Blue Ocean: Company creates new market

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	Blue Ocean
Compete in existing market space	Create uncontested market space
Beat the competition	Make competition irrelevant
Exploit existing demand	Create and capture new demand
Make the value-cost trade-off	Break the value-cost trade-off
Pursue either low cost or differentiation	Pursue low cost and differentiation

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.