2. what is blue ocean strategy ?
Blue ocean strategy is embodied by Professors W. Chan Kim
and Renée Mauborgne in a book called Blue ocean strategy. It
was published by Harvard Business School Press.
Blue ocean strategy, is a result of study of decade-long study of
more than 150 strategic moves spanning more than 30
industries over 100 years (1880-2000).
The aim of Blue ocean strategy is not to out perform the
competition in the existing industry, but to create new market
space or a blue ocean.
Blue ocean strategy offers systematic tools and frameworks to
break away from the competition and create a blue ocean of
uncontested market space.
3. Characteristics of BOS
Focus
A good strategy should have a strong focus, and a company’s
strategic profile should clearly show it.
Focus is all about execution of key factors that the organization
has raised in its strategic canvas. Customers will have to feel the
differentiation.
Divergence
The value curve of blue ocean strategy always stands apart from
the competitors. Reactively formed strategies tries to keep up
with the competition, thus loosing uniqueness.
Divergence helps differentiating company from the industry’s
average profile and helps them to achieve a
4. leap in value on strategy canvas, such as low-cost business
model. It makes the company to stand apart from the rest.
Compelling tagline
A good strategy has a clear-cut and easy to communicate
tagline. Unless the customers and employees aren’t informed
about the strategy, it’s unlikely they would appreciate them.
‘Tagline’, a term that’s close to the heart of marketing folks is
also evolved from the strategy canvas of the Blue Ocean
Strategy. In simple words, it is a factor(s) which is newly created
by the organization and not present in the competitors of the
industry.
Characteristics of BOS
5. Advantages & Disadvantages
It’s grounded in data. Ignoring relevant competition.
It pursues differentiation and low
cost. Reinventing the wheel.
It creates uncontested market space.
Swimming too far.
It empowers through tools and
frameworks. No fish.
It provides a step by step process.
It maximizes opportunity while
minimizing risk.
It builds execution into strategy.
It shows how to create a win-win
outcome.
6. BOS Vs. ROS
Blue Ocean Strategy Red Ocean Strategy
Create uncontested market
space.
Compete in existing market
space.
Make the
competition irrelevant.
Beat the competition.
Create and
capture new demand.
Exploit existing demand.
Break the value-cost trade-off. Make the value-cost trade-off.
Align the whole system of a
firm’s activities in pursuit of
differentiation and low cost.
Align the whole system of a
firm’s activities with its strategic
choice of differentiation or
low cost.
8. Sequence of BOS
Companies need to build
their blue ocean strategy in
the sequence of buyer utility,
price, cost, and adoption.
This allows them to build a
viable business model and
ensure that a company profits
from the blue ocean it is
creating.
Here Kim and Mauborgne
articulate the strategic
sequence of Blue Ocean
Strategy and a commercially
viable blue ocean idea.
9. The database and research have continued to expand and grow
over the last ten years since the first edition of the book was
published and the strategic moves studied depict similar
patterns, whether blue oceans were created in for-profit
industries, non-profit organizations, or the public sector.
Here are a few brand examples of different industries and
sectors whose are adapted blue ocean strategic moves.
BOS Moves Globally
10. Canon’s strategic move, which created the personal desktop
copier industry, is a classic example of blue ocean strategy.
Traditional copy machine manufacturers targeted office
purchasing managers, who wanted machines that were large,
durable, fast, and required minimal maintenance.
Defying the industry logic, the Japanese company Canon
created a blue ocean of new market space by shifting the target
customer of the copier industry from corporate purchasers to
users. With their small, easy-to-use desktop copiers and printers
Canon created new market space by
BOS Moves of Canon
11. focusing on the key competitive factors that the mass of
noncustomers – the secretaries that used copiers – wanted.
By questioning conventional definitions of who can and should
be the target buyer, companies can often see fundamentally new
ways to unlock value. Path three of blue ocean strategy’s six
paths framework pushes companies to look across the chain of
buyers in their industry. By shifting focus to a previously
overlooked set of buyers, companies can unlock new value and
create uncontested market space.
BOS Moves of Canon
12. Reference
► W. Chan Kim and Renée Mauborgne, Blue
ocean strategy, Harvard Business School
Press.
► www.blueoceanstrategy.com.
► www.nasscom.in, Blue ocean strategy
presentation.
► www.studymarketing.org, Blue ocean
strategy
