According to the Blue Ocean Strategy principles, companies should not only try to compete in existing markets (Red Oceans), but also find or create new markets where competition does not yet exist (Blue … Consider targeting the end-user’s pain points, especially if they’ve traditionally been ignored, and creating a new product with a different value curve. I have few examples and they are the part of Blue Ocean strategy. Like this article? By 1914, the US had 18,000 nickelodeons with 7 million daily admissions. Most blue oceans are created from within red oceans by expanding existing industry boundaries. Industries ranged from hotels, cinema, retail, airlines, energy, computers, broadcasting, and construction to automobiles and steel. Here are a couple of examples of companies who’ve successfully implemented the blue ocean strategy to grow their business: Cirque du Soleil . Before we dive into Blue Ocean Strategy examples, let’s get clear on what a blue ocean is. (Shortform example: Corporate software-as-a-service (SaaS) products traditionally target the buyer in corporations, like the Chief Information Officer or senior management. All these companies will also have the same goals as you; to achieve significant profit, revenue, and market share growth. The strategy is specifically a marketing theory and thus, a marketing strategy. Blue Ocean Strategy is a powerful framework for finding new business opportunities. It introduced interoperable software and equipment. The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of the Nintendo Wii. This blog article takes a look at what kind of ROI some companies have achieved by implementing a blue ocean strategy by W. Chan Kim and Renée Mauborgne. The letters INSEAD stand for Institut Européen d’Administration des Affaires, which translates into English as the European Institute of Business Administration. He has a passion for non-fiction books (having read 200+ and counting) and is on a mission to make the world's best ideas more accessible to everyone. BOS covers both strategy formulation and strategy execution. Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne. These frameworks and tools are designed to be visual in order to not only effectively build the collective wisdom of the company but also to effectively execute through easy communication. Examples of Blue Ocean Strategy. 1. In the 1970s, IBM, DEC, and others competed on building more powerful machines for the business market. DLSU Graduate School of Business at RCBC Plaza, Top 10 Emerging Influential Blogs in 2007, The Renaissance Person Forever a Learner and Personality Tests, All About the Hootsuite Social Marketing Certification. In Blue Oceans, demand is created rather than fought over. Canon. We’ll cover 15+ Blue Ocean Strategy examples so you can figure out how to create your own blue ocean. Because it doesn’t exist, you don’t have competitors competing directly against you. Save my name, email, and website in this browser for the next time I comment. Blue Ocean Strategy: Value Innovation To Create An Uncontested Market. He reads broadly, covering a wide range of subjects including finance, management, health, and society. In a similar move, in 1995 AMC created the 24-screen megaplex. In the 1970s, Japanese manufacturers created a blue ocean of small, efficient, high-quality cars. Market share increased from 9% in 1908 to 61% in 1921. Despite being unreliable, they cost $1,500, twice the average annual income. Then in 1978, Apple created the first popular home computer – the Apple II. It asserts that for businesses to win in the future, they must stop competing. Blue Economy for Business in East Asia: Towards an Integrated Understanding of Blue Economy. This was a Blue Ocean Strategy example. This combated the trend of moviegoers watching movies at home on VHS instead by offering superior sight and sound. Nickelodeons were widespread, but were considered low-brow. Blue Ocean strategy is a framework which inspires to create a market for an innovative product or market where there is a less competition. Simple theaters were constructed in lower-rent neighborhoods. IBM also unbundled hardware, services, and software, selling individually and creating the new software and services industries. Sign up for a free trial here. Learn more about yellow tail wine’s blue ocean strategy here. Before computers, businesses ran operations with a ledger and a pen. This helped meet a wider array of buyer needs while spreading risk and lowering costs. Eventually, Americans moved into suburbs, and Palace Theaters were too expensive to service a large geographical area. In the 1890s, the horse and buggy was the primary mode of transportation. Blue Ocean Strategy. These were used as interludes for live theater. BOS covers both strategy formulation and strategy execution. This was another Blue Ocean Strategy example. This catered primarily to the educated upper class, out of reach of working-class people. Blue oceans, where a market space is new and uncontested, and strategy centers around value innovation. They also introduced features around the users’ personal lives, like the ability to buy flowers and make travel arrangements through the terminal. Its shows combine the circus with adult theater, showing incredible acrobatics and physical feats set to a storyline and original music. Furthermore, the aim of adopting this strategy is to search for a business in which very few firms operate and where there is no pricing pressure. This is an excellent example of the Blue Ocean strategy at work. Log in. Red oceans, where competition is fierce in bloody waters, strategy centers around beating rivals, and wins are often zero-sum. Cirque du Soleil : An entertainment company founded in 1984 by Guy Laliberté and Daniel Gauthier. In 1893, Thomas Edison invented the Kinetoscope, allowing a peepshow a few minutes long. ), What blue oceans are, and how you create one for your business, Why some businesses succeed in creating blue oceans, and why others fail, The red ocean traps you have to avoid if you want business growth. In the 1890s, the horse and buggy was the primary mode of transportation. Shows cost only 5 cents and played from morning to night. Methodology/Approach: In the first part of this study, an extensive literary review is presented, solely focused on Blue Ocean Strategy and Business Model Innovation. The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant. In the 1990s, the SUV was introduced, featuring increased space over the minivan and rugged four-wheel drive and towing capabilities. This was low-cost but relatively slow. For instance, a corporate software vendor often caters to the CTO (who cares about cost reduction) rather than the engineers who will use the product (who care about ease of use). IBM followed suit and offered their own PCs in 1982. This article is an excerpt from the Shortform summary of "Blue Ocean Strategy" by W. Chan Kim and Renee Mauborgne. In the mid-1990s, computer manufacturers competed on performance, offering more features and software, and sold through distributors. A new strategy is to get a mass of end users onboard, who then influence upward and ask their bosses to pay for the product. They thus became a publicly maligned symbol of excess. In the financial information industry, Reuters and Telerate dominated by appealing to IT managers, who favored standardization. The blog analyzes and argues that companies such as Cebu Pacific, International Marketing Group (IMG) and Sun Cellular have all made blue ocean moves. Blue Ocean Strategy frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index. Here are 3 of the most notable ones. This creates a new product offering that doesn’t currently exist. Have any buyers traditionally been ignored? By 1924 the price was down to $290. 1 It’s grounded in data Blue ocean strategy is based on a decade long study of more than 150 strategic moves spanning more than 30 industries over 100 years. In 1924, General Motors introduced variety – “a car for every purse and purpose.” This was a Blue Ocean Strategy example. In other words, as opposed to Red Oceans that are saturated markets where differentiation or cost competition is prevalent, companies can instead create … By 1924, CTR held 85% of the tabulating market and became IBM. Using the framework for building a compelling blue ocean strategy, we will apply the Blue Ocean Strategy Canvas to healthcare across three areas: Where the competition is investing. Consider two types of oceans: Blue ocean strategy pushes companies to create new industries and break away from the competition. The authors were co-directors of the INSEAD Blue Ocean Strategy Institute. 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. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. The terms blue and red oceans were introduced by W. Chan Kim and Renée Mauborgne in their book Blue Ocean Strategy. The Apple II wasn’t the first personal computer – the Altair 8800 was. Novo Nordisk, which made its name manufacturing insulin, addressed the user pain point with the NovoPen, a pen-sized device with an insulin cartridge that allowed easy injection. Diabetics needing insulin had to deal with vials, syringes, and needles several times a day. This attracted upper/middle-class theater-goers at a reduced price. It didn’t feel like a special night out any longer. In 1908, 500 American automakers existed making custom automobiles. Meaning of blue ocean strategy 4. Blue Ocean Strategy - Including Examples And PDF Download. At a low enough price, computers went mainstream. “The key goals of the blue ocean strategy are finding the right marketing opportunity and making the competition irrelevant.” Here are a few organizations that successfully captured a blue-ocean market: Cirque du Soleil: This Canadian entertainment company began in the 1980s as a bunch of “crazy people” with a vision of what the modern circus could be. In 1893, the Duryea brothers created the first automobile. Philips’ blue ocean strategic move in the teakettle industry is an example of looking across complementary product and service offerings, path four in the six paths framework. In 1963, AMC introduced the multiplex, with multiple different-sized theaters showing a variety of films. Blue Ocean Strategy Summary Three Examples of Blue Oceans While this came in Appendix A in the book, this is a good time to cover three industries with repeated blue ocean creation. By taking their eyes off the traditional air passengers and finding out how to target non-users, such as those who use … BOS is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000). There are several examples of the blue ocean strategy all over the world that have been accepted by many industries to get benefits such as Canon, iTunes, Cemex, Philips, Netjets, Curves, JCDecaux, Quicken, Polo Ralph Lauren, and so on. Blue Ocean Strategy is based on “time and again” proven data rather than unproven theories. Limiting car options reduced the number of unique parts needed. Furthermore, he created a new leasing model where businesses could avoid large upfront costs and upgrade machines frequently. In 1905, the blue ocean of movie theaters was created by Harry Davis with the nickelodeon. Consider what happens before, during, and after your product is used. Bloomberg focused instead on traders, who wanted ease-of-use and more powerful features like keyboard shortcuts, multiple monitors, and analytical tools to help them assess fair market value. The circus industry is … Competition pushed theaters to be small, running a movie per week. Can you create a new product targeting their pain points? Blue Ocean Strategy is a concept that has been pioneered by INSEAD Professors, W. Chan Kim, and Renee Mauborgne. The larger scale also gave it operational economies and leverage with distributors. Further blue ocean moves include online streaming of movies like Netflix. outline the essence of blue ocean strategy. Authors believe that the red ocean stands for a market that is overwhelmed with competitors, and the blue ocean represents an unknown market without rivals. The Australian firm Casella Wines examined the wine industry from a different perspective: how do you make wine that’s easy to drink and fun? To customers, they were largely all different from box wines in the same way. Henry Ford created the Model T, the first standardized, mass-produced automobile. Here's what you'll find in our full Blue Ocean Strategy summary: Allen Cheng is the founder of Shortform. The business was merged to form CTR in 1911. The book presents analytical frameworks and tools to foster an organization's ability to systematically create and capture "blue oceans"—unexplored new market areas. Dell reduced delivery time to 4 days, compared to the industry average of 10 weeks. Offering complements to your product – even at cost – may add additional value through bundling. From 1926 to 1950, GM increased market share from 20% to 50%, while Ford’s fell from 50% to 20%. However, this discussion will also include the more recently expanded 2015 edition. iTunes solved the problem of recording industries when it started the business. Your email address will not be published. Before movies, a major form of visual entertainment was through live theater or operas. In 1952, the first electronic computer, named the UNIVAC, was released by a competitor. The phrase “blue ocean strategy” describes a market strategy that differs from the conventional approach of entering an established market and attempting to compete with existing players. The concept of the blue ocean strategy was set out in a book of the same name, by W. Chan Kim and Renee Mauborgne in 2005. Going to the movies also requires finding a babysitter, parking, and possibly a drink afterward. The Big 3 owned 90% of the US market. BOS frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index. This led president of DEC to say “there’s no reason for any individual to have a computer in their own home.”. The key to a successful blue ocean strategy is finding the right market opportunity and making the competition irrelevant. In 1914, Thomas Watson at CTR simplified tabulators. US automakers, who had fallen complacent and focused on luxury, were caught by surprise. Blue Ocean Strategy Australia was engaged to run a brief strategic thinking challenge for the 70 leaders.