Blue Ocean Red Ocean vs. You may think that Chan Kim and Renee Mauborgne may fall into the category of trying to coin new words to set their concepts apart, but there is method to the madness.
Chan Kim and Renee Mauborgne launched a revolution in business strategy by encouraging firms to evacuate shark infested waters. Their book, " Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant," Harvard Business Review Press suggests companies are better off Pepsi blue ocean strategy for ways to gain "uncontested market space" over competing with similar companies.
These new spaces are described as "Blue Oceans," compared to the struggle for survival in bloody "Red Oceans" swarming with vicious competition. The Blue Ocean Strategy represents the simultaneous pursuit of high product differentiation and low cost, thereby making competition irrelevant.
The key to exceptional business success, the authors say, is to redefine the terms of competition and move into the "blue ocean," where you have the water to yourself. The goal of these strategies is not to beat the competition, but to make the competition irrelevant.
To discover an elusive Blue Ocean, Kim and Mauborgne recommend that businesses consider what they call the Four Actions Framework to reconstruct buyer value elements in crafting a new value curve. The framework poses four key questions: What factors were a result of competing against other industries and can be reduced?
Which factors that the industry has long competed on should be eliminated? Which factors should be created that the industry has never offered? This exercise forces companies to examine every factor of competition, guiding leaders to discover the assumptions they unconsciously make while competing.
They can then search for blue oceans within their industries and make the shift. According to Mauborgne, it failed in a few instances against Zappos, eBay and Apple.
Imitation is not the path to success, especially in the overcrowded industries most companies today confront. Making the shift When there is limited room to grow, businesses try and look for verticals of finding new sectors where they can enjoy uncontested market share.
The aim is to capture new demand with a superior product that makes competition irrelevant. As stores continue to expand and American shopping habits change, retailers are going bankrupt at record-high rates. Beyond Competing " Hachette Books, The one-page analytic helps businesses to focus on an industry and its key competing factors.
That creates a real wake-up call, gets everyone aligned and creates a strong impetus for change. Additional reporting by Kayla Harrison.
She is incredibly interested by the intersection of business development and environmental preservation. You May Also Like.A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies.
You must keep in mind that there is a deeper potential of the marketplace that hasn’t been explored yet. Count is a San Francisco based producer who has been involved in just about every aspect of the music business.
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How does blue ocean strategy differ from red ocean strategy? See comparison between red and blue ocean strategies here in one simple table. This or that is a fun game that can be played with friends at the parties or with your date.
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