Let us say the market that we operate is an ocean cle. Blue ocean strategy financial definition of 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. Chan kim and renee mauborgne 2006 blue ocean strategy has been described as a must read for all business students. Blue oceans, where a market space is new and uncontested, and strategy centers around value innovation. Blue ocean strategy continues to challenge everything you thought you knew about competing in todays crowded market place. Blue ocean strategy and blue ocean shift, created by worldrenowned professors chan kim and renee mauborgne, is a new way of thinking, a movement away from a. Blue ocean strategists have always existed but for most part their strategies have been largely unconscious. We all know well about red blue ocean strategy, how each ocean colour are works. Blue ocean strategy is based on scientific research and a course at insead. How to create uncontested market space and make the competition irrelevant book online at best prices in india on. The competition is directly inspired and based on chan kim and renee mauborgnes blue ocean strategy and blue ocean shift bestselling books.
You may or may not agree with the central philosophy, but you will be inspired. In red oceans, industry boundaries are defined and accepted, and the. Its a fantastic device for conceptualizing the red oceans of todays competition. Made by group d of the minor global trendwatching 2015. Nov 04, 2018 blue ocean strategy, create new markets and leave the competition behind renee mauborgne wobi duration. In a fiercely competitive saturated market, companies struggle to stay alive over the longterm. 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. A red ocean is a metaphor for a market full of competitors. The 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 ocean strategy pushes companies to create new industries and break away from the competition. Let me try to explain this in simple terms for the benefit of everyone. This type of industry describes a red ocean, representing a saturated. Whichever is chosen the organization must align all activities with one of these strategic directions. It is a dangerous bad book because it takes some thinking to figure out why it is bad, despite its success, and despite the fact that its key metaphor of blue ocean vs.
Chan kim and renee mauborgne in their book blue ocean. The authors discuss the benefits for business owners to leave the red ocean. While the book describes how and why blue ocean strategies work, the book fails to lay down a viable plan for companies that seeks to enter the blue ocean to follow. The good news is, the shift to a happy blue ocean is possible. A company will have more success, fewer risks, and increased profits in a blue ocean market. How to create uncontested market space and make competition irrelevant. Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. 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. The blue ocean strategy explains how to guide your business across seas with less competition and greater profitability. Authors deal with the phenomenon of blue ocean, a market space occupied by few companies where. Citing companies such as starbucks, dell and netjets, these case studies prove that there is room for new markets and innovation in every sector. 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. Blue ocean vs red ocean strategies 6 major differences. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies.
Featured on more than 300 bestseller lists across the globe. Chan kim and renee mauborgne, professors at insead, back in 2004. See comparison between red and blue ocean strategies here in one simple table. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Blue ocean strategy page 1 main idea the best way to beat your competition is, in fact, to stop competing against them. May 14, 2019 this is what the authors of blue ocean strategy call a strategy canvas. An example of a successful execution of a blue ocean strategy is the ipod. So powerful is blue ocean strategy, in fact, that a blue. Chan kim pdf download blue ocean blue ocean shift pdf blue ocean strategie blue ocean shift ocean blue sanded grout blue ocean shift espanol pdf red ocean strategy 15fen finding the blue ocean. This happened, for example, when apple created its itunes music download service in 2003. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. Surface 3 and apple watch red oceans v blue oceans strategy. Apr 10, 2012 blue ocean strategy blue ocean strategy tools bos strategy tools six principles of blue ocean formulating blue ocean strategy the principles that drive the successful formulation are reconstruct market boundaries, focus on the big picture, not numbers, reach beyond existing reconstruct market focus on the big demand, and get the strategic.
Blue ocean strategy chan kim and renee mauborgne was released in 2005 by harvard business school press. Each industry underwent continuous upheaval, each time spurred by a blue ocean strategy that 1 reduced factors unimportant to buyers, 2 increased factors important to buyers, 3 expanded the market. Blue ocean strategy how to create uncontested market space and make the competition irrelevant facilitators. Thinkers50 strategy award for best business book of the decade. Chan kim and renee mauborgne and detailed in their 2005 book, blue ocean strategy. The blue ocean strategy is particularly needed when supply exceeds demand in a market. Blue ocean strategy blue ocean strategy is a business strategy book published in 2005 by harvard business school publishing corporation in united state of america, it was written by w. This blog article is a overview of some of the key points of the book by w. One of the most successful efforts to do so is the book blue ocean strategy, by w.
May 26, 2015 summary of the first four chapters of the international bestseller blue ocean strategy. Blue ocean strategy is where a company creates a completely new market space or market category. The concept of blue ocean strategies is new in the business world as it was first published in 2005 in the bookmanual blue ocean strategy, by w. Blue ocean strategy is the most successful book on business masterplanning the economist. Blue ocean strategy proposes that businesses can have more success by creating a blue ocean, rather than trying to compete in the red ocean. All in all, blue ocean strategy is a book worth reading. This book should be interesting for corporate strategy decision influencers, including executives, strategy analysts, corporate entrepreneurs, business owners, and strategy consultants.
But, lets first understand what is blue ocean and how it is different from red ocean strategy. Blue ocean strategy is based on the idea that every enterprise can achieve higher profit by creating new demand in noncompetitive market so called blue ocean. Blue oceans and industrial heresy striving strategically. Competing in red oceans dominates the current field of strategy in theory and in practice, even as businesses need to create blue ocean strategy heightens. 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. Chan kim and renee mauborgne suggest blue ocean strategy.
The blue ocean strategy is a business book that has become mandatory for modern managers by proposing an organized structure to identify and implement differentiation in any industry and help you grow your business faster. A red ocean strategy ultimately leads to an organization choosing to follow one of two strategies differentiation or low cost. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. Red oceans are all the industries in existence today the known market space, where industry boundaries are defined and companies try to outperform their rivals to grab a greater share of the existing market. To join the free indie business book club, click here. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. For generations, business schools have taught some form of strategy for business leaders to execute when they are in. To understand red ocean strategy let us begin by defining blue ocean strategy. In a red ocean strategy, companies focus on existing customers and. Jul 16, 2015 the blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. Unlike red oceans, which are well explored and crowded with competitors.
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. Blue ocean strategy is an important book for anyone seeking a strategy that can help them in their career and in business. Sloane award for excellence in management consulting. Value innovation strategy competes in an uncontested market space. Theyre fighting it out in the bloody red ocean of rising competition and lowering demand. One of the book s strong points is its wealth of reallife blue ocean and opposing red ocean examples. Achieved via the delivery of features that have a highest marginal benefit to customer needs. To understand what a red ocean is, lets talk about the blue ocean. The blue ocean strategy means that you find some aspect of your market that no one is doing, and try to dominate that, rather than fighting it out with other vendors in your space a red ocean strategy. Blue ocean strategy suggests that an organization should create new demand in an uncontested market space. Blue ocean strategy is the most successful book on business masterplanning. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition.
Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. Apr, 2016 this strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Blue ocean strategy claims to unravel the key to success for companies by focusing on the strategic moves rather than specific industry or companies. Embraced by organizations and industries worldwide, blue ocean strategy is a global phenomenon that has sold over 4 million copies, is published in a recordbreaking 46 languages and is a bestseller across five continents. 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. Based on a study of 150 strategic moves, spanning more than 100 years across 30 industries, the authors, chan kim and renee mauborgne show that lasting. Blue ocean strategy blue ocean strategy pdf five keys to blue ocean strategy blue ocean strategy 2004 book summary blue ocean strategy blue ocean strategy expanded edition blue ocean strategy book by w. Red oceans are described as all the industries in existence today. Blue ocean strategy including examples and pdf download.
What is blue ocean strategy about blue ocean strategy. A business model describes the rationale of how an organization creates, delivers, and captures value economic, social, cultural, or other forms of. The idea behind the blue ocean strategy is to move your business out of a red ocean market and into a blue ocean market. One is by launching or introducing a completely new product, service, or concept. Mauborgne nevertheless attack him head on, arguing that the five forces analysis is a formula for remaining in red oceans, where the sharks compete. Long enough to describe the strategy and explain the pitfalls, but not padded too far. It became a huge bestseller, and remains popular today. Blue ocean strategy can be applied across sectors or businesses. You must keep in mind that there is a deeper potential of the marketplace that hasnt been explored yet.
The blue ocean strategy represents the simultaneous. Blue ocean strategy refers to the building of a new, uncontested market space that makes competitors irrelevant. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. Blue ocean strategy is a business plan of action developed by w. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy, now updated with fresh content from the authors, argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Red oceans, where competition is fierce in bloody waters, strategy centers around beating rivals, and wins are often zerosum. A term coined from the 2005 book, the blue ocean strategy, by w. Blue ocean strategy institute at insead business school for the world research for the book was funded by pricewaterhousecoopers and the boston consulting group, and it was conducted at insead business school for the world. Blue ocean strategy is a method of creating business strategy of the enterprise, which was described in a book by w. Importance of the blue ocean strategy to a business bizfluent. One of my favorite business books is called blue ocean strategy, written by w. The possibility that contenders are battling in a red ocean of blood while there is constantly a blue sea of chance is an amazing visual thought that most perusers could feel as totally troublesome and rousing.
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. Although there is an inevitability to having to compete in crowded markets, there are too many advantages to avoiding this situation to ignore the possibility of looking for blue space. A lot of businessesby definition are not blue ocean companies. Even if you dont have your own business, blue ocean strategy s creative recommendations are useful to stretch and challenge your current thinking. Rather than competing within the confines of the existing industry or trying to steal customers from rivals bloody or red ocean strategy in the hbr of october 2004 w. Chan kim and renee mauborgne is not the breeziest read but it has some very interesting points for business owners. Using dozens of examplesfrom southwest airlines and the cirque du soleil to. The economist a great read for any leader looking to get a real edge in business and establish a real competitive advantage in the market. Red ocean vs blue ocean an introduction to blue ocean. The blue ocean strategy book defines red oceans as those which already contain a high level of competition. In other words, when you go headtohead against rivals for a share of the existing market, this is like competing in a red ocean. In this 5 minute blog, ill tell you what the difference is between a red ocean vs blue ocean and how you can survive a red ocean and swim into a more profitable and audible blue one. Chan kim and renee mauborgne that describes the opportunities of vast, untapped market spaces, or blue oceans, that can be developed by expanding market boundaries or launching new industries.
Authors our story what we stand for books blue ocean global network. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w. 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. Chan kim and renee mauborgne, professors at insead. A red ocean is created when lots of businesses are operating in the same market space, all pretty much doing the same thing. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. While this came in appendix a in the book, this is a good time to cover three industries with repeated blue ocean creation. The strategy canvas provides a highly visual tool to help look at future options. In red oceansthat is, in all the industries already existingcompanies compete by grabbing for a greater share of limited demand. The concept of blue ocean strategies is new in the business world as it was first published in 2005 in the book manual blue ocean strategy, by w. Blue ocean strategy accompanies the guarantee of an outright move by the way you will consider business and just conveys some new intriguing systems to add to your toolbox. Apr 03, 2010 blue ocean strategy summary and examples 1. Blue ocean strategy can be found on amazon blue ocean strategy. How to create uncontested market space and make the competition irrelevant is the 2015 update to the classic business strategy text of the same name originally published in 2005.
The possibility that contenders are battling in a red ocean of blood while there is constantly a blue sea of chance is an amazing visual thought that most perusers could. A blue ocean where an affiliate marketer creates a completely new market space or market category. Chan kim and renee mauborgne in the indie business book club. The structure can be created or recreated by the steps taken by players in the market. Companies should instead look for new market space and ways to reinvent the. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. A good example of red ocean strategy is the european airline operator ryanair or southwest if you like in the. All these businesses are targeting the same customers and market share. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Blue ocean is a slang term referring to the uncontested market space of an. By that we can see that there is a lot of interest by the business people and academics around the world about that subject. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy. Jul, 2018 these new spaces are described as blue oceans, compared to the struggle for survival in bloody red oceans swarming with vicious competition.
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. Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. Once companies realize that blue ocean strategies have a different underlying. In todays environment most firms operate under intense competition. Based on a study of 150 strategic moves spanning more than 100 years. A lot has been written about it and i would have said practically everything had been said about it until i looked up the book on amazon to see the current price.
Chan kim and renee mauborgne in their book blue ocean strategy. Blue oceans denote all the industries not in existence today the unknown market space, unexplored and untainted by competition. There are two ways we can create a blue ocean strategy. How to create uncontested market space and make competition irrelevant, is a market space that is undeveloped, and untapped by competitors. Pdf blue ocean strategy download full pdf book download. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Most blue oceans are created from within red oceans by expanding existing industry boundaries. 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 untapped customer base. The profit is much easier than the rivalry with the competition on existing markets. In this context, marketplace means the same as market in its abstract sense.
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