Hence, the term ‘red’ oceans. Despite resisting intense competition for years, this project drew the attention of its end users because it satisfied their major need: a simple and free of charge tool for holding conferences online. For example, the higher cost of manufacturing of the product can be reduced. Focus on current customers vs. focus on noncustomers. So, they always intend to beat the competitors through marketing policy, product quality, and services. Cirque de Soleil. Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, Funky Business explained that "Competitive Strategy is the route to nowhere". It makes a totally new marketplace for the industry. Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne. Red Ocean Strategy Overview The Red Ocean Strategy is about competing in an existing market space that is generally crowded. Red Oceans are described as all the industries in existence today: the known market space. In most industries there is little effort to … The Blue Ocean strategy can lead to expansion of the business through increased profits. To create these new features, you need to investigate the customer’s desire to fulfill. Blue Ocean Strategic Moves. iTunes solved the problem of recording industries when it started the business. The blue ocean strategy, on the other hand, involves finding, developing or creating new and uncontested markets. For example, "competing factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business. They were also INSEAD professors. Customer Focus Red Ocean strategy focuses on existing stream of customers. Most companies have a hard time of identifying both. W. Chan Kim & Renée Mauborgne coined the terms red and blue oceans to denote the market universe. These are the very important factors that need to be increased to fulfill the industries well above standards. The four Actions Template determines whether the investment money in the proper ways around the product to maximize consumer gain and minimize consumer pain. Learn the essentials of blue ocean strategy and shift created by the #1 Management Thinkers in the World. The eight key points of the Blue ocean strategy are as follows; Figure 1: Differences Between Red Ocean and Blue Ocean Strategyeval(ez_write_tag([[300,250],'newsmoor_com-banner-1','ezslot_2',166,'0','0'])); In the red ocean strategy, most industries focus on attracting existing customers to sell more products and services. CONTENTS • Red Ocean Strategy • Customer Value • Examples of Red Ocean • Red vs. Blue Oceans • Comparing of both Oceans • Advantages • Disadvantages • Conclusion 3. INSEAD is a prestigious graduate business school in Fontainebleau, France.INSEAD also has campuses in Singapore and Abu Dhabi. Cite examples from the article. Red Ocean Strategy Blue Ocean Strategy; Compete in existing market space. Often times, the only way to compete in a Red Ocean is to choose the strategy of low cost or It also assesses the gains that matter with this template and the pains that matter for your product. The competition must exist in the marketplace of the company that follows the red ocean strategy. Example of Blue Ocean Strategy. Blue Ocean Strategy Example 1: Automobile Industry. A company will have more success, fewer risks, and increased profits in a blue ocean market. The essence of the blue ocean strategy is to come up with a product or service that will create a blue ocean for the company. Chan Kim and Renée Mauborgne developed the four action frameworks to destroy the trade-off between low cost and differentiation and to rebuild an industry’s strategic logic. Blue Ocean Strategy Examples. What is the traditional basis of ‘competitive advantage’ in red ocean strategies? Hence, the blue ocean strategy and the four action frameworks have become an innovative invention for the business arena. Maximizes opportunity while minimizing risks. Zoom’s story is a vivid example of the red ocean strategy. Figure 2: Blue Ocean Four Action Frameworks, First of all, you have to think about the factors of the industry that need to be eliminated because of defectiveness. The chart above summarizes the distinct characteristics of competing in red oceans (Red Ocean Strategy) versus creating a blue ocean (Blue Ocean Strategy). In their classic book, Blue Ocean Strategy, Chan Kim & Renée Mauborgne coined the terms ’red ocean’ and ‘blue ocean’ to describe the market universe. An example of a successful execution of a blue ocean strategy is the iPod. However, this discussion will also include the more recently expanded 2015 edition. Creating blue oceans. iTunesApple product iTunes is an example of Blue Ocean Strategy. (Dr.) Let's Make Your Business Digital With Lapaas.Join Our Most Advanced Digital Marketing Course. In short, Red ocean strategy refers to competing for the existing marketplace where the blue ocean strategy denotes making a new uncontested marketplace. The authors were co-directors of the INSEAD Blue Ocean Strategy Institute. In Red Oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. 22Prof. iTunes making an easy and convenient way of distributing music by making traditional sources of distribution of music irrelevant. Discover each of the tools and learn HOW to put them into practice with exercise templates. The following will discuss examples of a blue ocean strategy and red ocean strategy and the pros and cons to each. Before launching iTunes, consumers download a song illegally from the internet platform. #BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start creating your #blueocean. In most industries there is little effort to … Blue Ocean Strategy (Chan Kim and Renee Mauborgne) was released in 2005 by Harvard Business School Press. Summary Of The Blue Ocean Strategy This created a blue ocean (as families bought the devices, not hardcore gamers) and lead to big margins for Nintendo as the Wii machines we cheaper to make than more advanced machines. Published on January 3, 2020 January 3, ... Two Examples of using Blue ocean strategy within a red ocean existing industry . Thus, they focus on the current customer to make a benefit by selling products and services. Get ready to stop struggling and seize new growth ! Focus on current customers vs. focus on non-customers. SARAH GREEN: 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 … June 13, 2017 Blue Ocean Systems. This list would not be complete without mentioning Cirque de Soleil, arguably one … Blue Ocean Strategy was first published in 2005. Red oceans are all the industries in existence today – the known market space. The blue ocean strategy makes the competition irrelevant because they need not compete with other industries to sell products and services. System Approach In Red Ocean strategy system approach is towards low cost and differentiation In Blue Ocean strategy system approach is towards creativity and innovation. How to Use Four Action Templates, Eliminate, Reduce, Raise, Create. The main point of the blue ocean strategy is to stop competing with other companies, i.e. Companies that are already in existence may make a solid decision to come out of the usual … 5. In the 1890s, the horse and buggy was the primary mode of … Explain the redefined relationship between ‘value’ and ‘low cost’ in blue ocean strategies. © Chan Kim & Renee Mauborgne (2004-2021), We use cookies to ensure you get the best experience on our website and continuing implies your consent -, Align the whole system of a firm’s activities with its, Align the whole system of a firm’s activities in. All rights reserved. RED OCEAN Prof. W. Chan Kim and Renee Mauborgne in 2005 Competition within market space “Known” market Number of competitors Still, it is dominating the marketplace of music platforms for years. The Google Project Ara is currently in the process of being made and will be the first totally customizable smartphone. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. From the perspective of the red ocean strategy, the industry is doing business with the customers where some industries gain more clients and some other industries lose clients. Blue Ocean Strategy: Ten Difference Between Red and Blue Ocean Strategyeval(ez_write_tag([[250,250],'newsmoor_com-box-3','ezslot_0',155,'0','0'])); Blue ocean strategy refers to the uncontested marketing policy that focuses more on the new innovation to reinvent the business rather than head-to-head competition. Like the ‘blue’ ocean, it is vast, deep and powerful –in terms of opportunity and profitable growth. So, this strategy creates an uncontested market to serve its customers. A Blue Ocean Strategy may come out of a Red Ocean Strategy. To illustrate how Blue Ocean Strategy can be used in a variety of industries, we’ll cover three very different industries – automobiles, computers, and movie theaters. It is all about devising and acquiring the uncontested market forum by spawning a new demand. A path-breaking strategy known as Blue Ocean Strategy is a pacifist marketing scheme and is considered a strategic planning tool for assessing a business. Newsmoor Provides information: corporate, human, journalism, and broadcasting communication. Red Ocean Strategy. 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… Red Oceans vs Blue Oceans and business strategy. Advantages and Disadvantages, Pros and Cons. The innovation management model being discussed for this paper is called the “green ocean strategy” which is a hybrid theory derived from the more popular theories, “blue ocean strategy” and “red ocean strategy”. Apple entered into the digital music industry in 2003 with its product iTunes. Shows you how to create a win-win outcome. With the increasing popularity of the Internet, Netflix has become a streaming service with a wide choice of films and TV series Later they launched their shows and movies available only on their platform. The company will earn more money if it can bring more customers to its umbrella. Examples of Blue Ocean Strategies Netflix The first company that used the blue ocean strategy a popular subscription-based streaming service. Our theory is not to be confused with similarly-named strategies that deal with environmental impact of business; rather, … To do it, you have to start by watching what your market has and, more than that, what it doesn’t have. Blue ocean strategy is based on over decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years. The company also broadens the area of business to come up with new products or services for the customers, therefore customers are irrelevant here. For example, in order to exceed the customer’s challenges, the company needs to rebuild features of the industry.  W. Chan Kim and Renée Mauborgne together introduced the Blue ocean strategy in 2005. It is a simultaneous process of opening a new business market and creating new demand, therefore, competition is irrelevant. It also represents the communication model and theory with images.