blue ocean and red ocean strategy examples

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blue ocean and red ocean strategy examples

In most industries there is little effort to … The main point of the blue ocean strategy is to stop competing with other companies, i.e. Red oceans are all the industries in existence today – the known market space, where industry boundaries are defined and companies try to outperform their rivals to grab a greater share of the existing market. Blue ocean strategy focuses on creation of new customers. For example, the higher cost of manufacturing of the product can be reduced. The authors were co-directors of the INSEAD Blue Ocean Strategy Institute. iTunesApple product iTunes is an example of Blue Ocean Strategy. The goal of a Blue Ocean Strategy is for organizations to find and develop “blue oceans” (uncontested, growing markets) and avoid “red oceans” (overdeveloped, saturated markets). (Dr.) The Google Project Ara is currently in the process of being made and will be the first totally customizable smartphone. What does this mean? 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. 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. Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne. Thus, they focus on the current customer to make a benefit by selling products and services. To create these new features, you need to investigate the customer’s desire to fulfill. 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. For anyone tired of competing head-to-head and not getting far. 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. Zoom’s story is a vivid example of the red ocean strategy. Blue Ocean Strategy Example 1: Automobile Industry. Explain the industry and market dynamics of Ford’s Model T blue ocean strategy. 22Prof. iTunes solved the problem of recording industries when it started the business. Cite examples from the article. iTunes making an easy and convenient way of distributing music by making traditional sources of distribution of music irrelevant. iTunes solved the problem of recording industries when it started the business. Blue ocean strategy is based on over decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years. Red Ocean Strategy Blue Ocean Strategy; Compete in existing market space. An example of a successful execution of a blue ocean strategy is the iPod. CONTENTS • Red Ocean Strategy • Customer Value • Examples of Red Ocean • Red vs. Blue Oceans • Comparing of both Oceans • Advantages • Disadvantages • Conclusion 3. The letters INSEAD stand for Institut Européen d’Administration des Affaires, which translates into English as the European Institute of Business Administration. These are the very important factors that need to be increased to fulfill the industries well above standards. Like the ‘blue’ ocean, it is vast, deep and powerful –in terms of opportunity and profitable growth. Hence, the blue ocean strategy and the four action frameworks have become an innovative invention for the business arena. Shows you how to create a win-win outcome. Most companies have a hard time of identifying both. For years gaming companies had focussed on making better and better machines, Nintendo focussed my making the Wii fun. However, this discussion will also include the more recently expanded 2015 edition. Red Ocean or Blue Ocean Strategy!! This blog article is a overview of some of the key points of the book by W. Chan Kim and Renée Mauborgne.In this article you will learn how to make your competition irrelevant and have sales and profit … 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. They are competing with each other to get more customers. Focus on current customers vs. focus on non-customers. The blue ocean strategy makes the competition irrelevant because they need not compete with other industries to sell products and services. 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. In contrast, the blue ocean strategy, the industry tries to change the pattern of the business to yield something new for the customers. It also represents the communication model and theory with images. 5. 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. W. Chan Kim & Renée Mauborgne coined the terms red and blue oceans to denote the market universe. INSEAD is a prestigious graduate business school in Fontainebleau, France.INSEAD also has campuses in Singapore and Abu Dhabi. Red Ocean Strategy. It will help the company to create a new marketplace distinguished from the competition. In the 1890s, the horse and buggy was the primary mode of … Red oceans are all the industries in existence today – the known market space. 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 (Chan Kim and Renee Mauborgne) was released in 2005 by Harvard Business School Press. Advantages and Disadvantages, Pros and Cons. Cutthroat competition turns the ocean bloody red. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go.” The Blue Ocean strategy can lead to expansion of the business through increased profits. The chart above summarizes the distinct characteristics of competing in red oceans (Red Ocean Strategy) versus creating a blue ocean (Blue Ocean Strategy). One example of a blue ocean strategy is the Google Project Ara. With the introduction of this product, it becomes easy for the Apple users to download original and high-quality music at a reasonable price. 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. The blue ocean strategy, on the other hand, involves finding, developing or creating new and uncontested markets. Our theory is not to be confused with similarly-named strategies that deal with environmental impact of business; rather, Red Oceans vs Blue Oceans and business strategy. So, they always intend to beat the competitors through marketing policy, product quality, and services. Thus, this strategy allows the company to focus on business patterns rather than customers. At the end of the day, they are doing business among the same customers. Let's Make Your Business Digital With Lapaas.Join Our Most Advanced Digital Marketing Course. To swim in the Blue Ocean, the business must overcome three core challenges: Recognize a blue ocean against a red ocean. 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”. So, this strategy creates an uncontested market to serve its customers. 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. Secondly, you need to identify factors that are not completely necessary for the industry and also can not contribute to the industry’s benefit properly. How to Use Four Action Templates, Eliminate, Reduce, Raise, Create. Companies that are already in existence may make a solid decision to come out of the usual … #BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start creating your #blueocean. The industry also can create new products or offer new services for consumers in an innovative way. 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". Red Oceans are described as all the industries in existence today: the known market space. 6. In most industries there is little effort to … In addition, the four action templates appear as the best solution to identify the investment of the industry is in the proper way or not. See examples of strategic moves that enabled organizations to successfully break out of red oceans and create blue oceans of uncontested market space. Blue Ocean Strategic Moves. The following will discuss examples of a blue ocean strategy and red ocean strategy and the pros and cons to each. A company will have more success, fewer risks, and increased profits in a blue ocean market. 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. 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… 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. All rights reserved. Get ready to stop struggling and seize new growth ! Based on the discussion, it is safe to say that the blue ocean is a better way that can bring fewer risks, more success, and increased profits for the company. Therefore, Zoom managed to win the competition in a bloody red ocean. June 13, 2017 Blue Ocean Systems. Nintendo created a blue ocean when it launched the Wii. © Chan Kim & Renée Mauborgne. Social Media Revolution: Advantages & Disadvantages of Social Media, Emotional Intelligence (EQ): Importance & Characteristics of EQ, How To Improve EQ, 5 Gaps Model of Service Quality- Servqual Gaps Model or 5 Gaps Model, VALS Segmentation Model in Consumer Behaviour- VALS 2 Model, COVID-19 Pandemic Impact- History Background of Coronavirus, Group Communication Barriers: 4 Types of Barriers in Group or Team Communication, Speech Critique Sample: How to Critique a Speech Example- Lisa Kamal, Intend to provide better service to buyers, Difference between Red and Blue Ocean Strategy. It also assesses the gains that matter with this template and the pains that matter for your product. Apple entered into the digital music industry in 2003 with its product iTunes. Examples of Blue Ocean Strategies Netflix The first company that used the blue ocean strategy a popular subscription-based streaming service. Hence, the term ‘red’ oceans. The company will earn more money if it can bring more customers to its umbrella. Learn the essentials of blue ocean strategy and shift created by the #1 Management Thinkers in the World. These factors also can be made more contribution in the past but now useless, so you need to eliminate them because of becoming obsolete at the present time.eval(ez_write_tag([[120,600],'newsmoor_com-large-mobile-banner-2','ezslot_8',168,'0','0']));eval(ez_write_tag([[120,600],'newsmoor_com-large-mobile-banner-2','ezslot_9',168,'0','1'])); .large-mobile-banner-2-multi-168{border:none !important;display:block !important;float:none;line-height:0px;margin-bottom:15px !important;margin-left:0px !important;margin-right:0px !important;margin-top:15px !important;min-height:600px;text-align:center !important;}. The competition must exist in the marketplace of the company that follows the red ocean strategy. What is the traditional basis of ‘competitive advantage’ in red ocean strategies? In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. 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. For example, "competing factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business. 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. Rather than competing for a slice of an increasingly shrinking pie – the red ocean strategy – a blue ocean strategy sees a business creating a pie of …

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