Blue Ocean Strategy

Blue Ocean Strategy

  • Submitted By: Badhon
  • Date Submitted: 11/25/2015 12:21 PM
  • Category: Business
  • Words: 1536
  • Page: 7


This is the first chapter of Blue Ocean Strategy. This book is written by Professor W. Chan Kim and Renee Mauborgne in 2005 from Harvard Business School. They research for around over 20 years and sum up a theory of Blue Ocean. The terms Blue Ocean and Red Ocean are:

Red Ocean Strategy
Blue Ocean Strategy
Compete in exiting market space
Create uncontested market space
Beat the competition
Make the competition irrelevant
Exploit exiting demand
Create and capture new demand
Make the value cost trade off
Break the value cost trade off
Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost.
Align the whole system of a firm’s activities in pursuit of differentiation and low cost.

Professor Kim indicates that the only way to beat the competition is to stop trying to beat the competition. Red oceans represent all the industries in existence today. The products or services in red oceans are reducing profit margin in cutthroat competition. The bleeding price strategy turns the market space into a blood bath. Blue oceans denote all the industries not in existence today. The market space is not exiting before and there is a highly demand creation and opportunity in return of high profitable growth.
Companies what only thought of being in the red oceans are now willing to have themselves in blue oceans. As red oceans included/ represented all the industries, which are in the market space basically and that involved competition and rules of the games are known and as we find similarities the red ocean starts getting bloody, where profits and growth starts getting reduced. But in contrast the blue ocean provides the untapped market space where there are opportunities of growth. We must also value red ocean as the basic way towards reaching into the blue ocean is the red ocean as when companies operates/ starts functioning it to have to go through the red ocean in order to know...

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