International journal of economics, co mmerce and management, u nited kin gdom. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. An introduction to blue ocean strategy mba knowledge base. There are six paths companies typically follow to reconstruct their market. Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level.
Blue ocean principles business development consulting. Chan kim and renee mauborgne in their book titled blue ocean strategy. But its not always clear how to create a blue ocean strategy for yourself. May 26, 2015 summary of the first four chapters of the international bestseller blue ocean strategy. May 30, 2017 t his month, we read blue ocean strategy by w. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. By exploring the first four principles, you will learn the steps to devise your own blue ocean strategy. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Once a company creates a blue ocean and its powerful performance consequences are known, sooner or later imitators appear on the horizon. In blue oceans, demand is created rather than fought over. Blue ocean strategy powerpoint templates present better. Blue ocean strategy is a powerful framework for finding new business opportunities.
Blue ocean strategy how to create uncontested market space. Blue ocean strategy value innovation strategy canvas four actions framework errc grid six paths framework pioneer migrator settler map three tiers of noncustomers sequence of creating a blue ocean buyer utility map price corridor of the mass four hurdles to strategy execution tipping point leadership fair process. Blue ocean strategy that supports creating uncontested market spaces has also been discussed highlighting its methodology principles that apply all types of industries. To aid you in completing this step and all the other steps in. The concept of blue ocean is based on the idea that the business universe is made up. Students will gain an appreciation for the fundamental differences between red ocean strategy and blue ocean strategy and the key concepts of blue ocean strategy, particularly the notions of value innovation, reconstructing market. The six principles are presented in the following table. This framework is very innovative, as its principles challenge the conventional business strategy principles of fighting competitors headon. What is blue ocean strategy about blue ocean strategy. This session contrasts the bos approach with the ros approach. Jul, 2018 our study shows that blue ocean strategy is particularly needed when supply exceeds demand in a market, kim explained in an article on forbes.
Blue ocean strategy provides a systematic approach to making the competition irrelevant. Blue ocean strategy introduces analytical tools to minimize risk. The strategy canvas visualizes the current state of the industry and shows how a blue ocean strategy differs from incumbents. This blog article is a overview of some of the key points of the book by w.
Creating blue oceans cirque du soleil created uncontested new market space that made the competition. This strategy targets six principles that can be used in every organization so that they can arrive at a successful development and fulfilment of new markets. Applying the six paths framework to reconstruct market. Blue ocean strategy and sustainability for strategic management. This post defines blue ocean strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. Eight key points of blue ocean strategy heres the essence of blue ocean strategy captured in eight key points. Blue oceans strategy is the approach that suggests a company is better off searching for ways to play in uncontested market places instead of engaging with competition in existing marketing spaces. Blue ocean strategy is a strategy that advice companies. For app developers we help make the competition irrelevant. The blue ocean strategy offers users a framework for creating uncontested market. Kim and mauborgne point out that untapped value is often hidden in complementary products and. How to create uncontested market space and make the competition irrelevant, a book by professors w. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute.
The blue ocean idea index provides a simple but robust test of this system view. Learn vocabulary, terms, and more with flashcards, games, and other study tools. However, the price competition only results in a red. The six main principles guide companies through the formulation and execution of blue ocean. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. May 31, 2016 instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Principles of blue ocean strategy strategic management. Principles of blue ocean strategy free download as word doc. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. Blue ocean has six basic principles t o form a strategy. The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. There are six basic approaches to reconstruct market boundaries, also known as six paths framework. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Principles of blue ocean strategy principles of blue ocean strategy are the six main principles that guide companies through the formulation and execution of their blue ocean strategy in a systematic risk minimizing and opportunity maximizing manner.
The blue ocean strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up. The six principles of blue ocean strategy formulation principles 1. List the factors the customer cares about, and current dimensions of competition. After reading you will understand the basics of this powerful strategy tool. Dominant strategy leads to the best possible outcome available. The four pillars of blue ocean leadership insead knowledge. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. The framework redirects your attention towards the following six tenets under the blue ocean strategy methodology. Principles of blue ocean strategy strategic management business. Blue ocean strategy is a book published in 2005 and written by w. Blue ocean strategy formulation the four principles of strategy formation this blog article is a summary of the book by w. Pdf impact of blue ocean strategy on organizational. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades.
Together, they define the underlying philosophy of blue oceans. The elimination reduction improvement creation net 4. The purpose of this study was to apply blue ocean strategy to chinese 3g mobile telecom industry. Blue ocean strategy is about value innovation in general, in which no emphasis is put on reducing the speed to market. Reviewing the blue ocean strategy university of twente student. Amjad ali shahid subashini ramakrishnan slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Impact of blue ocean strategy on organizational performance. Scribd is the worlds largest social reading and publishing site. Expertise in saas deployment to the accounting profession and small to medium sized business owners, blue ocean principles works with vendors to create strategies that increase user adoption and partnerships to support growth initiatives. Making the internal process company ipf bos in order to optimize the implementation of blue ocean strategy, making the value of the company and the products to be better in the consumers. Sep 24, 2017 blue ocean strategy requires a different mindset.
What is the blue ocean strategy the term blue ocean was coined by two professors w. To break from competition, a organization has to reconstruct the market boundary which is the first and foremost principle in creating blue ocean strategy. The most appropriate unit of analysis is the strategic move, the set of managerial actions and decisions involved in making a major marketcreating business offering. It is the idea of trying to find market spaces that are free of competitors by creating and caputuring new demand. It requires the right research, patience and focus.
Aug 21, 2015 a successful blue ocean strategy that has sustainability requires that all three strategy propositions be aligned in support of both differentiation and low cost. The blue ocean strategy seems to be a perfect solution for present companies to become sustainable successful. The bluest ocean strategy for emerging ict business. A blue ocean strategy adopts the belief that markets and industries are not structured to beget competition. That is why i am suggesting that blue ocean strategy principles lend themselves well to the education sector.
Achieved via the delivery of features that have a highest marginal benefit to customer needs. Application of blue ocean strategy to chinese 3g mobile. Blue ocean strategy how to create uncontested market. The thesis tries to find whether all services are important to chinese 3g operators competiveness and how to create a. Blue ocean strategy how to create uncontested market space and make the competition irrelevant boston. 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. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. Strategy canvas the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. Examining a wide range of strategic moves across a host of industries, blue ocean strategy highlights the six principles that every company can use to successfully formulate and execute blue ocean strategies. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Download as docx, pdf, txt or read online from scribd. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. This article explains the blue ocean strategy, developed by w. The first four principles address blue ocean strategy formulation.
Value innovation strategy competes in an uncontested market space. Sep 23, 2014 download a pdf of this article and check back next tuesday for how to see your leadership reality. Selama lebih dari 10 tahun strategi ini digagas dan berhasil dipraktikkan oleh banyak perusahaan. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any organization can use to create and capture their own blue oceans. Strategi ini menekankan bagaimana perusahaan untuk tidak memenangkan persaingan dengan cara melakukan strategi headtohead dengan pesaing. Blue ocean strategy free download as powerpoint presentation. How to build a sustainable blue ocean insead knowledge.
The sustainability and renewal of blue ocean strategy creating blue oceans is not a static achievement but a dynamic process. There are six main principles that guide companies through the formulation and execution of their blue ocean strategy in a systematic risk minimizing and opportunity maximizing manner. 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. How to create uncontested market space and the make competition. See standard industrial classification manual 1987 and north amer ican industry. Value innovation strategy canvas four actions framework six paths. Red oceans are all the industries in existence today the known market space. Made by group d of the minor global trendwatching 2015.
Keywords blue oceans, value innovation, four action framework, strategy. Reach beyond existing demand reduce scales reisk 4. How to create uncontested market space and make the competition irrelevant by w. The objective of blue ocean strategy is to make competition irrelevant by creating a new value curve for both customers and the company itself.
This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Watch this video to understand the essence of blue ocean strategy, the worldwide bestseller written by worldrenowned professors chan kim and renee mauborgne. But, lets first understand what is blue ocean and how it is different from red ocean strategy. Then, with the last two principles, you are given the tools to execute that new strategy. Reconstruct market boundaries reduce search risk 2. The point we want to make here is that while amazon needs to learn more about the principles of marketcreating strategy, other retailers need to. Kim and mauborgne make the process manageable by providing six key principles for achieving blue ocean success. The six paths framework in formulating blue ocean strategy. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. What is distinctive about blue ocean strategy as a. Six paths framework blue ocean shift blue ocean strategy. View the entire blue ocean leadership series here w. This is a focus on generating additional demand rather than improving or increasing supply through value innovation. Blue ocean strategy proposes that businesses can have more success by creating a blue ocean, rather than trying to compete in the red ocean the traditional market space that is filled with feuding competitors.
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 about offering alternative services that have different functions and forms but the same purpose. Blue ocean strategy formulation the four principles of. The six main principles guide companies through the formulation and execution of blue ocean strategy in a systematic, riskminimizing manner. The blue ocean strategy approach to strategy is based on six principles that cater for the major risks of a new market creation project. Maximizes opportunityminimizes risk mitigates risk increases odds of success 7. How to create uncontested market space and make the competition irrelevant kim, w. Blue ocean strategy can be applied across sectors or businesses.
Chinese 3g mobile telecom industry is a rapidly growing multiple industry which served a lot of services to customers. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. Blue ocean strategy including examples and pdf download. Companies pursue blue ocean strategies to make competition irrelevant. The next two parts of the book cover these two categories of principle respectively, in addition to the application of tools and. Players will choose the dominant strategy regardless of what the other player does because its within. The six principles of blue ocean strategy risk factor each principle attenuates evaluation principles risk factor each principle attenuates formulation principles 8. The risks of following a blue ocean strategy the adaptive.
Chan kim and renee mauborgne, professors at insead. 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. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. To understand how an organisation achieves alignment to produce a highperforming and sustainable blue ocean, consider the case of the uk charity, comic relief. Chan kim and renee mauborgne in the indie business book club. Get the strategic sequence right reduce business model risk executive principles 5. The third and final part describes the two key implementation principles of blue ocean strategy including tipping point leadership and fair process. Blue ocean strategy adalah strategi menciptakan ruang pasar baru yang belum termanfaatkan. Chan kim and renee mauborgne, published by harvard business school press, boston, massachusetts, 2005, isbn 97815996192 blue ocean strategy is a business strategy book, first published on february 3, 2005.
The evolution of blue ocean strategy ims engineering college. 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. Blue ocean strategy is a growth strategy framework focused on the idea of creating an uncontested market spacei. Each of the six principles in blue ocean strategy expressly addresses how to mitigate. Blue ocean strategy is a landmark idea founded by w. Focus on the big picture, not the numbers reduce planning risk 3. Provides stepbystep process provides a stepped process for implementation gives management an alternative to traditional strategies 6. It is the intersection between these analytic techniques and the six principles of formulating and executing blue oceans that allow companies to break from the. Blue ocean strategy, also referred to as blue ocean shift, is a marketing strategy where there is a single firm selling a differentiated product or there can be very few firms selling products that are differentiated in the market.
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