factors and therefore be more creative during later phases of innovation and design a new buyer value curve. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for. This blog article is a overview of some of the key points of the book by w. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. The strategy can transform a current product or idea or create something total new. Acquire an indepth understanding of blue ocean strategy tools and concepts developed at insead. Insead blue ocean strategy offers a new perspective on strategy formulation and execution. Strategy compelling blue ocean strategy canvas it captures the current state of play in the known market space allow you to understand. Jun 08, 2007 profit model of blue ocean strategy 30.
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. 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. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. The blue ocean strategy bos is the strategic organizational approach that is based on the principle that companies should not engage in a competitive struggle but that. Bos four actions framework errc grid innovating now. Blue ocean pedagogical materials, used in over 2,800 universities and in almost every country in the world, go beyond the standard casebased method. The bluest ocean strategy for emerging ict business. Late last month, honda motorcycle and scooter india hmsi. They are the authors of blue ocean strategy, which has sold over 3. These strategies are used in organizations by top level executive managers for long term organizational sustainability and to face or deviate from the competition.
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