Chan kim and renee mauborgne, identify mental models that undermine marketcreating strategies. How to create uncontested market space and make the competition irrelevant by w. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue. Matthew ellis business 109 section 22 10112015 professor jasso citation.
It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. Chan kim is a professor of strategy and management at insead and codirector of the insead blue ocean. Those who want to create a blue ocean strategy for their company must focus on value innovation that makes the competition irrelevant by the simultaneous pursuit of differentiation and low cost, thus creating a leap in value for the customers and an uncontested market space for the company. Innovation, new market space and creating demand are central characteristics. 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 costs. In a nutshell, blue ocean strategy proposes that strategy can shape industry structure, whereas competitive strategy sees strategy as choosing the right position under given structural constraints. How to create uncontested market space and make the competition irrelevant, a book by professors w. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Importance of the blue ocean strategy to a business. Blue ocean shift is packed with realworld examples of organizations facing the same constraints we all face be they politics, bureaucracy, or limited resources that applied the very tools and process outlined in the book to shift from competi. They are the authors of blue ocean strategy, which has sold over 3. Blue ocean strategy is a method of creating business strategy of the enterprise, which was described in a book by w. Blue ocean strategy including examples and pdf download.
A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. Development of chemical biology tools focusing on peptideamide bond cleavage reaction. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w. Achieved via the delivery of features that have a highest marginal benefit to customer needs.
After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. How to create uncontested market space and make the competition irrelevant 2015. Since 2007, she has conducted over 400 workshops and speeches and worked with dozens of clients on. This blog article is a overview of some of the key points of the book by w. The nintendo wii launched in 2006 and at its heart is the concept of value. Download citation blue ocean strategy despite a longterm decline in the circus industry. In this way, it swam into a blue ocean, offering a plastic watch at a price that allowed people to purchase two or three watches at one. 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. The first example of blue ocean strategy comes from computer games giant, nintendo, in the form of the nintendo wii. An introduction to blue ocean strategy mba knowledge base. He was satisfied with the work he had done, yet frustrated that it had taken so long to complete the project.
Blue ocean strategy and its implications for businesses. 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. What is distinctive about blue ocean strategy as a theory. The cellsmart phone industry is constantly looking for new blue ocean market space to gain a. Blue ocean strategy is innovative, and it creates a. The real opportunity is to create blue oceans of uncontested market space. The four pillars of blue ocean leadership insead knowledge. Blue ocean strategy is a landmark idea founded by w. How to create uncontested market space and make the competition irrelevant w.
Presents a set of analytical tools and frameworks that can enable firms to develop blue ocean strategies. Study 31 terms blue ocean strategy flashcards quizlet. 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 blue ocean approach is based upon the concept of value innovation which was also introduced by the authors of the blue ocean strategy, kim and mauborgene. Blue ocean leadership is designed to be applied across the three distinct management levels. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. What are some successful examples of blue ocean strategy. Pdf blue ocean strategy for creating value of the organization. The structure can be created or recreated by the steps taken by players in the market. 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. In studying more than 150 blue ocean creations in over 30 industries, the authors observed that the traditional units of strategic analysiscompany and industryare of limited use in. Finally, my last question was related to the previous one, do companies are. Pdf harvard business school press blue ocean strategy rajeh. While keeping away from the utilization of harvard business.
Essay about blue ocean strategy 825 words bartleby. Red ocean strategy blue ocean strategy the statistical population and community of customers in the blue ocean strategy include kim and mauborgne, 2005. Pdf for creating new demands and open up a new market space the pursuit of. Chan kim and renee mauborgne advocate a different approach to strategy. Blue ocean strategy how to create uncontested market space and make the competition irrelevant facilitators. Blue ocean strategy and sustainability for strategic. Blue ocean strategy is a strategy that advice companies to go to a new market, which interest. How to create uncontested market space and the make competition irrelevant 2005. Value innovation strategy competes in an uncontested market space. Blue ocean strategy is a book published in 2005 and written by w. The blue ocean strategy is based on the concept that industry structure and market boundaries. 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 notes matthew ellis business 109.
Examples include dupont with its lycra brand in specialty chemicals, philips. Chan kim and renee mauborgne wrote a bestselling book, blue ocean strategy, which has been translated into 43 languages. Blue ocean strategy is a theory explained in a 2005 book by w. 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. 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. It is growing fast, at a compound annual rate of eleven per cent. The on the blue ocean strategy essay 1969 words 8 pages. Last few years, the number of desired structure of the strategy has been changed and for this, new. This group includes those who are consistently using the existing products and services. Competitive forces different business units face different structural conditions with different resources, capabilities and different strategic mind. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. In the ten years since the first edition of blue ocean strategy was published, professors kim and mauborgne have had myriad. Download a pdf of this article and check back next tuesday for how to see your leadership reality.
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. Our study shows that blue ocean strategy is particularly needed when supply exceeds demand in a market. Closing the gap between blue ocean strategy and execution. The blue ocean strategy works to create an untapped marketplace outside of the traditional market boundaries. The concept of blue ocean is based on the idea that the business universe is made up. The strategy can transform a current product or idea or create something total new. Chan kim and renee mauborgne in their book blue ocean strategy. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to bring the blue. Blue ocean strategy hbr bestseller harvard business publishing. They represent businesses that may not be around today, or werent around until they came on to the scene. Blue ocean strategy is a concept that has been pioneered by insead professors, w. The blue ocean strategy can be extremely rewarding, but can also be the most work intensive. In 2011, the sole proprietor of wetlandpools, a specialist installer of non chemical swimming pools based in johannesburg, south africa, was looking at the design of his latest creation.
The premise of the book is that companies can succeed by creating. In this article you will learn how to make your competition irrelevant and have sales and profit. Red ocean is older and known including things such as competition, rules, and market dynamics. Hbrs 10 must reads on strategy including featured article what is strategy.
They are completely or relatively satisfied with provided service. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Blue ocean strategy how to create uncontested market space and make the competition irrelevant boston. 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 field of strategy has been long dominated by a structuralist view. Eight key points of blue ocean strategy heres the essence of blue ocean strategy captured in eight key points. It calls for profiles for leaders that are tailored to the very different. 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. Blue ocean strategy how to create uncontested market. Blue ocean strategy blue ocean strategy is a strategic move that organizations or individuals use to create new product or ideas. Kim introduced the concept of blue ocean strategy that is the. View the entire blue ocean leadership series here w.
Competing in overcrowded industries is no way to sustain high performance. 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. Blue ocean strategy mkt421 september 1st, 2014 blue ocean strategy the term blue ocean is slang for an uncontested market space in a known industry or innovation investopedia, 2014. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present.
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