To understand red ocean strategy let us begin by defining blue ocean strategy. Companies should instead look for new market space and ways to reinvent the industry. This blog article is a overview of some of the key points of the book by w. Blue ocean strategy is the 2015 update to the classic business strategy text of the same name originally published in 2005. Made by group d of the minor global trendwatching 2015. Chan kim and renee mauborgne, professors at insead. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. Blue ocean strategy blue ocean strategy pdf blue ocean strategy 2004 five keys to blue ocean strategy compte nickel blue ocean strategy blue ocean strategy expanded edition book summary blue ocean strategy blue ocean strategy book by w. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price.
This new market space is created by launching new offerings, with the aim being to make the competition irrelevant so that an organization can grow, uncontested, at least in the beginning. Rather than competing within the confines of the existing industry or trying to steal customers from rivals bloody or red ocean strategy in the hbr of october 2004 w. For generations, business schools have taught some form of strategy for business leaders to execute when they are in a business that faces fierce. Let us say the market that we operate is an ocean cle. The database and research have continued to expand. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. The six red ocean traps are the explicit and implicit assumptions managers often act under in setting out to make marketcreating strategic moves. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy, now updated with fresh content from the authors, argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Blue oceans, where a market space is new and uncontested, and strategy centers around value innovation. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. Kicking off the book with four analytical tools that promise to help firms find and exploit untapped markets, the authors offer a step by step approach, comprised of six principles, on how to break away from the competition of red oceans and execute a blue ocean strategy.
But ford and chrysler followed this strategy, and they began a red ocean period of competition and imitation. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. First published in 2005, it was updated and expanded with fresh content in 2015. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. Written by the business worlds new gurus, blue ocean strategy continues to challenge everything you thought you knew about competing in todays crowded market place. Blue ocean strategy is the most successful book on business masterplanning the economist a great read for any leader looking to get a real edge in business and establish a real competitive advantage in the market. The concept of blue ocean strategies is new in the business world as it was first published in 2005 in the bookmanual blue ocean strategy, by w. It is being published in a recordbreaking 46 languages and is a bestseller across five continents. Clearly, a red ocean strategy tends to invite strong competition, which often becomes a race to the bottom in terms of pricing. The blue ocean strategy book defines red oceans as those which already contain a high level of competition. Although there is an inevitability to having to compete in crowded markets, there are too many advantages to avoiding this situation to ignore the possibility of looking for blue space. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, authors w.
So blue ocean strategy is about how can any company or organization break out of the red ocean of bloody competition or existing market space, which tends to. Chan kim and renee mauborgne, professors at insead, back in. In the 1970s, japanese manufacturers created a blue ocean of small, efficient, highquality cars. How to create uncontested market space and make the competition irrelevant, a book by professors w. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. Chan kim and renee mauborgne argue that lasting success comes from creating blue oceans. Value innovation strategy competes in an uncontested market space.
A red ocean strategy involves competing in industries that are currently in existence. For this strategy, the key goals are to beat the competition and exploit existing demand. Let me try to explain this in simple terms for the benefit of everyone. The text offers a practical handbook to business students and entrepreneurs who wish to rise above the fray of the competition, become pioneers in previously uncharted market territory, and gain access to impressive growth opportunities and an untapped customer base. One of my favorite business books is called blue ocean strategy, written by w. According to kim and mauborgne, competing in overcrowded industries is no way to sustain. All in all, blue ocean strategy is a book worth reading. The economist a great read for any leader looking to get a real edge in business and establish a real competitive advantage in the market. We all know well about redblue ocean strategy, how each ocean colour are works. In order to create this shift in attention from red oceans to blue oceans the authors came up with a concept called value innovation that allows for a simultaneous pursuit. Blue ocean strategy can be found on amazon blue ocean strategy.
Learn more about what a blue ocean strategy is here. The possibility that contenders are battling in a red ocean of blood while there is constantly a blue sea of chance is an amazing visual thought that most perusers could. In this article you will learn how to make your competition irrelevant and have sales and profit. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. To join the free indie business book club, click here. How to create uncontested market space and make the competition irrelevant, w. Embraced by organizations and industries worldwide, blue ocean strategy is a global phenomenon that has sold over 4 million copies.
Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Summary of the first four chapters of the international bestseller blue ocean strategy. This book is a mustread for any small business owner or wannabe entrepreneur. Blue ocean strategy suggests that an organization should create new demand in an uncontested market space. The research focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean. A lot has been written about it and i would have said practically everything had been said about it until i looked up the book on amazon to see the current price. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Chan kim and renee mauborgne introduced the term red ocean and blue ocean a few years ago with their book blue ocean strategy.
Blue ocean strategy is an important book for anyone seeking a strategy that can help them in their career and in business. By that we can see that there is a lot of interest by the business people and academics around the world about that subject. Blue ocean strategy including examples and pdf download. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. In other words, when you go headtohead against rivals for a share of the existing market, this is like competing in a red ocean. Red oceans, where competition is fierce in bloody waters, strategy centers around beating rivals, and wins are often zerosum.
Blue ocean strategy is the most successful book on business masterplanning. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. They are the authors of blue ocean strategy, which has sold over 3. The trouble is, instead of helping in the creation of profitable new markets, they anchor managers in red oceans and prevent them from entering blue waters. If you want to avoid a red ocean, you should create a blue ocean strategy for yourself. To address these questions, we turn to the strategy canvas, an analytic framework that is central to value innovation and the cre ation of blue oceans. Compete in existing market space create uncontested market space beat the competition make the competition irrelevant exploit existing demand create and capture new demand make the valuecost tradeoff break the valuecost tradeoff align the whole system of a firms activities with its strategic choice of differentiation or low cost. Blue ocean strategy accompanies the guarantee of an outright move by the way you will consider business and just conveys some new intriguing systems to add to your toolbox. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the. Based on a study of 150 strategic moves spanning more than 100 years. Chan kim and renee mauborgne 2006 blue ocean strategy has been described as a must read for all business students. Pdf blue ocean strategy download full pdf book download.
Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. Blue ocean strategy is where a company creates a completely new market space or market category. Where red ocean strategy is a zerosum game that is all about splitting up the pie between rivals, blue ocean strategy is about creating the pie andor enlarging it. You may or may not agree with the central philosophy, but you will be inspired.
Blue ocean strategy pushes companies to create new industries and break away from the competition. How to create uncontested market space and make competition irrelevant. The strategy canvas provides a highly visual tool to help look at future options. Blue ocean strategy page 1 main idea the best way to beat your competition is, in fact, to stop competing against them. The insead blue ocean strategy institute is dedicated to extending the research on blue ocean shift, blue ocean strategy, and blue ocean leadership by chan kim and renee mauborgne and disseminating it to professors, researchers and practitioners around the globe.249 346 1189 632 427 25 649 1408 1190 240 56 776 1035 1478 1457 1006 135 845 824 564 1254 197 384 1100 1249 293 935 13 1413 1160 188 1300 919 8 1002