The competition in the world
companies make their own and different ways in order for success to them. But
this competitions are damaged companies. Some companies can’t survey in this
market and not profitable. It is called Red Ocean. In a Red Ocean market,
everyone is just talking a different version of the same thing to the same
group of people. In that case people search new market, which is less completion.
It is called blue ocean strategy.
This blog article talk about, what
is Blue Ocean and red ocean strategy. In
this article you will learn the value Innovation of blue
ocean strategy example of a blue
ocean, the four actions framework, sales and profit growth
Blue Ocean – you are the only fisherman in an ocean full of fish.
The idea which is brought by blue
ocean strategy became known because of the blue ocean book made by Kim and
Mauborgne. The blue ocean strategy book is entitled as how to Generate
Uncontested Market Space and Make the Competition Irrelevant. A Blue Ocean
offers new opportunity for profitable and rapid growth to an entirely new
market. This is look to create new demand in uncontested market space. As
operating in uncontested market no or lack of completion, can leads to faster
growth and higher profits. Blue ocean strategy is the key behind some of the
most successful companies including apple, Microsoft in world and Rio ice cream,
siddhalepa in Sri Lanka
Red Ocean versus Blue Ocean Strategy
Red Ocean
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Blue Ocean
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Compete in existing market space
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Create uncontested market space
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Beat the competition
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Make competition irrelevant
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Exploit existing demand
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Create and capture new demand
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Make the value-cost trade-off
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Break the value-cost trade-off
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Pursue either low cost or differentiation
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Pursue low cost and differentiation
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Value Innovation of Blue Ocean Strategy
Value innovation, the cornerstone
of blue ocean strategy, is the simultaneous pursuit of differentiation and low
cost, creating a leap in value for both buyers and the company. Because Cost
savings are made by eliminating and reducing the factors an industry competes
on. Buyer value is lifted by raising and creating elements the industry has
never offered.
The Four Actions Framework
The Four Actions Framework is used
to reconstruct buyer value elements in crafting a new value curve. To break the
trade-off between differentiation and low cost and to create a new value curve.
When you look at the competitive factors, there are really only four actions
you can take with them. You can eliminate them completely, you can reduce your
investment in them, you can raise your investment in them or you can create
totally new factors. These four actions then are the basis for creating a new
strategy canvas. Here is a picture of the concept.
Blue Ocean is effective as it’s the
ability to force companies to have a difference of operation ways. Blue ocean
strategy also pushes the companies to build new industry boundaries. It also
encourages them to listen to their customer’s needs. It also pushes the
companies to spot unappealing markets and to receive niche in order for them to
make use of it. Blue ocean strategy mostly invite new groups of customers. The
blue ocean companies can accomplish things through pursuing differentiation and
low cost simultaneously. Thus, economic barriers are being formed. In effect,
interest in their products and as well as their services are being created.
They may even no longer must fight with their competitors.
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