Blue Ocean Strategy is Essential for Market Space.
“To seize new profit and growth opportunities, we need to adopt blue oceans strategy.”
But first of all we discuss about Red Ocean Strategy:
Red Ocean Strategy
Red oceans represent all the industries that already exist in today’s market space. In this strategy, boundaries of industries are well known and thoroughly accepted, and the competitive rules are defined. Here, companies try to perform much better than their rivals to hold a greater share of existing demand. It is important to be successful in the market by outperforming your competitors, this makes you to swim successfully in the red ocean.
Red oceans will always matter and fact of business life. But when necessary, it will raise up and exceed demand of supply in more industries, both are competing for a share of contracting markets, then it will not be sufficient to encourage high performance of market or industry. As the market space come to have crowded, anticipations for profits and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean bloody.
What is Blue Ocean Strategy?
Blue Ocean Strategy is a book that was published in 2005 and written by W.Chan Kim and Renée Mauborgne. It’s completely based on a study of 150 strategic moves spanning more than a hundred years and thirty industries are included. The Blue Ocean Strategy does a good job outlining how you can create a whole new market for yourself—without intense competition. In short, the blue ocean is a wider, deeper, and an unexplored market space with untapped potential.
“Blue Ocean” is like a figure of speech for industries that may not exist or is currently unknown.
Why it is essential?
To create new market spaces and make the competition irrelevant, W. Chan Kim and Renée Mauborgne made a comprehensive set of analytic tools and frameworks. It’s known as a “Blue ocean strategy tools.” They also declared that, businesses and entrepreneurs should consider about, what the authors call the “Four Actions Framework.” This will help to break the trade-off between differentiation and low cost, and to create a new value curve of the market.
Raise: What factors should be raised up well for the industry’s standard?
Eliminate: Which factors that the industry has long competed on should be eliminated?
Reduce: Which factors should be reduced from the industry’s standard?
Create: Which factors should be created, that the industry has never offered?
Some points of blue ocean strategy that will help to create a new value curve in market space:
- It pursues differentiation and low cost. It is about an ‘and-and then more’ not an ‘either-or’ strategy.
- It shows you how to create a win-win outcomes and how to align the three strategy propositions – value, profit, and people.
- It builds execution into strategy that make process easy to understand and make an effective path for execution.
- It maximizes opportunity while minimizing riskand also allows to test the commercial viability of ideas and shows how to clarify the ideas.
- It provides a step-by-step process to exploring the new market space
- It empowers you through tools and frameworks.
- It creates uncontested market space and never giving out-performances.